As of now, not likely. Maybe in the future, but the issues that Israel has, particularly regarding their safety, conflict with what the Palestinians refuse to budge on.
I believe that a lot of the Palestinian leadership is just to blame for Oslo's failings, if not more, than Israel. At least, Israel's leaders have always struck me as genuinely wanting peace more, whereas the Palestinian ones just go through the motions to get what they want.
I agree that the West Bank is restrictive BUT it shouldn't be a huge issue or a point to stop all discussion. Israel has said, repeatedly, that they'll likely dismantle a lot of them if such a peace with the Palestinians does happen, and even more so they've made it an open point to talk about. Many of them were already large and well integrated into the area by Oslo, so it's not like they couldn't avoid it anyway. I think that Palestinians using it to refuse to talk to the Israelis is more inhibiting towards peace, since they are already there and only through talking and some maybe be removed. If you want to talk about settlements and preventing peace, keep in mind that Israel did freeze all construction (so much that modifications to homes already there didn't happen, supposedly) and before the freeze was up Abbas finally reached out.... to ask more time. It had almost been a year.
Think about this - they removed themselves completely from Gaza. It does set a precedent that Israel will remove settlements for attempts at peace. However, due to hostile responses irregardless, Israel has been shown that "removing settlements" is not the answer to peace and other things have to be guaranteed before they let down their guard.
The wall's route is not along the green line because, to be honest, it can't always be on that line due to geographic concerns. Especially in Jerusalem, unless you want homes destroyed. It's existence is pretty much a Palestinian fault, though. Keep in mind this wall is NOT cheap, and while many point to the US and say that Israel is getting all this money, with that aid (that isn't all that much in the scale of things) you still have a huge drain on their budget that restricts them and prevents them from doing other things. They HAVE to protect themselves - that's how the majority of Israelis see it. It was simple to cross the boarder prior to it, but when people started dying the Israelis got fed up and built it.
Israel has been committed, since day 1. THEY accepted Palestine as a state, and if you look at those boarders, Israel wasn't really getting much out of it to begin with. Since then, they have been wary of violence against them but never flat out said "NO" to it. It's actually the Arab response to be silent and not talk, which was a strategy utilized against the Israelis for the longest time.
Jerusalem is a tough issue. For starters, there are places that the Israelis won't sign over either. The Western wall being the biggest, since last time it was under Arab rule no Jew was allowed to visit it. And the Mount of Olives, which was desecrated. I do think that those Arab neighborhoods that no Israeli ventures off to are worth talking about, but I think Israel is entitled to a lot more of Jerusalem than you probably think.
Also, "right of return". There are many issues with that, as in how many is Israel obligated to allow in, what criteria can they use refuse, why not go to Palestine in the first place, does Israel have the infrastructure to handle the largest numbers wanted, etc....
I personally think that Israel should be careful. Based on the attitudes of some of the people raised in the refugee camps, whose existence is admitted to be a maintained "open sore against Israel".. placing them in proximity with Israelis is a rather stupid idea. It will cause a deconstruction of society in many regards, especially if many are violent.