The Arab world, which is by far the most politically backward region on earth, has leaders that are far more gullible than bright children.
Saudi Foreign Minister Prince Saud al-Faisal said that in inviting his country to the Annapolis conference Washington promised to "use its full influence" to ultimately bring about a peace agreement. He said that meant if the two sides could not agree, "we assume the United States will come up with its own ideas."
You assume wrong.
An actual specific proposal, especially regarding the refugees but also regarding, for example, water, would be a propaganda setback for the US, because anything Israel or the US could propose would be easy to paint as unreasonable. It would have no impact on the ground though.
Coaxing the US and/or Israel to produce a specific attackable proposal was the entire point of the Saudi/Arab League proposal. It always has been a stupid plan, it was never going to give the results the Saudis hope for. But this is the type of plan monarchies consistently come up with
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