I am going to try to summarize 3,000 years of history in 25 points. Obviously there would be omissions and simplifications.
1. Birth. Around 3,000 years ago, one community in the middle-east came up with the “My god is the only true god; the rest will go to hell” philosophy. This religion was Judaism. The people were Jews. They held sway in a small piece of land around Jerusalem called Israel.
2. Exclusivity. The Jewish community did not commonly believe in recruiting other people to come into their religion. They preferred to stay exclusive.
3. Dependency. This exclusivity meant that their growth was limited. Their power was restricted by whatever influence they could indirectly wield. Whenever a neighbour or an enemy got powerful enough, Jews were enslaved or killed or expelled from their homeland.
4. The birth of copy-cats. Christianity, followed by Islam, copied the Jewish template of “My god is the only true god; the rest will go to hell”.
5. Eclipsed. Judaism was eclipsed by its daughter and grand-daughter religions due to one innovation. Christianity and Islam added one more philosophy to the template: “If you don’t join my religion, I will kill you.” These two religions grew rapidly by the sword. Christianity grew primarily in Europe; Islam in the middle-east, North Africa and Central Asia.
6. Survival instincts. Yet, the Jews somehow survived. They must have always had some useful talents and skills which made them valuable. If someone expelled them from one place, someone else took them in. When Nebuchadnezzar expelled, Cyrus brought them back. When Christians tortured them, Islamic rulers gave them refuge. And so on. (According to their holy book, they were saved by their god himself by parting the Red Sea the first time they were persecuted by the Egyptian Pharoah, so they believe they have a very powerful friend upstairs.)
7. Migrations. Jews kept migrating across the known world. They went to western Europe, north Africa, and even to India. They became a diverse people adapting to local societies. Very few were left in their ancient homeland.
8. Never forget. But they never lost their Jewish identity with an affection for their ancient holy land. They are a people with long memories.
9. The land loses significance. Meanwhile, the historical identity of the Jewish homeland, except Jerusalem, was all but erased. The Jews called it Israel. The Romans had called it Palestine. But Islam’s growth in the area turned Israel/Palestine into a Muslim and Arab region without specific historical identity.
10. European ascendancy. Eventually, Christianity in Europe turned modern. Education and the scientific revolution meant economic progress. The Jews in Europe moved up the ladder too. Economic progress does not mean progress in human values. Europeans continued to persecute Jews when they could.
11. Turkish ascendancy. Meanwhile, the Arab world was largely conquered by the Ottoman Turks. The Islamic Caliph was a Turk, not an Arab. The region of Israel or Palestine, other than the city of Jerusalem, was just an insignificant piece of land to everybody except the worldwide Jews who kept reminding themselves that they should return to their holy land someday.
12. Real-estate deals. As the gap between Europe and the rest of the world widened in the 19th century, Jews in Europe were able to afford to return to Israel, buy land and build communities. This was not the formation of a new nation-state, just individuals migrating. The local Arabs were happy to make money by selling some random piece of land to the migrant Jews. The Ottoman Sultan did not care.
13. Return of the Palestine identity. When Europeans displaced the Turks in the area after World War-I, they brought back the Roman name of Palestine for the region.
14. Genocide. Then Hitler happened. Another round of murder of Jews. But this time on a terrible industrial scale.
15. Never again. The Jews figured that living in a hundred different parts of the world was not going to keep them alive forever. In previous persecutions, thousand of Jews had been killed. Hitler showed that modern techniques could kill millions. They couldn’t afford to be weak and dispersed anymore. Back to the homeland it was with the goal that they will never be mass-murdered again.
16. Rebirth. This time, the Jews came back in large numbers to their ancient homeland and created a modern nation-state in line with what they had seen in Europe.
17. A more diverse people. Since the Jews had migrated to various parts of the world, they were now a very diverse people. Jews from Europe had European characteristics. Jews from India had Indian characteristics. Even religious belief is not an overt unifying factor since a rather large proportion of Israelis are atheists (and a significant minority are Arabs).
18. Modern society. Yet, the Israelis were able to forge a nation-state - this was their biggest success. It makes them a modern 21st century nation of positive value to the rest of the world.
19. No progress on the other side. Meanwhile, the non-Jews in the region were living with 7th century tribal philosophies. Islam. Arab. These identities might have worked to dominate the world in the 10th century. But such tribal identifiers are no match for a nation-state in modern times.
20. Missed opportunity. The ideal thing would have been for the non-Jews to form their own nation-state in 1948 when Israel was formed. It could have been called Palestine or Saladin or whatever they wanted to call it. They could have also at some point merged into other Arabic nation-states like Jordan and Egypt which had evolved in a more modern direction. But that did not happen.
21. Threat of eradication. The opponents of Israel have usually not sounded very rational in their negotiations and demands. Calls for mass genocide of Jews and eradication of a people don’t make their cause sound valid, even if they have equally been the suffering party.
22. Nation-state versus terror tactics. So, we keep seeing one-sided battles in which primitive tribal groups raid cities and kidnap women and children (like the latest strike by Hamas), and then get pummeled by organized armies and powerful weapons. Neighboring Islamic states tend to support the Palestinian cause, but they have mostly been useless, and have slowly reconciled to the existence of Israel.
23. Evangelical support. One important support group for Israel comes from Evangelical Christians in America. They believe in a prophecy that Jesus Christ will return to earth and take them to heaven. But for that to happen, the Jews have to return to the holy land, then all those who don’t believe in Christ will be destroyed and Evangelical Christian believers will get a ticket to heaven. This may all sound funny, but it muddies the picture and makes this some kind of global war between Christianity and Islam.
24. Israeli expansion. Meanwhile the Israelis did not stick to the 1948 boundaries. They kept expanding into Palestinian areas. Sometimes as a response to violence from those who wanted to eradicate them. But sometimes out of sheer greed for territorial expansion and bullying tactics. The expansion of Jewish settlements has got to a point where creating a non-Israeli nation-state in that region is now becoming all but impossible.
25. Palestinian contraction. Meanwhile, the Palestinians aren’t really making civilizational progress. The latest Hamas strike shows that the Palestinians of today are not just territorially dwarfed, but also civilizationally stunted. Every time they get hammered by Israel, they find it even more difficult to accept a peaceful solution that may help them evolve into a more modern society.
Conclusion: Don’t bet on peace in the region in the foreseeable future.