I appreciate your thoughtful post and agree that greed for land is at the root of the conflict- that's why secular Israeli governments have cosistently expanded the settlement colonies in the Occupied Palestinian Territories. However, I think the religious fanaticism of the messianic settlers is also a potent focre standing in the way of a resolution. As for the Islamic extremists on the Palestinian side, they will try to sabotage the process of compromise- if and when there is one- but their ability to do so would be rather limited, since most Palestinians would go for a genuine peace process. The settlers on the other hand are creating facts on the ground every day making a joke of the two-state solution.
U.S. State Dept. 'deeply concerned' about Israel's approval of new settlement construction (Reuters)
from the article: Settlers, you have failed