I think that Israel is indeed the only strategic ally the USA has in the region. As such, the relationship with them needs to be kept strong. That does mean we should hold their hand a bit, in terms of finances. Now, as to the Palestinians, Israel DOES over react when dealing with them. They are hamfisted, and as such draw much of the fire on them. That said, the Palestinian situation exists because Egypt, Syria, Lebanon, Iran and Iraq all want a mad dog in Israel's back yard. The PLO and Hamas are all funded and supported by these governments. Egypt prints anti-semetic text books that are used for Palestinian schools. Now, how to fix things? The first step would be for the UN, not Israel, to secure the border to the two countries. This will keep Israel from over reacting to the Palestinians. Two, Palestine must be cut off from the regimes that would use it as an attack dog against Israel. I'm not sure how, but that's the idea. Three, the Palestinians should get UN aid for setting up schools, farms and businesses. They need to be self sufficient as quickly as possible. In theory, its harder to give up a comfortable life than a hard one. So, civilizing the situation is key. Make everyone comfortable, and keep them calm.