'OK deal' is a stretch IMO, its a subjective matter, but looking at those deals more closely, particularly the stipulations and you'd see why Arafat was within his rights to be reluctant to sign. The Barak deal in particular would have the Palestinians fragmented into 3 west bank cantons, in addition to a small canton within EJ and one in Gaza, all under Israeli control, with Israel reserving full rights to be able to cut off any one of them. Now to me that doesn't sound it abides with the UN's insistence of I quote - ` the sovereignty, territorial integrity, and political independence of all states in the area`, but rather a legalised occupation in all but name. And to quote Shlomo Ben Ami, who became essentially the architect of the Camp David Proposals in 2000, in regards to the Camp Oslo proposals that preceded them - "the Oslo agreements were founded on a neo-colonialist basis, on a life of dependence of one on the other forever". The point is the Israeli perspective never intended to concede genuine Palestinian autonomy and sovereignty over their territories.
Obviously, 'ok' means in the context where Palestine had basically nothing and are getting screwed in daily basis. By no means it is a great deal, as in 1967 borders with full sovereignity. But they were getting almost all the lands in the West Bank, the entire Gaza, and parts of the Jerusalem. There were also mentioned peacekeepers being sent there (similar to Kosovo for example).
Now, they definitely would not have gained full sovereignty, but it would have been a giant step towards it. The settler activity would have immediately halted. Providing that Palestinians would not have fecked up (i.e., choosing terrorist organisations to govern them), with time passing they would have gotten more and more sovereignty. Israel was ready to leave West Bank and Gaza (they left Gaza later anyway), and the main thing they cared was their security. So, I think (naive as I might be), that if that happened, and Palestinians would not have attacked Israel, with time they would have gained more and more sovereignty, until getting full one.
I take your point about Palestinians having to compromise from a position of weakness, but in reality the groundwork is already there for a fair two state framework. The only thing stopping it in essence is the United States, who remain the biggest obstacle to peace in the region. Instead of playing the bonafide arbiter, they insist on enabling Israel's expansionist agenda, while actively sabotaging any diplomatic initiatives to bring about a productive peace process and recognition of a Palestinian state.
They are in a massive position of weaknesses. 'Eventually the justice will prevail' or 'God will help them', unfortunately, neither will happen. They will either have to agree to a very shit deal, or no deal at all, which means getting beaten and de-humanized in daily basis, and every few years getting killed in the thousands. These are the only two deals they have, so I do not agree that it was wise to not choose the shitty deal, which default to chosing infinitely worse deal.
And of course, they are not the only people who have had historical injustices. We already mentioned the Tibetians and Uigurs, whom despite deserving so, do not have their own state. IIRC, you are ethnically Kurd, and the same goes for them. My point is that getting states, for most part has nothing to do with 'deserving to have a state', it is a complex geopolitical thing, that has much more to do with alliances, power, and doing the strategic things at the right time. Unfortunately, I think that Palestinians had many chances to choose the strategic thing to do but never did so (unlike for example Tibetians, Uigurs or Kurds who never even had the chance of Palestinians).
With regard to the bolded, the US is an ally of Israel, they are not a bonafide arbiter, I do not think anyone ever thought so. Their interest lie with Israel, and it is very unlikely this will change. I do not think that anyone pretends otherwise. But the US, are well, the most powerful country in the world, like it or not. And Israel, even without the US, has enough deterrance to ensure that nothing happens without them agreeing to it.
Granted I obviously don't know anywhere near as much as the Kosovo situation as you do considering your background, but from my understanding there was never really any risk of fragmenting or cutting off Kosovo into several cantons, which at anytime could have been cut off by Serbia, nor was there an insistence that Serbia could exercise control over them. And of course the Palestinians never had the benefit of NATO forces bombing those who were at plausible risk of carrying out a genocide.
I do not want to digress this even more, but I just took an example that despite the similar historical injustices, the deal offered to Kosovo was as bad (autonomy, not independence), in many ways worse than the one to Palestinians (in some better of course). Somehow, despite being unpopular, the Kosovan leadership accepted it, knowing that the other option was no-deal which means continuing the suffering. Of course, things then massively diverged since then, with Serbia not accepting that deal, eventually meaning that Kosovo became independent a decade later (and still not a member of the UN, 25 years later). But had Kosovan leadership not accepted the shit deal, not only there wouldn't be an independent Kosovo now, but likely there wouldn't be Albanians in Kosovo at all.
With Palestinians leaders not accepting the shit deals offered to them, in many ways mean that there won't ever be a Palestine. I think most people nowadays understand that it is unlikely that the two-state solution is ever going to happen.