It's not than the Israeli government doesn't want to negociate. It can't.
Settlers + nationalists + theocrats have too much political weight (and a much higher birth rate).
It's all to convenient, bottom line they are together still not a majority. Without American pressure the mainstream of the Israeli society will not feel to eager to go forward feeling the status quo is more safe at the moment. But with the feeble administration in DC and Kerry's bad direction nothing will ever move. All of that does reduce the faults from Bibi's terrible administration