"It is the radical Palestinians who are at fault on this. They should just get on with the 21st Century and create a peaceful country that has open borders with Israel, and the region will flourish."
And how are they supposed to do that when the Israelis are continuously evicting Palestinians from their own villages so that new, and technically illegal, Israeli towns can be built? While these new towns are not legally part of Israel proper, they have the effect of shrinking the amount of land under Palestinian control. If this is allowed to continue, eventually there will be nothing left for them to create a "peaceful country" out of.
Some background info on this issue:
http://en.wikipedia.org/wiki/International_law_and_Israeli_settlements