Exactly What Is "Mutually Exclusive"?

Reported:-

'There is no doubt about the fact that Israeli settlements and the two-state solution are mutually exclusive,' [resigned (/?) Palestinian Authority negotiator/PLO official Saeb] Erekat said after meeting Tony Blair and other representatives of the Quartet of Middle East mediators - the United States, the European Union, the United Nations and Russia - at the UN headquarters in East Jerusalem.

And confirmed:

In a statement issued following the meeting held at the United Nations headquarters in Jerusalem, the second since the Quartet has issued its September 23 statement on reviving mediation efforts between the Palestinians and Israelis, chief negotiator Saeb Erekat re-emphasized the importance of halting settlements. 

“We are ready to discuss all final status issues once Israel proves its seriousness and commitment by freezing all its illegal settlement construction in the Occupied Palestinian Territory, especially in occupied East Jerusalem, and accepting clear terms of reference, specifically the 1967 borders,” he said.  “We cannot understate the importance of this issue. There is no doubt about the fact that Israeli settlements and the two-state solution are mutually exclusive,” he added.

And to complete the "negotiating position" -

“We are ready to discuss all final status issues once Israel proves its seriousness and commitment by freezing all its illegal settlement construction in the Occupied Palestinian Territory, especially in occupied East Jerusalem," Erekat said

There are many things that could - and should - be mutually exclusive. Among them:

Terror and Peace.
Incitement and Peace.
Corrupt educational content and Peace.
False commitment to negotiations and Peace.
Strategic threats and Peace.

I could go on, and should, but you get the drift.

But more important, why should Jews residing in the territory of a second Arab state in the former territory of the Mandate for Palestine exclude, mutually, a "two-state solution" whereas Arabs living in Israel, obviously, do not?

One geopolitical entity denies Jews while the other entity must retain a multi-cultural, multi-ethnic composite?

Would that be Islamic apatheid?

Or is that a rather unique all-inclusive characteristic of the Pals.?

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