Daas Yochid,
The Palistinians only had a problem with the Jews living there when the Jews started taking control of the land. They did live there before the land was taken over and if they were given a say in how it should be divided up I truly believe that more moderate voices would prevail. Right now you have millions of people with no say in the government that controls their lands and see the military that is controlling their land as a mortal enemy that wants them dead or gone because they are not the right ethnicity. The longer this goes on the worse the problem will become.