It's obvious that Israel doesn't want the Palestinians to have their own state, either. You might want to take a look in the Old Testament and count the number of times Israel slaughtered hordes of folks and claimed that Jah gave them the victory.
Why should they? "Palestinians" as we view them do NOT exist. The state of Israel was bought and paid for, ancestral claims aside. The "Palestinians" are displaced jordanians the British settled in Israel right before they pulled out of the country to avoid a Jewish world power and bring about exactly the situation and strife we have today.
http://palestinefacts.org/pf_faq_palestine.php
First of all, the Palestinian Arabs do have a state. Its called Jordan. During the League of Nations Mandate period, the land originally set aside by the League of Nations as the Palestine Mandate was supposed to provide for a national home for the Jewish people. The British were given the authority to manage the Mandate and help the Jews make the transition to independence. Instead, almost 80% of the original Mandate land was carved out and arbitrarily made into the Arab country of Trans-Jordan (later renamed Jordan). In all the land of the Mandate east of the Jordan River it was "No Jews Allowed". West of the Jordan, the 20% part of the Mandate, the British restricted Jewish immigration and gradually adopted policies that were more and more pro-Arab. Palestinian Arabs are the majority of the population of Jordan even today.
All of Israel today, and the Jewish lands historically called Judea and Samaria (now the West Bank) plus Gaza are entirely within the 20% slice of the British Mandate left over after the creation of Transjordan. The British Mandate Overview page gives a table with the details of this geographical distribution of the Mandate lands.
In all of the history of the region, there never was a Palestinian Arab state. The Palestinian Arabs are not a distinct people. With very few exceptions, they are a highly mixed group of immigrants from all over the Middle East and even further regions: Assyrians, Persians and Romans from ancient times, Turks, Armenians, Greeks, Albanians, and Italians, Afghans, Kurds, other Europeans including Germans, Bosnians, Circassians as well as Egyptians, Bedouins, Algerians, Sudanese and many others who have been identified in the population. Most of today's inhabitants can trace their history in the Palestine area no further than the early 20th century when many came to Palestine attracted by the Zionist prosperity and, after World War I, the political stability of the British administration of the Mandate.
Palestinian Arabs have been offered the opportunity to create a state many times, starting with plans advanced during the British Mandate which the Arabs rejected. Then the United Nation partition plan of 1947, which brought Israel into existence, included a nation for the Palestinians, but the Arabs rejected it. Over the decades since there has been plan after plan that would bring peace to the region and a state for the Palestinians: all they had to do was let Israel live in peace. Arabs rejected all these plans, up to and including at Camp David in 2000 and Taba in 2001, and kept the armed struggle going.
It should also be remembered that from 1948 to 1967 the land known as the West Bank, historically Judea and Samaria, part of the Land of Israel, was held by Jordan. During that period the Gaza Strip was held by Egypt. There were no "occupied territories", no "settlements" or any of the other excuses used today to attack Israel. But there was also no peace. Palestinians and the neighboring Arab countries continuously attacked Israel and worked for the destruction of the Israeli state. At the same time, there was no call for Palestinian independence or statehood even though it could have been done by Jordan with the stroke of a pen.
On November 15, 1988, a Palestinian state was proclaimed by Yasser Arafat at a meeting of the Palestine National Council in Algiers. This was the second declaration of such a state, the first being at a meeting in Gaza in October 1, 1948 during Israel's War of Independence. Both the Gaza and the Algiers declarations are largely irrelevant today, notwithstanding that the Algiers Declaration received enormous attention at the time. Since the PLO did not control the intended Palestinian territory, it was only a symbolic act.
In all probability there will be an independent Palestinian Arab state some day, but only after the Palestinian Arabs find leadership that is committed to peace with Israel
As a result of the Six Day War, Israel gained all of Jerusalem, the Golan Heights, Sinai, the Gaza Strip, and the West Bank (historically known as Judea and Samaria). Palestinian Arabs often insist on using the term "occupied territories" to describe these areas, usually connected to the assertion that they fall under the 1949 Fourth Geneva Convention. Yet, Palestinian spokesmen also speak about Israeli military action in Area A as an invasion, an infringement on Palestinian sovereignty. The use of both forms of terminology is a contradiction. If Israel "invaded Palestinian territories" in the present, then they cannot be regarded as "occupied"; however, if the territories are defined as "occupied," Israel cannot be "invading" them.
