We agree to a [Palestinian] state on pre-67 borders, with Jerusalem
as its capital with genuine sovereignty without settlements but without recognizing Israel.
The Haaretz article pointed out that “Meshal used the Arabic word hudna, meaning truce, which is more concrete than tahdiya - a period of calm - which Hamas often uses to describe a simple cease-fire. Hudna implies a recognition of the other party's existence.”
Israel can say that it demands regional superpower status; it can say that it cannot live with a free Palestinian people; it can say that it insists on retaining control over Palestinian territories it captured in the 1967 war because having illegal settlements there is so convenient; it can say that its claims to Jerusalem have more moral legitimacy than the claims of Palestinians. It cannot, any longer, say that it is Hamas that is blocking peace.
Meshal may be lying or telling the truth; he may have been sincere when he made the remark and change his mind later. But this is a fair peace offer. Indeed, it is extremely generous: far more like a reasonable final compromise agreement than an initial public offer to tip the region out of endless war and toward settlement.
The ball is in Tel Aviv’s court. Tel Aviv has only two choices: respond with some conciliatory gesture to match that of Hamas or bear responsibility for continued conflict.