This issue has been cussed and discussed for decades.  It is relatively simple.  Those people who now call themselves Palestinians were nomadic people who occupied an area that is now Israel, but was once part of Syria, Egypt, and Jordan.  They were kept segregated in that area because it was considered the most unusable of the lands of those countries.  They were genrally seen as trouble makers by the powers that be in those countries and were not wanted.  They still are not wanted but are somewhat given tacit support as those countries use the unifying propaganda of their plight as a social control over their own subjgated populations.  They do serve a purpose  but assimilating them into thier societies would be counter productive to that purpose.  The various Arab tribes that became nations used to spend most of their time fighting each other.  Now they have a common foe to spar with in Israel, so they stopped killing each other.  To take away that common foe by eliminating the reason for the conflict would not be good for the kings of these lands. The average syrian, Egyptian, Jordanian, might actually then have time to see what it is that they do not have and how the Theocracy of Islam has failed them.