Palestinian prime minister Fayad denounced the “Mickey Mouse” state offered by Netanyahu. Fayad is right: Israel cannot dictate to the Palestinians whether they can have an army, and in PR terms the Palestinians cannot forfeit their right to one. Indeed, if they have lived under occupation (as the Israeli government says they have) for forty years, it is only reasonable for them to have an army.
Even if the Palestinians accept a demilitarized state, nothing precludes them from changing their minds later. The world has already tried the scenario of a demilitarized Rhineland.
The Israeli government is afraid to state unequivocally that we will not accept a Palestinian state in Judea and Samaria.