Isreal, are we headed towards peace?

Maybe. As I've said before, signing any peace deal in this situation is a bad idea; the Palestinian government is not currently populary elected, rather it is appointed by Abbas. As such, we can't really be sure at this time whether most Palestinians support it or not. It is quite possible that Israel signs a deal with Abbas and withdraws (or whatever the deal is), and then Hamas wins the next election and refuses to accept the previously signed deal. Then Israel ends up with a hostile country on two sides - all for nothing. Until a new election is held and a moderate government is elected, I wouldn't sign anything. However, I would show support for Abbas to let the Palestinian people know that the way to peace is through moderation and not violent extremism.