A major breakthrough might be on the horizon for the Israeli-Palestinian conflict. According to Army Radio, Egyptian President Abdel Fattah al-Sisi has made a generous and creative offer to Palestinian Authority President Mahmoud Abbas.Egypt would be willing to cede a large tract of land on the Sinai Peninsula and annex it to the Gaza Strip. The newly created entity, which would be five times the size of the territory presently under the control of Hamas, would become an autonomous Palestinian state and would be run by the PA . The enlarged Gaza Strip, which would be demilitarized, would absorb hundreds of thousands of Palestinian refugees.In return, Palestinians would give up their demand for a state on the West Bank along the Green Line. Instead, large Palestinian population centers on the West Bank would receive autonomy. Territory adjacent to Gaza would make up for the loss of land on the West Bank.Unfortunately, Abbas reportedly rejected the proposal outright. Abbas’s concerns are understandable. He cannot be expected to give up Palestinians’ claim to the West Bank. Obviously, Sisi’s proposal would not remove all the obstacles to an Israeli-Palestinian agreement.Many questions would remain unanswered. What sort of autonomy would Palestinians enjoy on the West Bank? What arrangement would be made regarding Jerusalem? What sort of sovereignty would the Gaza state enjoy? Nevertheless, Sisi’s proposal could be a game changer. At the very least, it addresses the plight of Palestinians living in Gaza: overcrowding, a reactionary Islamist regime that uses violence to enforce its rule, and a lack of access to markets.It also addresses the refugee problem. Abbas should at least show a willingness to seriously discuss the proposal.Israeli-Palestinian negotiations have been deadlocked for years. Though all sides in the conflict supposedly “know” the solution – two states based on the 1949 Armistice Demarcation Lines with land swaps, a shared capital in Jerusalem, mutual recognition and a settlement of the Palestinian refugee problem – implementation remains out of reach.The problem, in its simplest construction, was that the maximum Israel was willing to give the Palestinians was less than the minimum the Palestinians were willing to accept. No amount of juggling with the components of the deal could overcome this structural flaw.From Israel’s point of view, a deal could not be reached on borders without first reaching understandings on security.Faced with incessant Palestinian incitement and the glorification of terrorists that continues to this day even among “moderate” Palestinian political leaders, most Israelis remain unwilling to create an autonomous Palestinian state alongside Israel that would deteriorate into a terrorist state. Gaza Strip serves as a worrying precedent.But from the Palestinians’ perspective, no agreement could be made on security arrangements until they were assured of borders that provided the basic elements of statehood.Palestinians and Israelis were similarly irreconcilable on issues such as Jerusalem and the refugee problem.No amount of tinkering brought the sides any closer to a prospective peace deal.But now Egypt’s Sisi has changed the equation. In a refreshing departure from Arab inaction, Sisi has expanded the possibilities for an Israeli-Palestinian arrangement.Of course, Sisi’s motives are not altruistic. Egypt has been battling Salafist forces in the Sinai for years. The breakdown of law and order on the peninsula is a major strategic threat to Egypt. The creation of a stable sovereign state in this anarchic region could be a stabilizing factor. Ensuring that the PA controls the enlarged Gaza Strip would neutralize Hamas, whose connections with the Muslim Brotherhood make it an enemy of the present Egyptian government.We must not delude ourselves. Egyptian society remains deeply antagonistic to Israel. And an enlarged Gaza will not solve the underlying cause of the conflict: Palestinians’ refusal to reconcile themselves to the existence of a Jewish state. Nevertheless, Egypt and Israel share common interests which include a desire to weaken Hamas, stabilize Sinai and see Egypt and other “moderate” Sunni nations take a more active role in confronting Islamic extremism. Sisi’s Gaza initiative could lead to a major breakthrough in what has become an atrophied Israeli-Palestinian negotiation process, provided the Palestinian political leadership gives it a chance.