That is incorrect. Israel wanted to swap land which included a land corridor to Gaza and a completely contiguous Palestinian state. if Abbas was interested in the idea, he could have proposed his own map. Instead he just ignored it, knowing that it wouldn't go over well with generations who had been promised the elimination of Israel and knew that Hamas, PIJ, and PFLP reject it.
It's a shame because as you said, a deal was so close. Olmert showed ready to make a Two State Peace but Abbas chose to ignore it. Yes, the governments changed but Abbas had 9 months where he sat twiddling his thumbs and intentionally running out the clock.