hopefully it's not as bleak as you've described. However given the duration of this conflict of decades past and the evolving younger generations who have little in common with the Palestinians or any other Arabs, it is not surprising that some apathy exists. It's unfortunate that Jews from Arab lands have not taken a greater role (especially in their voting patterns) in bringing the cultures' commonalities closer in understanding of one another. Of course there are many exceptions to which they have shown a mutual interest in coexistence, eg. the Geneva Accord individuals working to establish a peaceful agreement for both peoples, business/technological or medical partnerships, agricultural, etc. All these sectors can play a pivotal role in enhancing the atmosphere in the region. Money and economics talks more than religion - fortunately or unfortunately.
Hamas' Khaled Meshal met with Saeb Erekat in Qatar (Haaretz)
from the article: Sharon's real legacy - keeping the Arabs out of sight