I realized while reading about the latest chaos in the Gaza Strip that I didn't really know that much about the history of the conflict in Palestine. So, I did a little research.
It's probably convenient to start around 1915. The problem was the British were in the middle of WW I and needed both (1) Arab military support against the Turks and (2) Jewish/Zionist political and monetary support on the home front especially from people like the Rothschilds.
Unfortunately it appears the left hand didn't know what the right hand was doing (or didn't care). While Sir Henry McMahon seemed to promise Sharif Hussein the Palestine region (there was no Ottoman province called Palestine) along with other Ottoman Empire Arab territories as a homeland in exchange for military support, Arthur James Balfour told Lord Rothschild "His Majesty’s Government view with favour the establishment in Palestine of a national home for the Jewish people, and will use their best endeavours to facilitate the achievement of this object..." in the Balfour declaration.
To be fair the British claim they excluded Palestine in the promise to Hussein because the area wasn't exclusively Arab and Balfour stated in his declaration "...nothing shall be done which may prejudice the civil and religious rights of existing non-Jewish communities in Palestine..."
Of course this hedging by the British just made things worse and both sides believed the British had double crossed them. From 1920 to 1940 or so the Arabs, Jews and British took turns fighting each other in what amounted to a three way bitching contest during the Palestine Mandate granted to the British under the League of Nations.
The British took time off for WW II but then things picked up in 1945 pretty much where they left off with a three way pissing contest. The British finally threw up their hands and gave it up in early 1948 dumping the whole mess in the lap of the United Nations.
The UN came up with a partitioning plan which called for a Jewish State comprising 53% of the area, an Arab state comprising 46% and an International Zone containing Jerusalem and Bethlehem. The Jews were allocated more land than the Arabs despite Arabs being in the majority (1,270,000 to 610,000) because large scale Jewish emigration from Europe was anticipated.
The Arabs didn't want to have anything to do with this plan. Just about all Arab states voted against it in the UN and as soon as it was adopted they started a shooting war with the Jews in Palestine that has pretty much been going on with short periods of relative quiet ever since.
The core of the problem lies in the Palestinian refusal to accept the existence of the State of Israel. In 1948 they argued why should Arab land be given to the Jews to compensate for crimes committed against the Jews in Europe?
While that argument may have had some merit in 1948 (but VERY little because the Palestine Mandate in 1920 made it clear that a Jewish State was to be established in Palestine), 66 years later it's a bit of a moot point. Realistically each side needs to recognize the other and figure out a way to divide up the territory as equitably as possible.
Everyone else needs to go in the corner and be as quiet as possible.