There are rumors that Mahmoud Abbas will resign from his post as president of the Palestinian Territories. Ostensibly, this is to protest the pace of negotiations and the back-tracking on the part of the Obama administration. For the Obama administration, and much of the world, the Palestinian cause has a lower priority than combating a deep recession. The PLO needs to recognize this, and take control of their own destiny. It seems to me that the only morally just position is for the Palestinian leadership to declare an independent state in the West Bank & Gaza. The Palestinians have to take their fate into their own hands, looking for help and assistance from the outside is largely futile. Once the Palestinian state has some measure of sovereignty, its representatives can begin to negotiate with the Israelis.
The PLO will likely lose US aid for some time, and no doubt many Palestinians working in Israel will be deeply inconvenienced. In time, this pain will prove to be short-lived, the Palestinians really need to focus on developing a legitimate economy of their own, rather than one aid-based. Israeli action against elected Palestinian officials or police will be hard for any government to support if the declaration is peaceful. Once a Palestinian state has been created, representatives of Israel and Palestine can negotiate as equals, till that happens no one is going to take their representatives seriously. Of course, the maximum political impact will occur if the entire process is peaceful and Palestinians peacefully demand that Israeli forces “Quit Palestine”. Negotiating about settlements and Jerusalem can occur once the Palestinians have control over their own destiny.