The claim is usually that the settlements are in the way, and that the settlements are expanding over Palestinian lands.
Sadly this is nothing but an excuse to avoid a genuine talk, face to face about peace.
Let’s look at the Gaza strip for example. Israel understood that no good can come of it’s presents there, it was a unilateral decision, so Israel pulled out. Bang.. There are no more settlements in the Gaza strip! And.. What happened next? Thousands of rockets fired in retaliation, from the lands that belonged to Israel only a few years ago.
Since Israel defeated its neighbors in the Six Day war (and gained control over the West Bank and Gaza) offers were brought to the discussion table every now and then. One may assume that since there were little or no settlements in the 70′s and obviously less settlements in the 80′s than in the 90′s subsequently there will be correlation between the settlements and the land Israel will offer in return… but here’s a fact, since 1975, when the first talks were held after the Yom Kippur war (1973) the percent of the land the Israeli governments offered in return to peace got bigger and covered almost 97% of the West Bank (with territory exchange also on the table, the number is close to if not a whole 100% of the West Bank).
So… Israel showed it can pull out any settlement if it decides the move serves the country well for the long run.
Imagine what the Israelis will think if there will be a real partner on the other side of the negotiations table.