Thats a cheery plan and all, but it is totally unrealistic. The reality is the militant arabs have no interest in peace at all. They have rejected two state offers since shortly after the end of WW1, even when the offers were totally slanted in their favor. The Israelis would have no problem living peacefully with the arabs.
I would like to ask everyone to take a look at this site. It shows very clearly were the Muslim terrorism came from. It illustrates nicely the problem with Arafat. If you check it out you will see how similar Arafat and UBL are. After reading the information tell me why Israel should negotiate with this guy, when none of us would claim negotiating with UBL would be fruitful.
http://www.tellthechildrenthetruth.com