I am sorry that this post is going to be long, but it is a complicated conflict and if you want to discuss it, we need to understand its details.
But, before I start, I would like to reflect a bit on the saying that Israel is systematically eliminating Palestinians, as part of some sort of long-term goal. It is definetely an anti-semitic saying. When Christian babies disappeared, it made sense to conclude that Jews are stealing them to make matza bread in Passover. When Palestinians are dying, it makes sense to blame the Jews in a deliberate extermination of Palestinians. The fact is that there were there 1.9 million Palestinians in 1990 and about 4 million Palestinians in 2010 (UN numbers) (the population more than doubled in 20 years). In comparison, there were 16.6 million Jews in the world before holocaust, and now there are only 14.4 million. Jewish population took such a hit that it has not recovered from it almost 80 years after.
Statements that disregard the facts and still blame Jews for something that they did not do/are not doing are clear anti-semitism.
And now, to the conflict.
I don't want to go to the historical roots of the conflict, because then it will lead us to questions such as "who was here first" and "why the Palestinians have P in the name of they country, while they don't even have the P letter in their ABC". It is counter-productive and will not lead us to a solution.
Instead, I would like to review the current situation.
The current situation is that the Arab population can be divided to 3 distinct groups. It is important to understand them.
1. Gaza Arabs. Gaza Arabs live under the Hamas rule. Hamas was democratically elected 10 years ago (first and only election that took place), and it immediately kicked the Phatah (PLO) from Gaza. By kicked, I mean "savagely killed PLO officials in Gaza to take over its ruling mechanisms". Gaza has two borders: a border with Israel and a border with Egypt. At this moment, both borders are closed, with the Egyptian side taking very active steps to flood the smuggling tunnels from Gaza to Egypt. The Arabs in Gaza don't have Israeli citizenship. Population: ~1.7 million.
2. West Bank Arabs. The organization that rules the West Bank is the PLO. Actually, the West Bank is divided to 3 areas - A, B and C (as was outlined in Oslo agreements in the 90's). A is the area under complete Palestinian control (3%). There are not settlements there, and there are 8 big Palestinian cities in there. B is the area under a joint Israeli-Palestinian control (25%) and there are not settlements there. C is an area under Israeli control. All of the Israeli settlements are located in this area.
Arabs in these areas have different status. Arabs in area A and B mostly don't have Israeli citizenship. Most of the arabs in area C have Israeli citizenship. Population: ~2.5 million.
3. Israeli arabs. These arabs live in Israel. They have Israeli citizenship, they vote for the Israeli parliament and in fact they have 13-17 (out of 120) democratically elected representatives in the Israeli parliament (Knesset). These arabs, because they are Israeli citizens, have all the rights that any other citizen would have. Population: ~1.6 million.
And of course there are Israeli Jews. Israeli Jews population is a bit over 6 million (6.3, if I am not mistaken).
So, when someone is saying "Israeli", I understand that as "having Israeli citizenship". It includes Jews, Arabs, Druze and other nationalities who live in Israel. If you want to address the Jews in Israel, you need to specifically state it.
There is a reason I have not addressed all the 3 Arab populations as "Palestinians". While group 1 and 2 definitely define themselves as Palestinians, the 3rd group, the Israeli Arabs, are more divided in what they are thinking. They indeed consider themselves as Palestinians, but most of them also think of themselves as Israelis. They work and study with Israeli Jews, and generally are enjoying the highest life longevity in the Arab world, thanks for the superb Israeli medical system.
Two state solution
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Lets talk about the two state solution. Two-state solution idea is to divide the current Israel, West Bank and Gaza to two countries - one for the Jews, another for Arabs. However, now that you understand the complexity of the Arab population, you understand that this is not that simple. Suppose that we somehow manage to bridge geographically between West Bank and Gaza (they are about 60 kilometers apart, if not more), without disrupting Israeli territorial integrity (if you bridge West Bank and Gaza, you divide Israel into two parts). What should the Israeli arabs do?
In fact, in the polls, most of the Israeli arabs do not want to move to West Bank or Gaza. Why would they? They have lived among Jews since 1948, their home is there. They are enjoying all the benefits that Israel offers (including very good medical system), and most of them don't want to move to the future Palestinian state.
And this is ok. I don't think that someone should force Arabs move to the Palestinian state.
This is where things are getting really complicated. Jews will not stay in the Palestinian state. PLO is strongly against it and saying that it cannot provide Jews with security in the future Palestinian state. This will leave us with a Palestinian state for Arabs only, and a mixed state for both Jews and Arabs (Israel, as it is now...).
And this is also ok, under one condition - the Palestinians need to acknowledge that the mixed state is not a mixed state, but a Jewish state. Here exactly lies the problem. Neither PLO nor Hamas are willing to acknowledge the right of Israel to exist as a Jewish state.
So, we are forced to live in a status quo. We cannot simply retreat from area C, because we will need to move about 800 thousands of Israeli Jews from their homes, and will create a terrorist state that does not accept Israel's right to exist (exactly what happened in Gaza when Israel has retreated from it ~10 years ago). We cannot stay in area C, because by doing so we create a lot of clashes between Arabs and Jews.
And we definitely cannot let the Arabs from West Bank and Gaza freely into Israel. This will lead to bloodshed and civil war between Arabs and Jews - pretty much like it was before 1948.
The solution is to have a real leadership at the Palestinian side that will be brave enough to acknowledge Israel's right to exist as a Jewish state. This is something that must happen in order to the two-state solution to become a real option. Until then, we don't have any other option - but to wait.
The purpose of this post is to make sure that you at least understand how complex this conflict is. Listening to anyone that says that "Israeli are occupiers and killers" or "All Palestinians are terrorists", without understanding the basic geography and population distribution, is creating hatred that only delays the solution of this already almost impossible to solve conflict.
And I did not even begin to talk about different views among Israel Jews, population distribution and geography...
I hope this will sched some light on the issue.