No negotiation over right of return, for starters. I understand why Israel doesn't want to discuss the topic (I wouldn't want to either in their shoes), but without discussing it, there isn't going to be a way to come up an alternative arrangement. Also, that the Israel stance basically involves turning the West Bank into the holes in Swiss cheese, many small and divided units.
Of course, anyone who followed the negotiations that ended in 2000 or even the more recent negotiations under Olmert knows that Israel has never set any pre conditions for negotiations and has never held any issue off limits for discussions or negotiations. In fact, Israel has shown considerable flexibility on both the issues you mention.
In the context of Clinton's proposal to set up an international fund to help Arabs who claimed a right of return to settle in the new Palestinian state or elsewhere, Israel agreed to accept 100,000 of these, but Arafat, under pressure from other Arab leaders, held the issue to be non negotiable.
On the issue of the settlements, in both the negotiations that ended in 2000 and the more recent negotiations, Israel agreed to give up all but four large settlements, three contiguous with pre 1967 Israel and one near Jerusalem, and to exchange pre 1967 Israeli land for the land those settlements are on. Neither Arafat nor Abbas accepted or rejected this offer.
On the issue of Jerusalem, in both sets of negotiations, Israel offered to share sovereignty over Jerusalem with the new Palestinian state, the Arabs controlling largely Arab areas and the Israelis controlling largely Jewish areas, but both Arafat and Abbas held the issue of Jerusalem to be non negotiable.
If you have been following the news since Netanyahu took office, you know that while Israel has set no pre conditions for negotiations to begin and has declared no issue not open to discussion, Abbas has insisted that as pre conditions for negotiations, the Netanyahu government must hold these offers open, despite the fact both Arafat and Abbas had previously rejected them, and that Netanyahu honor the Palestinian claim to the land the settlements are on and to Jerusalem by freezing all construction there, the settlement freeze pre condition getting more attention in the media because it sometimes seems to have the support of the Obama administration.
Netanyahu has responded that Israel is ready to begin negotiations on all issues without any pre conditions any time the Palestinians are.