Israeli legal experts traditionally resisted efforts to define the West Bank and Gaza Strip as "occupied" or falling under the main international treaties dealing with military occupation. Former Chief Justice of the Supreme Court Meir Shamgar wrote in the 1970s that there is no de jure applicability of the 1949 Fourth Geneva Convention regarding occupied territories to the case of the West Bank and Gaza Strip since the Convention:
... is based on the assumption that there had been a sovereign who was ousted and that he had been a legitimate sovereign.
In fact, prior to 1967, Jordan had occupied the West Bank and Egypt had occupied the Gaza Strip; their presence in those territories was the result of their illegal invasion in 1948. Jordan's 1950 annexation of the West Bank was recognized only by Great Britain and Pakistan and rejected by the vast majority of the international community, including the Arab states.
International jurists generally draw a distinction between situations of "aggressive conquest" and territorial disputes that arise after a war of self-defense. Former US State Department Legal Advisor Stephen Schwebel, who later headed the International Court of Justice in the Hague, wrote in 1970 regarding Israel's case:
Where the prior holder of territory had seized that territory unlawfully, the state which subsequently takes that territory in the lawful exercise of self-defense has, against that prior holder, better title.
Israel only entered the West Bank in 1967 after repeated Jordanian artillery fire and ground movements across the previous armistice lines; additionally, Iraqi forces crossed Jordanian territory and were poised to enter the West Bank. Under such circumstances, even the United Nations rejected Soviet efforts to have Israel branded as the aggressor in the Six-Day War.
Regardless of how many times the Palestinian Arabs claim otherwise, Israel cannot be characterized as a "foreign occupier" with respect to the West Bank and Gaza Strip. Fundamental sources of international legality decide the question in Israel's favor. The last international legal allocation of territory that includes what is today the West Bank and Gaza Strip occurred with the League of Nations Mandate for Palestine which recognized Jewish national rights in the whole of the Mandated territory, including the sector east of the Jordan River, almost 80% of the original Mandated territory, that was given to Palestinian Arabs and Emir Abdullah to create the country of Trans-Jordan (later renamed Jordan). Moreover, the rights under the Mandate were preserved under the United Nations as well, according to Article 80 of the UN Charter, after the termination of the League of Nations in 1946.
It is important to observe that, from the time these territories were conquered by Jordan, Syria and Egypt in 1948 to the time they were gained by Israel in 1967, the territories were not refered to as "occupied" by the international community. Furthermore, the people living in those territories before 1967 were not called "Palestinians" as they are today; they were called Jordanians and Egyptians. (In fact, before Israel was founded Jews and Arabs alike who lived in the region were called Palestinians. The newspaper was the "Palestine Bulletin" and later the "Palestine Post" before becoming today's "Jerusalem Post", the Jewish-founded electric company was "Palestine Electric" and so on.) There was no call for "liberation" or "national rights" for the Arabs living there and no Palestinian nation was discussed.
No UN resolution requires Israel to withdraw unilaterally from the territories, nor do they forbid Israelis from going there to live. In particular, the often-misquoted UN Security Council Resolution 242 (and related Resolution 338) make no such demand or requirement. The demand that Israel stop creating "illegal settlements" is similarly baseless.
Under the Oslo Accords, the "peace process" started in 1991 at the Madrid Conference, Israel agreed to withdraw from the disputed territories and Yasser Arafat's Palestinian Authority (PA) was given control over land chosen so that more than ninety-nine percent of the Palestinian population lived under the jurisdiction of the PA. But the committment to Israel's security that was the backbone of the Oslo agreements was never honored by the PA and Israel was forced to periodically re-enter the ceded territory to quell terrorism. In 2000, Yasser Arafat rejected sweeping concessions by Israel at Camp David -- promoted by US Pres. Clinton in an attempt to reach a final peace agreement -- and the Palestinian Arabs turned again to violence with the Al Aqsa Intifada. That is, after the PA was governing nearly all Palestinian Arabs and a generous peace offer with international backing was on the table, the only response Israel got was increased violence. This is the sole reason Isreal continues to have a military presence in the disputed territories