No legal basis

There are some interesting sidelights on the reported plan for the Palestinians to declare a State unilaterally. In fact, Yasir Arafat effectively declared a Palestinian State in 1988 while exiled in Tunisia, but since it garnered no recognition, it was moot. In order to become a State the Palestinians like all others must show that they can survive on their own, something that they have singularly been unable to do. So no amount of PR and passing of resolutions will change the reality on the ground.
It has been pointed out that such a unilateral declaration would abrogate all previous agreements, including the Oslo Accords that established the Palestine Authority. In his speech at the Saban Forum in Jerusalem on Sunday, organized by the Saban organization to improve US-Israel relations, PM Netanyahu warned the Palestinians that by taking this unilateral step they would free Israel to take its own actions, and they would undoubtedly lose in the process. Israel can also take unilateral action, but unlike the disengagement from Gaza, that was a unilateral Israeli withdrawal, in the West Bank it is likely that Israel will unilaterally annex all land that it considers belongs to it by virtue of Jewish population, and this will be a big loss for the PA.
Further, Alan Baker, the former legal advisor of the Israeli Foreign Ministry, has pointed out that the basic laws under which all the negotiations are based, UN Security Council resolutions 242 and 338, explicitly exclude unilateral actions by either side and if the Palestinians did do such a thing, they would be going outside the framework of the relevant UN resolutions. Indeed because of these long-standing resolutions it would be legally impossible for the Security Council to accept any unilateral actions by the Palestinians.
One could argue that it would be in Israel's interests that the Palestinians take such a unilateral action as declaring a State, since it would free Israel to do what is expedient in its own right. Abbas has no significant popular support, and so cannot risk elections and cannot make any concessions to Netanyahu in negotiations fearing assassination. Therefore, he has made the restart of negotiations impossible, despite all that Obama and the EU have done for him. So a unilateral declaration is his way out, to cause a complete breakdown of negotiations, and to let the two sides go their separate ways. This may lead to another conflict which Israel will no doubt win.