...both Israeli and U.S. leaders ignore the real root of the conflict. The heart of the conflict is the denial of a non-Muslim entity's existence – namely, Israel – on land that, in the eyes of many Muslims, is "holy land" that belongs to them, and not any issue with Israel’s size or borders.
On Jan. 9, Grand Mufti of Jerusalem Muhammad Ahmad Hussein, a close associate of Palestinian Authority President Mahmoud Abbas, stressed that all Israeli territory was Muslim "holy land," had been since 637 C.E., and would be forever...On March 27, 2010, Abbas declared: "Jerusalem and all its surrounding areas are holy lands promised by Allah. We must do everything we can to save them from the Jewish threat."
This principle of "holy land" is permanent, and is stronger than any leader or passing policy, and it applies to any land that was ever under Islamic control. It is an inseparable part of the legacy of Muhammad and Islamic law...Their loyalty to the "holy land" obligates Muslims to "holy war" and the restoration of sovereignty in the Philippines, Thailand, parts of China, Kashmir, Chechnya, Israel, Bosnia-Herzegovina, Spain, Portugal and elsewhere.
...Recognition of foreign sovereignty over Muslim "holy land" amounts to humiliation, betrayal and servitude for Arabs and Muslims...
Continuing the policy of negotiating "land for peace" plays into the hands of our enemies and dooms us to repeat past mistakes. It ignores the roots of Arab hostility, raises Arab expectations and exacerbates violence and terrorism in the region.
In this connection, let's deal with a closely related issue.
Is Israel obliged to withdraw completely and totally to the 1967 boundaries as per 242?
Here's from the Text of Shultz Letter to Israel's Prime Minister, from March 10, 1988
I set forth below the statement of understanding which I am convinced is necessary to achieve the prompt opening of negotiations on a comprehensive peace...The agreed objective is a comprehensive peace providing for the security of all the states in the region and for the legitimate rights of the Palestinian people...negotiations will be based on United Nations Security Council Resolutions 242 and 338, in all their parts...
...negotiations will be based on all the provisions and principles of United Nations Security Council Resolution 242. Final status talks will start before the transitional period begins. The transitional period will begin three months after the conclusion of the transitional agreement and will last for three years. The United States will participate in both negotiations and will promote their rapid conclusion. In particular, the United States will submit a draft agreement for the parties' consideration at the outset of the negotiations on transitional arrangements.
Two weeks before the opening of negotiations, an international conference will be held...All participants in the conference must accept United Nations Security Council Resolutions 242 and 338, and renounce violence and terrorism...
Palestinian representation will be within the Jordanian-Palestinian delegation. The Palestinian issue will be addressed in the negotiations between the Jordanian-Palestinian and Israeli delegations.
GEORGE P. SHULTZ
However, the letter to King Hussein had this added:
...the President...believes as well, however, that Resolution 242 does permit changes in the boundaries which existed prior to June 1967, but only where such changes are agreed between the parties.
King's Counsel: A Memoir of War, Espionage and Diplomacy in the Middle East by Jack O'Connell, WW Norton NY, 2011, p. 148
And here's a further clarification:
...Secretary of State George Shultz was even more explicit about what this meant during a September 16, 1988 address: “Israel will never negotiate from or return to the 1967 borders.”
The United State position changed more as evident from the Letter from President Bush to Prime Minister Sharon, April 14, 2004
...As part of a final peace settlement, Israel must have secure and recognized borders, which should emerge from negotiations between the parties in accordance populations centers, it is unrealistic to expect that the outcome of final status negotiations wiith a full and complete return to the armistice lines of 1949, and all previous efforts to negotiate a two-state solution have reached the same conclusion. It is realistic to expect that any fin agreement will only be achieved on the basis of mutually agreed changes that reflect these realities.
So, on the opne hand a theological-ideological position and on the other, a proper acknowledgement of Arab aggression in 1967 as well as a recognition not only of diplomatic flexiibility but of the Jewish people's rights to their historic homeland in its borders.