>One thing that could help pushing their solution to a >more peacful one is increased education. This is where >the US and the EU should contribute with funding

totally agree, but let's not forget that we're talking about a people who part of the time don't even have electricity.
I think, especially in the US, a lot of people seem to forget that a large portion of the Palestinian still live in the camps the Israelis put them in 50 years ago. When I say camps, don't think of concentration camps, but camps nonetheless, maybe they're more like reservations. And yes for a large portion of the last 50 years Palestinians left the reservation in the morning to go work in Israel, afterwhich they could return to their shanty towns.
Compare it to the Mexican immigrant in the US who cleans the house for a rich white American for a crapy wage and has to go home to a bad neighborhood WITH the difference the Mexican isn't the immigrant, but the white American is and on top that used to be your land he built on.