The real culprits are its greedy neighbours like Jordan and Egypt, who instead of having a proper Israel and Palestine state wanted to grab all the land for themselves. Now the Palestinians don't even have 20% of land that was demarcated in the 1947 plan.
And today problem still falls on the Palestinians, since day one they have been constantly looking outward for a white knight in shining armour who will come and save them. That will not happen, they will have to get their independence on their own. Just like Pakistan or South Africa. They need a home grown honest leader like Jinnah or Mandela, but unfortunately they have only gotten corrupt bastards like Arafat and Abbas.