A Thought: A Separate Peace with the West Bank

A thought I want to share with the readership:

Is a separate peace possible with the West Bank? Could a shrewd Netanyahu or a moderate Livni work with Abbas to grant full, secure statehood to the West Bank (and deal with Gaza later)?

Here's what I'm thinking:
1) The Hamas takeover of Gaza makes it a Fatah enemy. Abbas currently bears little responsibility for Gaza's actions.
2) Israel treats the two regions as two separate areas, to be honest.
3) A blockade is really not necessary for the West Bank if Jordan will agree to reasonable border control (it will).

Possible benefits:
1) The West Bank and Israel could work together on a plan to get Gaza under control.
2) Israel could turn its focus away from Gaza.
3) Israel would gain tons of legitimacy in its struggle against Gaza by showing that it's willing to play ball with the West Bank.
4) More reasonable Palestinian insurgents in the West Bank would set down their guns (no, the crazy hard-line anti-Semetic fanatics won't).

The hang-ups:
Most people will think "security" pretty quickly on the issue, but it's really not a major issue. Israel has shown that occupying Palestine doesn't stop occasional rockets from being fired out into Israel, and there's no reason to think it will enable the West Bank. Most Palestinians in a free West Bank have no intentions of using minor irritations of Israel to put the West Bank's freedom at risk, and won't give the hardliners a place to maneuver.

The big hang-ups are territory:
1) Both sides have a strong religious attachment to Jerusalem.
2) Settlements: Israeli settlements are scattered all over the West Bank, and growing. Reversing this would be extremely difficult. It did work with Gaza. There are many, many more settlers in Palestine (and the Israeli government is currently building more).
3) The Wall. Currently, a massive all lies deep in West Bank territory that would have to be torn down and moved back to the Israeli/Palestinian border. This is mostly a logistical issue.

Thoughts?