It's easy for me on the opposite side of the world, in safety and relative wealth, but I find the whole thing just sort of ridiculous. (That's not to say it's not tragic... somehow, it's both.) Okay, I'm a bit fuzzy on details, but this is my big-picture understanding:
Historically, Jews moved to Israel. Somehow that's wrong, and bad, and "stealing." They were parcelled out a country, along with the "Palestinians" (who according to my understanding didn't really previously exist as a political group, except in response to Jewish immigration), following the departure of the British.
The Palestinians declared war against Israel and attacked in league with other nations, hoping for a land grab, at basically first opportunity. Didn't work out; Israel claimed the invaders' land as their own. Created a bunch of refugees, as Palestinians either fled from their homes or were evicted.
The Palestinians looked for a new home among their comrades-in-arms... no one wanted 'em but Jordan, but they preferred to be permanent refugees, and their political policy became explicit terrorism, teaching young children to throw homemade bombs at policemen and hate and what-not.
This gained them great sympathy in the press.
Bowing to growing foreign political pressure, both sides starting meeting for "peace talks" which were invariably derailed by some boming in a Tel Aviv marketplace by "extremists" who didn't want any peace other than an Israeli-free peace. Over decades of this, Israel fluctuated between an F-U attitude and agreeing to cede lands to the creation of a Palestinian state, because the best way to discourage aggressors is to give in to their aggression.
Now, individual Israeli citizens look to build new homes near their families, even in these territories occupied since wars decades past. This is politically inconvenient, because Palestinians want that land. And so we (the United States) are mad at Israel for not stopping their own citizens from building new homes, by force, so that this land can more readily be given to people who ostensibly hate them and want them eradicated.
Jesus God, it's all so lame.
People are dumb and nothing's easy, but I'd love to see one of the following... Either the Palestinians just give up already and find a new home (I hear Alaska is willing to pay people to move there, and there's plenty of room), or the Israeli govt. assists the Palestinians in gaining full citizen status in Israel, or they go ahead and make Palestine an officially independent country... but stipulate that Palestine has to care for the Jews living "in their land," and treat them equally on pain of losing their newly-found independence.
I mean, if Palestine is ready for the big-time, then they'll have to be able to accomodate minority populations, right? Or will the creation of Palestine require some sort of ethnic cleansing? Hell, if people want to build new homes that are otherwise legal, let them, I don't care whether they're Israeli, Palestinian or other.