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Your arguments are fundamentally flawed in a few areas. For one you assume the dictatorial monarchs in power (with tactic support from the West especially the US) would never do anything to upset their population. Dictators are in power not because of the will of the people. The will of the people in the region has been for centuries determined not by themselves but by outside influence and the puppet regimes in power which recieve crucial support from other powerful states to stay in power. 

In the past a colonial power may hope for a problem to go away in they keep the way things are long enough. Problem is we are no longer living in the 19th century. Israel is a colonial settler state which came into being quite undemocratically. It's easy to hope for the Palestinians to give up hope for a return to their homes or a just compensation from a racist, arrogant and imperialist point of view but nowadays we are thankfully much more civilised and don't let countries go unanswered for their actions as more than ever we as a world see it from the point of view of the victims of injustice who are usually weak and oppressed. And why support Israel as a Jewish state? Why bring in vile Islamic/Absolute Monarch regime like Saudi Arabia as an example? Why not say Norway which is a secular liberal democracy with one of the best living standards in the world?

Like I said before Iran and Syria have both said they will support whatever the Palestianians want and in Syria's case they want the GH back. That is their official foreign policy and not calling for the destruction of Israel regardless of Palestinian wishes as many seem to believe. Iran has offered to normalise relations with Israel if they withdraw to the pre 1967 borders but this was rejected as were most peace overtures by the Arab World. The only crime Iran is commiting is the crime of independance. The US hates countries that show independence. Hence they get demonised especially if they are much weaker and oil rich.