Israel tried working with the PLO based on the 1967 issues of land for peace. Hamas bombed Israel throughout the negotiations under the Oslo Accords to try to try to prevent any deal.
When Israel made peace with Egypt, there was an effort to reach out to the Palestinians to reach peace but the Palestinians were not interested.
In December 2000, Clinton pushed for a deal that was pretty close to everything the Palestinians wanted based upon the 1967 issues. According to Clinton, Arafat started saying he had to renegotiate based on the number of refugees that would be allowed to enter Israel. Clinton got pissed off at this. After Clinton spent a lot of effort and not reaching a deal, no American president is going to spend political capital on trying to reach a deal unless he/she thinks a deal can be reached.
Olmert proposed a deal in 2008 where Israel would give the Palestinians 93% of the West Bank and give 5% of Israel proper for the Palestinian state. The Arab areas of East Jerusalem would be part of the Palestinian state and East Jerusalem would be the capital of Palestine.
That would be have been a huge compromise for peace for Israel.
You can search for the Olmert proposal yourself. I did a quick search and this outlines it.
Clinton pushed for 94 to 96% of the West Bank with swaps of 1 to 3 percent of land inside Israel. Israel agreed with the parameters.
Exert from Clinton's book on what happened.
