That's the way you have to answer a question like "do the Israelis want the Palestinians to have their own state.

See, it depends on the conditions of that new state, whether that state can survive at peace with Israel. So every time it looks like this wouldn't be so, that the new Palestinioans state would find itself immediately making war on its much more powerful neighbor, being crushed, and we are right back where we are now (no Palestinian state) it's easy to see where this attitude "what's the point" comes from.

On the other hand, enough Israelis and certainly enough of the "Zionists" living in other countries (critical, BTW) would be perfectly willing for....
evacuate the settlers
completely withdraw allowing the Palestinians to form their own state
TO BE NEGOTIATED (the Palestinians may have to "pay" fot these "extras") whether and under whart conditions the settler infrastructure will be turned over or demolished when leaving and under what conditions and for what purposes Palestinians may cross the border into Israel.

And of course, the new Palestinian state, like any other state, repsonsible for keeping peace from its side of the border --- or top be considered "at war" if it refuses

Why would Israel want a Palestinian state when the Palestinians have never attempted to negotiate for one? When offered a chance to prove themselves able to shoulder the responsibility of statehood, they rejected it with violence against themselves and against Israeli children? Condition #1 of the 'roadmap' was an end to Palestinian imperialistic and genocidal attacks against Israeli civilians, and it's a condition they have never attempted to fulfil. It's a question that needs to be asked. Where are the partners for peace in the Palestinian Authority? Arafat is a butcher, a war criminal, a General of genocide, a child murderer, a fraudster, an embezzler, a playboy, a despot. This Egyptian sadist has cheated the Palestinian people and the Israeli people out of peace for decades. But where are the Arabs who will step up to talk peace, rather than attempting to continue the fascist 'intifada' that the Palestinians have already lost? Time is running out for someone in the Palestinian authority to step up and negotiate peace.