So why don't the Egyptians or Saudis give the Palestinians a little chunk and a little bit of cash up front to get some infrastructure started, and there you go, everyone is happy, right?
First of all, nobody wants the palestinians. Talk to someone from Lebanon or Syria and ask them what having a shitload of refugees is like. Secondly, the Palestinians and their problems are what we would refer to as red meat for ME pols; a lot of hot air is blown over it but the leaders know they aren't going to do anything about it. Think of abortion here.
Thirdly, and most importantly, Israel has a severe demographics problem. In a generation the Jews will be minorities in their own land. The smart Arab money in the region knows that time is the Israelis worst enemy and are happy that Israel keeps electing right wing xenophobes, because they know that a two-state solution is really in Israel's long term interests.
Currently there are over a million Arabs in Israel and almost 4 million in gaza and the west bank while there are about 6 million Jews in Israel. One is an aging population and one is a young and growing population; guess which is which.
Source : https://reason.com/blog/2012/11/27/france-to-vote-for-palestinian-statehood220