Usually, in my experience, only media associated with Gaza terror groups would routinely refer to Israelis within the Green Line as "settlers." The independent and Fatah-leaning media would still distinguish between pre-1967 Israel and the territories.
However, with the death in Rehovot, the independent Palestinian media have generally been referring to the victim as a "settler" and Rehovot as a :"settlement."
Ma'an News Agency, originally funded by Denmark, writes, "a settler was killed and 8 others were injured."
Safa, which is a private news agency, says, “An Israeli settler was killed" and says missiles were shot towards the "settlements."
Shams news similarly says that an "Israeli settler was killed."
Only the official Palestinian Authority and apparently Fatah media do not use this wording. That is probably because they realize that the EU would be very displeased if they called Rehovot a "settlement" and that's where they get their funding from.
This is not merely semantics. This shows that Palestinians, in general, still consider all of Israel to be "occupied" and all Israeli Jews are "illegal settlers." It is a form of dehumanization - a way of saying that it is not immoral to kill Jews. (Obviously, Israeli Arabs are not "settlers.")
Which means that they would never accept any permanent peace deal that leaves a Jewish state in existence. I don't mean Hamas members - I mean the general Palestinian population will never accept any sort of Jewish state.
If peace is impossible, and it is, the only alternatives are détente - or total victory.