P.A.: We Will Never Recognize Israel as a Jewish State

Here it is, in black and white.
Israel has offered a compromise. It will impose a further building freeze in the West Bank if the Palestinian government acknowledges in return the Jewish character of the State of Israel.

The Palestinians are emphatic in their rejection of such a deal.
"We forcefully reject all these Israeli games," said Palestinian negotiator Saeb Erekat, according to the Jerusalem Post. "The racist demands of Netanyahu cannot be tied to the request to cease building in the settlements for the purpose of establishing a state."
A spokesman for P.A. President Mahmoud Abbas also rejected Netanyahu's offer. "The topic of the Jewishness of the state is not connected at all to the issue [of the building freeze]," the spokesman said Monday.
So, after 62 years of independence and decades of attempted peace making, Israel can not get its peace partner, the Palestinian Authority, to acknowledge the most fundamental characteristic of the State of Israel: It is a Jewish state, founded by Jews, created for Jews, because the rest of the world showed that it did not want Jews.
Here's Israel's deputy prime minster, Danny Ayalon:

On November 29, 1947, the international community overwhelmingly recognized the establishment of a Jewish state. Less than one year later, the Jewish state was realized as David Ben-Gurion read the immortal words of the Declaration of Independence, which contained the term “Jewish state” no less than five times. Only minutes later, U.S. president Harry Truman recognized Israel as the Jewish state.
Only by adhering to and proudly reinforcing our national character, not only to those who wish to join our people, but also to the nations of the world, will we validate our presence. Many nations actively promote their national mission, whether it is “American exceptionalism” or France’s “liberté, égalité, fraternité.” Every nation has its national ethos, and Israel’s “light unto the nations” can only be expressed through its Jewish character, which we must state clearly and unequivocally.

Not to mention that Palestinian claims of "racism" are grossly hypocritical. As The Washington Times notes:

There was predictable outrage in the region to the simple notion of recognizing the Jewishness of Israel. Without a trace of irony, Syrian strongman Bashar Assad told journalists the new oath is a "fascist" act that "proves" that Israel is a "racist country."
No one asked Mr. Assad about the section of the Syrian constitution that discusses the "Arab masses" and their "continuing battle against the forces of imperialism, Zionism and exploitation," not to mention the Article 1 declaration that "the Syrian Arab region is a part of the Arab homeland" and its citizens are "part of the Arab nation." Hamas decried the oath in similar terms, overlooking the declaration in its charter that "the Islamic Resistance Movement is a distinct Palestinian Movement which owes its loyalty to Allah, derives from Islam its way of life and strives to raise the banner of Allah over every inch of Palestine."

Peace will come when the Palestinians want peace, and not a minute earlier.