What is Carter doing?
In reality, something George Bush was ideally placed to do. I think it is one of the more tragic mistakes of his presidency. There was the opportunity where a reasonably fair and free election was held in Palestine and rather than embracing or at least recognize the people's democratic choice, Bush decided to rant about terrorism and dictate foreign policy to a new state.
In my opinion, Bush had the opportunity to do a "Nixon goes to China" and he chose not to. He had the opportunity to conclusively demonstrate that democracy was a viable method for the Palestinians to gain redress of their grievances, and instead he chose to maintain his "tough on terror" position.
As far as the "official recognition thing goes" please. For the longest time the U.S. considered Taiwan "China." Israel has some how managed to survive while being official recognized by no other Islamic power other than Egypt.
As far as going when the Administration said no, well them's the breaks. While Constitutionally I would like to protect the power of the Presidency to conduct foreign affairs, it's a freaking free country.
Peace