“The borders of Israel and Palestine should be based on the 1967 lines with mutually agreed swaps, so that secure and recognized borders are established for both states. The Palestinian people must have the right to govern themselves, and reach their potential, in a sovereign and contiguous state.”

I understand this as follows: He is referring to the lines before the 6 Day War, i.e. the 1949 armistice lines. (After the Six Day War, the “West Bank an Gaza are in Israeli hands!) As for land swaps, he means that Israel can keep some of the settlements as long as they give the new Arab state territory in return. Some Israeli politicians have also put this idea forward: give the new Arab state parts of Israel that are heavily populated by Arabs in return for the settlements becoming a part of Israel. Israeli Arabs have repeatedly rejected this. They may call themselves “Palestinian”, but they do not want to be part of “Palestine”!

Another problem here is that a contiguous “Palestinian” state (connecting the “West Bank” to the “Gaza Strip” would make Israel noncontiguous.