It seems you are a bit uneducated on the situation, young one. The Palestinians' state is supposed to have its capital in East Jerusalem. The Israelis have no legitimate claim to that part of the city under international law and have been building it up with "Jew settlements" for years now. This is not a minor issue. And since most of Israel's water comes from Palestinian territories up near the Jordan, the water thing is more important to Israel than Palestine at the moment. Gaza's water is polluted mostly from debris from the past several conflicts, and Israel refuses to transport necessary equipment to deal with it into Gaza so that point is likewise moot. Also, while you say that Palestinians are taught to hate Jews, I wonder if you know that a majority of Israelis report that they would refuse to work for an Arab? This situation is not as black-and-white as you make it seem. I wish it was, though.
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UN secretary-general calls for repercussions over strike on Syrian refugee camp (AP)
from the article: U.S. frustrated with Netanyahu over stalled proximity talks