Blackbird, don't think the matter is religious or something like that....because if you argue this way, you didn't saw some islamists terrorists web site that are saying they should conquer Spain and Portugal (AL-Andalus) again because they're were the owners of the land on the past.
Israel Has been created by the same reason of Kosovo....to prevent what happen in the past with that population and to unificate the people with a same patriotical feeling (it's legal and it's in chapter 11 of UN creation letter,IIRC), the next one should be the Kurds(the people between turkey and Iraq).
yes, it's an "easy" matter to solve, but there are someone bigger in the background that peace is not a big deal, we had saw it in the past before Ytzhak rabin death, it's just a matter of US will(i don't think it will happen sooner).