Actually it came out in Wikileaks that Israel wants to unload Gaza. The Israelis approached both the Palestinian Authority and Egypt to see if they would manage Gaza, and both turned them down.
I think it goes without saying that Israel is never going to give up Jerusalem. However, everything I've read seems to indicate that IN GENERAL the 67 borders are a good starting place, so long as there is a kind of tit for tat with land swapping so that i.e. predominantly Jewish areas just outside of Jerusalem would stay inside of Israel. Hanging on to the Territories is a big f-ing pain in the butt. The only reason Israel does so is because it is an unfortunately necessary part of the SECURITY of Israel in the face of organizaations like Hamas who don't really want peace.
The Settler movement is also a burr under the saddle for israelis. The average Israeli is NOT in favor of things like setting mosques on fire or cutting down olive trees in the middle of the night. But every group has its lunatic fringe. IMHO, since it is against Jewish law to cut down fruit trees of a city you are conquering, it is OBVIOUS that these Settlers are total meshuggenahs who say they are "orthodox" and obviously are not.
@GracieRuth , your signature:
"Gilad Shalit we will not stop until you are free again."
You may see something in that respect in days. What a price to pay, though. It does show the Israelis value their people in one sense. Guess we'll see.