I can't but think that when this whole mess is studied in future centuries, those studying it will just come away thinking that it was a complete botch up, all around.
The Israelis have huge military, economic and (fading) diplomatic advantages, due to a large part in the US's unstinting, largely unequivocal support. The Israelis have been taking advantage of that by basically absconding with Palestinian land from the occupied territories. Not surprisingly, the Palestinians have taken a very dim view of this. These settlements, along with their access roads, have cut, as shown by the map posted earlier, the West Bank into many small pieces. Added to this is what seems like a concerted campaign to move out Palestinians from East Jerusalem. Maybe we only hear about the Palestinians being evicted - "legally", but how come it just happens that the vast majority who get evicted are Palestinians, who have been living there for many decades? Seems like a logical parallel effort to settlement building.
Then there are the heavy restrictions on what they let in to Palestinian areas (as discussed in the Gaza blockade running thread), which have led to economic strangulation, with resulting serious poverty and unemployment - with corresponding despair for the future. The numerous "checkpoints" don't help either. This leads to more extreme, previously unpalatable ideas seeming like excellent ideas. Thanks to Israeli heavy handedness and above mentioned land grabs, Iran was able to build up Hamas and Hezbollah into large, powerful organisations with considerable public support, which are a general pain to the entire world.
And now that the Israelis rejected what Fatah/PLO may not even have been able to sell to its own people (abandoning just about ever major demand), it remains to be seen if the relatively moderate Fatah will be able to remain in power. They might well get replaced by a more radical group, or at least have to take a much harder line to remain in power.
And will that be good for either Israel or the world? Israel will get to say that the Palestinians are a bunch of crazies after the likely increase in violence, and meanwhile they'll grab more land, evict more people, and just make the whole situation worse. Hamas will only get stronger, and might even take over the West Bank, and won't that be just fun for all?
I don't even want to think about what might happen if, for example, Mubarak gets booted out of Egypt, and a group like the Muslim Brotherhood takes over...
All in all, a complete and utter mess.
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