I do have that (Peer and Local). But also..I'm not using a policy based configuration but rather route based.
My first objective is to get the site-to-site connection before I even bother with the routes.
example:
set protocols static interface-route x.x.x.x/16 next-hop-interface vti0
so..anyting going to x.x.x.x/16 would go out the S2S VPN.