At first glance, it seems to meet some Palestinian demands for a state, including land swaps in compensation for Israel annexing settlements, but one should not be fooled. Israel wouldn’t only annex the so-called settlement blocs contiguous to the 1949-’67 armistice lines, but also dispersed non-contiguous settlements, and the Jordan Valley to boot. The territories offered to the Palestinians as a tradeoff would include towns and villages inhabited by as many as 300,000 Israeli citizens who happen to be Palestinian, apparently expelling them peremptorily from Israel. 
The proposed territories annexed to Israel would go beyond the usual settlement blocs, which include about 87% of the current settler population, to incorporate 15 settlement enclaves that exist beyond Israel’s security barrier, along with a network of roads and security buffers that would insure that these dispersed settlements remain connected with contiguous Israel. Likewise, there’s the annexation of the Jordan Valley, as much as 30% of the West Bank. (When one includes the settlement enclaves and the roads emanating from them, the remaining Palestinian state on the West Bank resembles Swiss cheese.) With Israel’s annexation of the Jordan Valley, the Palestinian state would be surrounded by Israeli territory and have no direct border with Jordan.
Israel would cede these territories to the Palestinians in return: the “triangle” of Israeli-Arab towns and villages directly north of the West Bank plus two chunks of the Negev with road links to Gaza (one labeled a “high tech manufacturing industrial zone,” and the other “residential and agricultural”), and a tunnel connecting Gaza with the West Bank. (See map.)
They are being told that their new capital would be in East Jerusalem, but it would only include two outlying neighborhoods that are to the east of the security barrier (plus the neighboring town of Abu Dis), and not most of the heavily-populated Arab neighborhoods in East Jerusalem, which would remain part of Israel’s “undivided” capital.
There is supposed to be a four-year moratorium on expanding settlements within Palestinian areas — basically giving the Palestinians time to agree to the plan, negotiate modifications, or face the consequences of a new onslaught of settlements. The Palestinians are supposedly invited to negotiate, but the Trump administration has already alienated the Palestinian Authority leadership with the decision to move the US embassy to Jerusalem.
In the words of Ameinu, TTN’s parent organization:
This ill-timed and misguided proposal does not aim to solve the conflict, for if it did, it would have been done in coordination and engagement with the second party to the conflict, the Palestinians. Today’s announcement was a bi-lateral agreement between Israel and the United States; it leaves no room for Palestinian concerns or input. A durable, lasting peace is one that is negotiated with the cooperation and trust of both parties. This attempt by the US and Israel to impose “peace” on the Palestinians is just the latest sign that the Trump administration has relinquished America’s historical role as an honest broker between the Israelis and the Palestinians. This gambit will fail and the region will only become less, not more stable.