One can trace the origins of the modern morass in the Middle East back to the Jewish Diaspora in 132-135AD, triggered by successive religiously and culturally inspired revolts against the Roman Empire.
Fast forward 1800 years to about the year 1900, where Palestine is ruled by the tottering Muslim-Turkic Ottoman Empire. In World War I, in an effort to break the terrible gridlock and stalemate of the trenches of the Western Front, England is looking to opening up other fronts to press home its strategic advantages, keep Russia in the war, and hopefully knock Germany’s ally, the Ottomans out of the war.
To do this, the English make promises that they can’t all keep in good faith. They stir up restless tribes in Arabia to rebel against the Ottomans (specifically the Saudis), and makes promises to Jewish Zionists groups in Europe. This war against the Ottomans remains peripheral to the War; but after the War, England and France are given modern day Syria, Jordan, Palestine, Israel, and Lebanon as ‘protectorates’ through the League of Nations.
Due to the Balfour Declaration, in 1917, England committed itself to a sort of Jewish homeland. They soon regret this, and by like the early 20’s, really want to take it back. England is now the world’s largest Empire by far, but it has to govern this vastness, and protect itself against a number of rising powers (Japan, Germany, Soviet Russia) at the same time. Jewish immigration to Palestine starts to cause friction with the local Palestinians. At this point, it is not clear what the eventual relationship will be between the Jews and the Palestinians; as long as they are both ruled by an empire, they remain subjects, but the Jews are taking over, economically, and in terms of land and property as well. There is tensions, and bad omens, rioting, and the like, but no progress is made between the wars.
Hitler, World War II, and the Genocide result in most European governments and most european people, and most of the Jews in Europe committed to a political national home for the Jews in Palestine. Put simply, the European powers feel guilty, the Jews, hard-hearted, set about building their own future. Tension continues to build; the English, Jews, and Palestinians all mutually suspicious and wary of each other.
In 1948, England abandons the Mandate, and the Jews, led by David Ben-Gurion, declare the State of Israel, and define its borders as exactly the same as England’s mandate for Palestine. The next day, four Arab countries attacked the new state. Egypt, Jordan, Syria, and Iraq are all repulsed by the Israelis (who have been preparing for and anticipating this situation). It is interesting to note that the UN, on meeting to decide how to politically create and define what happens when the English leave, determine an Israeli state, a Palestinian state, and Jerusalem is to be ruled as a special international city. Anyway, this first war generates most the technical problems that still exist today. A massive refugee problem is created, Israel takes half of what was supposed to be the Palestinian state (the West Bank), including Jerusalem.
I should note here the Suez Crisis (1956). Egypt, under Nasser, a modernist, nationalist, a slightly socialist popular leader, annexes the economically and strategically important Suez Canal, to the outrage of the old imperial powers, France and England (whose Canal it is). “Wearing the morality-play masks of Great Powers, punishing transgressors of the international order,” they, with the help of Israelis, invade and capture the Suez Canal. The US here, consumed with the rivalry with the Soviets, basically refuse to back the Brits and the French up, and we basically tell them to leave, which they do. The entire world is watching and everyone notes that England and France must ultimately follow the US’ lead; this event marks both the end of the European empires, and also the start of active US engagement in the Middle East. The US has always been a bit torn with its strategic goals in the area. There is the need for cheap oil. There is the political sympathy and support for Israel. They are also concerned with checking communism (the Soviets supply the Anti-Israel Arab states for this entire period). This results in strong support for Israel, and a mutually embarrassing alliance with Saudi Arabia.
The next incident is the Six-Day War, where Israel pre-emptivly attacks Egypt. They gain the Golan Heights, and for a number of years control the Sinai desert. This war marks the European and global disenchantment with the Israelis. Fear of Islamic jihadism, and the need for cheap oil quickly propels most countries to the side of the Arab nations and the Palestinians. There is also the Yom-Kippur War, where the Arab nations surprise attack Israel on their holiest day. Israel wins, in large part because the US resupplies their military with advanced weaponry. This action is the start of the idea of the US as the “great enemy” behind the Israelis.
At this point, the threat of the Arab nations attacking Israel decreases with the threat from the USSR. The problem shifts towards terrorism, demographics, identity politics, oil prices, religion, etc. Constant Palestinian rioting, terrorism, civil disobedience, coupled with the decline of the external military threat from the Arab states, bring the Israelis and the Palestinians together to the Oslo Accords in 1993. The background to this is that the US, under Clinton, is throwing its weight around and brings Egypt (which after the end of the USSR needs a new patron) to the support the ‘peace process.’ The accords seem to bring real peace within reach; Palestine becomes its own country, and recognizes the right of Israel to exist (the two-state solution).
There are lots of unsolved issues, but the feeling at the time is that, given time, and cooling feelings, the more delicate negation (who controls Jerusalem, water rights, and final borders, etc) will be possible. Lots of things happen to prevent this from occurring. The liberal Israeli leader is assassinated by a far-right Zionist Jew; there is the First Iraq War; there is ongoing extremist violence. Arafat, the moderate (and from an older generation) Palestinian leader is marginalized.
Both sides, up to the present day, while outwardly agreeing to the Oslo Accords, are playing a game of bad faith. Israel, even though it has the economic and military advantage, persists in a siege mentality. The Israelis, aware that any final peace settlement will include a sort of demographic border, where who ever has a majority will gain that area, are bulldozing Palestinian villages and homes and building their own homes and village instead.
Kerry’s recent activity in the area is an attempt to put some fire back into the old Oslo Accords. (I really don’t know any more details than that). The remark of the Israeli general along the line of “Kerry should just get a Nobel Peace Prize and leave us alone” is illustrative of the cynical calculations of many of the actors in the area, the siege mentality of the Israeli generals, and the general disenchantment with any sort of negated peace. The US is the only actor with the power, however, to bring about a peace settlement of any kind. To do nothing then, is not really an option, even though effectively, that is what is happening.
Neither side has a moral high ground, and I would be suspicious of anyone who claimed such a high ground for one side or the other. That being said, Israel, as it has the economic and military advantage needs to be the grown up in the relationship. Palestinians have no education (and what they do get is fundamentalist, extremist Islamic), no really economy, and like prison inmates, have nothing better to do then try to escape in desperation. In the long term, I think that Israel is doomed; I’m not sure they are able to think clearly and objectively about their long term survival.