Ok, so far i've avoided the question me and Bask seem to disagree on.
The occupation of Gaza and the West Bank.
So first, i don't believe propaganda, except that it is useful, and even necessary for people to exercise power, and the feelings it causes are real. And second right makes reality.
Thus when i'm talking about the reality of Gaza and the West Bank, i'm not talking about the legal framework established by the UN (though that is something you could use to base negotiations on, the UN can't press it's claims without the use of force.)
The reality of living in these non-state places is really challenging. I have compared it to an occupation and open air prison - because i think they are the closest comparisons. (i'm not talking about the Arab Israeli citizens, who if you support a Bi-national solution are actual living proof that it can work... though if you asked them they may merely say it is better than living West Bank/Gaza, but that they do not feel like equal citizens; this would not be surprising to me.)
The reality is Palestinians who are living in the West Bank and Gaza do not have a state; thus they are stateless, right? But the requirements to qualify as a state are thus: "a permanent population, defined territory, one government, and the capacity to enter into relations with other sovereign states".
They are right there on all along to the point where they have not got one government and that one government thus can't enter relations (ie legally binding treaty negotiations) with other sovereign states) - and the reason for this is largely due to Israeli military actions, which resulted in the election of Hamas; i don't know that this was the intent of Israeli policy, perhaps you can read up on it. But the effect of war with Palestinians was much greater than any propaganda.
Hamas was a disaster for the Palestinian cause. And it is not beyond the pale to suggest Israeli planner knew this, but even if they didn't plan it, they have taken advantage of it for the past 9 years.
If they actually wanted peace, then i think they would have acted differently. (by the way, i don't think Hamas want peace either, i think they want to destroy Israel, but they also realise they can't do that and will accept peace...)
Anyway, getting back to the reality of the situation. You can occupy Gaza and the West Bank, and act like occupiers even if the Jews have lived there since the Iron age. You can still oppress people who live there today; and that is not to say that Jordan couldn't have done a better job pre-1967. But they are not doing that job today, and the reality is Israel runs the place - like a prison.
Thus both the Israeli government and the Palestinian authorities share responsibility for the welfare of Arabs living in Gaza or the West Bank. And typically self-governed peoples tend to look after themselves, while those governed by foreigners tend to get screwed over - so it is no surprise that Israel takes a lot of criticism for their role in the internal running of the Palestinian territories.
The 'Occupation' as i call it (of the West Bank and Gaza) is comparable to any other example of an indigenous population being oppressed by a foreign force - the difference of Jewish 'right' to live there is irrelevant; they have demonstrated their right to be there be force. And nobody would have handed them some magic right if they hadn't been able to hold on to it themselves, it matters not at all where your ancestors came from, it matter what you do with your own lives. How you act, and how you allow your leaders to act.
I call it an occupation because that it the closest thing to describing this unique situation as it exists on the ground. And no amount of logical rhetoric will change those on the ground realities.
The reality of a Jewish population living in that area for thousands of years would mean literally nothing if the Germans had won world war 2.