The last time there were Palestinian elections, Hamas won in a landslide. Even if Israel does agree to allow Arab residents of Jerusalem to take part in the Palestinian elections, Abbas will undoubtedly find another excuse to continue his policy of foot-dragging.
Abbas and his senior officials in Ramallah have, in fact, turned the PA into a private fiefdom. They have no functioning parliament, no free media, and no open debate. The only people Abbas consults with are his "yes-men" who appear to agree with every word he says. This is how Abbas likes matters, and he obviously sees no reason why Palestinians should waste money and energies on new elections as long as they have him as president for life.
As long as Abbas can use the issue of the elections to denounce Israel, why not do so? His friends in the European Union would be more than happy to join him in skewering Israel for not allowing Palestinian elections (if that turned out to be the case). Many EU representatives are Abbas's useful idiots, gladly parroting his every anti-Israel pronouncement.