A common refrain from Einat Wilf, covered in several outlets, is that peace requires not constructive ambiguity, but constructive clarity. Specifically, Wilf calls for the West to state forthrightly that it will not tolerate calls for the "right of return" and the Israel must realize that the settlements cannot stay forever. This formulation has one good part, one problematic part, and an attendant part that makes an important point but needs development.
First the good part. Wilf recognizes that the so called right of return, which she refers to as "so called," is fundamentally incompatible with a peaceful settlement and calls out the western intelligentsia who coddle the PNM's insistence on it under the delusion that they will eventually back off. The reality is that the effect, even though I'm not aware of Wilf stating it explicitly anywhere, of implementing the "right of return" is that "two-states" would become an Arab state and a binational state, leaving no Jewish state.
The problematic part is how Wilf characterizes the settlements. Wilf draws a moral equivalence between the "right of return"and the settlements by describing the push for "right of return" as angling for Palestinian rights on every square inch and the settlements as angling for Israeli rights on every square inch. However, that comparison does not hold up. While one could find elements within the settler movement who would push to extend Israeli rights to "every square inch," not every settlement in and of itself does so. Even if every existing settlement were retained, including the corridors that connect them to each other and as a whole to west of the Green Line, the result would not be no State of Palestine, but a smaller State of Palestine. It is entirely reasonable that the eventual State of Palestine should be larger as opposed to smaller. However, it is not reasonable to describe the debate about the size of the eventual State of Palestine as one of whether or not there should one day be a State of Palestine.
That is the difference between allowing the settlements, or some subset of them, to remain permanently and implementing the "right of return." Whereas the settlements are a quantitative issue of how much territory any future State of Palestine may control, the "right of return" is a qualitative issue of whether Israel will remain a Jewish state or become a binational state, a euphemism for disappearing by demographic inversion.
Ancillary to the paired issue of "right of return" and the settlements, Wilf responds to the assertion that Arafat's signing of the Oslo Accords shows that the PNM is no longer interesting in Israel's destruction and that it is so obvious that such a belief is a fantasy that they must realize it is a fantasy even if they had such an interest. Wilf forthrightly says that this is not the case and compares it to the Muslim world's playing the long game during the time of the Crusades. However, Wilf, aside from citing the precedent of the Crusades which is important in its own right, doesn't fully develop a reason why one should believe that the PNM is seeking a Saladin moment. Wilf does cite the PNM's denial of the Jews' peoplehood and of the Jewish people's connection to the Land of Israel, both widely disseminated in Palestinian society. She further describes how these myths are critical to arguing that justice would not be offended by eliminating Israel. However, there is more that could show that the recognition of Israel at Oslo was a bald faced lie.
The response to the claim that Arafat's statements when signing the Oslo Accords demonstrate that the PNM has abandoned its ambition to eradicate Israel is that drawing that inference is a logical fallacy. The fallacy is that while the PNM abandoning its ambition to eradicate Israel would lead it to recognize Israel as Arafat did in Oslo, abandoning that ambition is the only possible impetus for doing so. Another impetus that would have a similar result is realizing that they will never have the ability to eradicate Israel without western and fifth-column help and that such forces would never openly support that objective. Therefore, they strategically decided to pay lip service to recognizing Israel and restricted their west-spoken ambitions to "reasonable" demands that the west would support, but which would put them in a position from which they could eradicate Israel on their own.
With no further information, Occam's razor would dictate accepting that the PNM no longer seeks Israel's destruction, possibly even deeming the alternative hypothesis a conspiracy theory. However, there is further information. For starters, on the night after signing the Oslo Accords, Arafat broadcast a message to the Palestinian people that doing so was part of the Phased Plan for Israel's destruction. Furthermore, for Arab and Muslim audiences, Arafat never described the Accords as a needed compromise to balance the legitimate aspirations of two different peoples, but as following in the tradition of the Treaty of Hudaibiya. This further information is part of what we should observe if the alternative hypothesis were true that should be unexpected if the recognition at Oslo was genuine.
As to the PNM's belief in the feasibility of eradicating Israel, the "right of return" would achieve it and Fatah seems to be working towards that end. However, they are stuck in that the west so far will not directly accede to that demand. What the west will do is continue to demand that a Palestinian state come to fruition, with the urgency of such statehood becoming greater the more the Palestinian people "suffer," while Fatah refuses any statehood offer that excludes the "right of return," hence the refusal of Olmert's offer. Fatah thinks that diplomatic pressure from official western channels, augmented with the civil forces of the BDS movement will eventually force Israel to capitulate.
A conclusive demonstration that this strategy will not succeed, such as a declaration that all support for the Palestinians will terminate until the call for the "right of return" is abandoned, may induce Fatah to give up on eradicating Israel or it may have no effect other than to induce Fatah to seek a new strategy to eradicate Israel. However, as long as the west continues to play its part in this strategy, Fatah will believe it is viable and continue to pursue it. The ball is in the west's court.