Israelis are not all religious fanatics, there's a lot more complex things going on there really. Probably the best book I've read on it, and granted it is a few years old, is Thomas L. Friedman's book From Beirut To Jerusalem, which is a pretty thorough primer on geopolitics of the whole region.
Your comparison to the idea of the Iroquois coming back years later isn't entirely out to lunch though. The Zionist movement essentially did just that - they showed up and claimed what's now Israel to some extent as their "birthright". It's important not to conflate Zionism with Judaism (there are Jewish people who oppose Zionism and many of the actions of the State of Israel), nor to assume either group is monolithic in their aims and ideas. Read Friedman's book and you'll come away with a much deeper understanding of the situation. In fact, I think it's time I read it again.
As ERC (to his usual standard) eloquently pointed out, the Jewish people don't have a totally unfounded mistrust of everyone else.
That said, when Balfour signed the letter to Rothschild endorsing the idea of Zionists setting in the British Mandate of Palestine, one must wonder what he thought the outcome would be.
Maybe I'm optimistic, but perhaps if Israel allowed the Palestinians to achieve some sort of statehood with a viable economy there could be peace in the region. As long as Palestinians are essentially prisoners on their own land (what little of it is left) with little opportunity economically, there will be a struggle there, and it will be violent. It's fairly easy for religious radicals to rally support in such an environment. Until such time as that happens - which means meaningful concessions as you put it, I suspect the region is doomed to constant violence.
Nemo888 said:
When I was a boy Palestinian kids threw rocks at Israeli military forces in the occupied territories. This was the extent of their "terrorist" actions. Over 40 years of occupation by a foreign force who took their land and property has radicalized them. They know the Israeli's are just biding time and have no intention of making any meaningful concessions. These are people who are citizens of a country that no longer exists who have been living in refugee camps that get smaller every year while their population increases. They were gone since AD 70. After 1900 years it's too late to come back and take your land back IMO.
It's like the Iroquois coming back to the Ottawa Valley in the year 3711 and kicking everyone into crappy reservations, taking all their property and revoking all their citizenship rights.
The Israeli's are religious fanatics like any others. They believe deep down that without Israel they will be exterminated and to my mind act irrationally out of a misguided sense of self preservation. Eventually their blatantly evil actions will come back on them.