This is clearly bait being dangled for President Barack Obama, offering him an "easy" way out of his dilemma of not having any peace talks after almost a year in office: pressure Israel to give up more and you will look good, with plenty of photo opportunities of you presiding over Israel-PA talks.
Of course, what Abbas wants to do is to remove one of the main points of Israeli leverage, the borders to be agreed upon and the status of east Jerusalem. Moreover, is leaving out both the additional demands he will be demanding (all Palestinians who want to can go live in Israel) and all the Israeli demands he will be ignoring (recognition of Israel as a Jewish state, the end of the conflict and dropping all Palestinian claims, security guarantees, an unmilitarized Palestinian state, settling all refugees in Palestine).
In addition, of course, he can't speak for about half the people and territory he claims to represent, that is, the Gaza Strip. And by not holding elections and unilaterally extending his term, Abbas leaves the door open for some future Palestinian leadership saying he had no legitimate mandate to negotiate and therefore any agreement he made isn't binding.
Finally, he made one very big misstatement of fact, hoping-as usual-that the West pays no attention to what's said in Arabic. He claims that the PA has stopped incitement against Israel, in terms of urging violence and rejecting Israel's existence. While the PA is, of course, far better than Hamas on such matters, a very large dossier can be compiled on how that is a lie.
The question is what will the Obama Administration do? Is it going to press Israel for still more unilateral concessions so that the PA will come to talks and President Obama can claim a success? Will it try to get the PA to do something in terms of confidence-building measures or to talk without preconditions? Israel is certainly not going to accept the 1967 borders with absolutely no change before even talking with the PA (and probably not even as part of a peace agreement).
Indeed, it is now Obama administration policy that there need to be minor border modifications to accommodate the post-1967 changes on the ground. Moreover, Israel can say that if it stops all construction immediately, including in Jerusalem, the PA still won't talk so what's the point?
Incidentally, Abbas admitted that he never asked for an Israeli construction freeze before but is only doing so in the context of the Roadmap Plan. However, even after the Road Map, Abbas never made this a big issue until after Obama demanded the construction freeze. In objective terms, the president has no one to blame but himself for this mess, but of course he isn't going to blame himself. He has to blame either Israel or the PA. Which will it be?