Will the Curse of Jerusalem be lifted?

Ismail Haniyeh, Palestinian PM-designate issued a ground-breaking announcement:

"If Israel declares that it will give the Palestinian people a state and give them back all their rights, then we are ready to recognise them."

Basically Hamas is prepared to accept Israel as a nation on the following grounds:

(1) Israel withdraws to the 1967 borders, which involves one seemingly insurmountable problem, the return of East Jerusalem to the Palestinians.

(2) Israel recognises the rights of Palestinians to form their own State.

(3) Israel recognises the ‘right of return’ for Palestinian refugees who fled, or were forced to leave, in the 1948 war and their descendants.

If Israel accepts these Palestinian demands, Hamas will be prepared to accept the right of Israel to exist, and renounce its vow to repossess ‘every inch’ of Palestine, which to Hamas includes the entire Israel. Obviously Hamas has entered into negotiation mode.

[Note: the term 'every inch' in today's metric world gives one an indication of how long the conflict has been].

An Israeli cabinet minister Meir Sheetrit welcomed Haniyeh’s announcement. He said: "We won't have any trouble speaking to Hamas, and to reach a settlement", provided of course Hamas renounces violence. The bargaining has begun.

But I reckon there may be one to two points that Israel may not accept at all. The most obvious non-negotiable point would be the ‘right of return’. Israel fears that 'returning' Arabs will turn the demographic patterns around, making the Israelis the minority. I also believe that Hamas knows this, but negotiations would usually start off with a wish-list before hard bargaining trims it down.

The second point may or may not be achievable, depending upon how it would be negotiated, namely the issue of East Jerusalem. It’s not just land or the city per se. Jerusalem carries emotional and spiritual significance for both sides. A long-past proposal was to make Jerusalem an international city governed by the UN, but that was rejected outright by Israel.

The current indirect dialogue represents a great crack in the hitherto 'closed door' between Israel and Hamas. The recent exchanges, albeit indirect, could initiate peace talks towards the burying of a 50-year hatchet once and for all, though there's still many hard yards to cover. If Israel does the brave and decent act by returning East Jerusalem to the Palestinians, it will still have the Western city for itself.

I suppose we'll have to wait and see how far a post-Ariel Sharon Israel is prepared to meet this probably once-in-a-lifetime opportunity. The onus should be on the Israelis as the party in a superior position to meet Hamas half way.

Related:
(1) The Curse of Jerusalem?
(2) The Curse of Jerusalem? (2)
(3) The Curse of Jerusalem? (3)