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But there's a problem here - and it's central to the entire conflict.

The 1967 borders mean... the borders prior to the Six Day War. And those borders - the 1949 Green Line - weren't defensible. At all. So Israel will never retreat to them.
And while the UN would say "sorry Israel, back you go, thanks", Israel's under no obligation to do anything at all. What they have, they hold. That's realpolitik in practice: in particular because in all of history, there has never been an independent Palestinian state.
That's not me agreeing with Israel. That's me setting out their position. There is no chance of peace ever happening until their position is understood and acknowledged. Their perspective is that ANY concession made is painful and doesn't have to happen.
Further:

1. The 1949 Green Line was based on an armistice agreement. It did not formalise borders

2. The 1993 Oslo Accords didn't formalise borders either. That was left for subsequent negotiation... which of course, broke down.
And regarding it breaking down: you can blame the Israeli government, you can blame Arafat, you can blame both. But the thing is: neither Barak nor Arafat could've got a deal past their people. Because both were seen as giving up too much. That's how hard this all is.
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