I have basically no insights here, but I feel like discussions of what hypothetical detente between Israel and Palestine might look like (see Yglesias, Ezra, TNR (non-Peretz), Peretz, the RBC, et al.) ought to at least have a passing reference to the current shape of Israeli and Palestinian public opinion. Chris Bowers has a nice primer, and Swisspeace.ch has links to a large number of polls. The polling tends to be very fuzzy, but the general shape of public opinion is that (a) Palestinians overwhelmingly support negotiating with Israel, but (b) as of late have had little faith that any of their elected leaders can get anything done, and (c) reject almost every compromise you see most often discussed in the Western press (shared control of Jerusalem, nominal right of return and compensation for Palestinians who are unable to return, slow dismantling of settlements in the Jordan Valley, etc.). In addition, the United States is the Western nation nation least trusted by Palestinians to make progress on the Israeli-Palestinian peace process.
Sadly, I've had a much harder time finding polling on Israeli public opinion, which is just as important, since it will be difficult to get Israel's Prime Minister to sign an agreement that will end his chances at reelection.