Yeru,
who was responsible for the war in 67 is highly debateable. fact is the israelis started the war...in a so called preemptive strike (please remember that the preemptive strike of the germans against the polish and later the russians is not considered ok...why?). israel also occupied the sinai but was forced to withdraw in the yom kippur attack. since most of the water resources are located in the west bank it is highly reasonable to assume that occupation of this area was part of the plan if not the main reason.
it is against all resolutions and against international law to annex a foreign territory by means of war. israel has to adhere to these rules just as saddam and any other state has to.
lets forget the 500.000 for a moment....look at the numbers of 1946 before israel was created. there was a majority of arabs in the area...to create a jewish state (30% jews) against the will of 60% of the population (arabs) cannot (at least in my opinion) be the right thing to do.
http://www.palestineremembered.com/Acre/Maps/Story574.html
israel has illegally occupied the gaza strip and the west bank for some 35 years now (even according to UN resolutions...and international law)...the palestinians live in poverty and are to a large part refugees...what exactly do you expect them to do? what would you do if someone came and annext your homeland? it appears to me as if you would be one of the first to grab a weapon and shoot the invader.
have a good one!
Realist