Brent Sasley argues that, despite the current right-wing coalition in government, Israeli politicking may favor some movement on peace negotiations:

In theory, then, Netanyahu, a rightwinger anyway, is constrained by his rightist coalition and so at best will pursue talks as a deception to maintain the occupation. But this glimpse doesn’t tell the whole story of peacemaking politics. … [I]t’s misleading to say that his own Likud party can stop him from engaging in serious talks. It can make things difficult for him, of course; but the rejectionists don’t control the masses of the party. The party has been beset by internal fighting over the distribution of power and personal ambitions that have nothing to do with the peace process. No other leader has the popular familiarity or stature to challenge Netanyahu in the party and carry it to victory in the next election. Even the rejectionists know this, pledging their loyalty to Netanyahu and affirming they will work with him. This would likely be confirmed even more obviously if Netanyahu made negotiations a party referendum on his leadership. …

Also in the government is Yair Lapid, leader of Yesh Atid. His ambition is to become prime minister, and as soon as possible. He’s been quoted as saying that if the party hadn’t joined the government, “in a year-and-a-half, I’ll replace [Netanyahu] as prime minister.” There’s no indication he has given up on his frantic schedule, and being in government gives him the chance to build a policy reputation and new support base. To do this he’ll need a lot more votes than he received in the last election (19 Knesset seats). He’ll certainly play to the right to this end, taking a more hawkish stance on peace process issues. But his party is comprised of several doves and centrists, who — combined with the need to take some votes from the left — will pull him toward a more moderate position.

In short, engaging in a genuine negotiating process is his best chance to build support.

Yossi Beilan, less sanguine, predicts the leaders will need a Plan B – “an interim agreement establishing a Palestinian state on provisional borders”:

Even if Netanyahu’s interest in an interim arrangement stems out of hope that it will become permanent, Abbas should learn an important lesson from history. Begin gave up on the Sinai in order to keep the West Bank and Gaza. Sharon left Gaza to retain the West Bank, and Netanyahu has in principle agreed to a Palestinian state in order to preserve lands that have not yet been transferred to Palestinians. Change may be slow but it is certain. Eventually, a permanent agreement will be reached and a Palestinian state established on 1967 borders with some minor, mutually-agreed-upon adjustments. After all, if an interim agreement is not negotiated, the Oslo accords will prevail. It is better to at least guarantee the Palestinians a state even if its borders are provisional.

More Dish on the potential of the new talks here.