now had the Palestinians said "and we want the state of Israel wiped off the map but lets see if we can meet in the middle somewhere" even as a statement of what they thought of the offer then proceeded from there there would have at least been an effort made.
That said, yes, you could of course identify something as a forfeiture/concession with or without the prism/framework of international law. Yes, the fairness of that concession is ultimately and technically subjective. That is an aside though; you obviously cannot assume the vantage of either position as an evaluator of these negotiations; you must identify and adopt the most impartial and least biased focal point. This would be international law as it is most representative of impartial global consensus. Israel is free to make its offering and indeed it probably was consistent with its position and objectives, but this does not obviate the fact that this offering was certainly weighted heavily in its favour by demanding Palestine make all of the concessions as determined by this impartial vantage. This is my point; it was by no account a sweetheart deal when examined through an unbiased prism independent of both parties. Arafat was thus perfectly right to refuse it, though he faulted in not providing a counter-offer.