At some point you do offer a thesis, namely, that even without Jerusalem the peace process would not advance. Unfortunately you do not elaborate a sound analysis for this. You begin by mentioning two things are to blame, political factors and religion but neither is given sufficient explanation. In terms of religion, and here you specifically point to the Palestinians, the Palestinian leadership has now three decades accepted the boundaries of June 4, 1967. There are some Palestinians, as there are some Israelis, who reject any compromise but both are relatively marginal.
The lands occupied in 1967 is under international law occupied–not disputed.
I think your discussion would have been more productive to focus on the deliberate efforts to undermine Oslo by the Israeli far-right (under Netanyahu) and by their American supporters, namely, the neoconservatives and the Christian right.
You mention Israel favors bilateral negotiations while the Palestinians favor multilateral ones. This is accurate. However, you do not explain why.