G-Man said:
Why is it withdrawing from gaza? Why doesn't it kick away the Palestinians?
Because removing people from their land--let alone dominating them as we can see in Iraq--is easier said than done.
Labour may call itself moderate left but it serves mostly right wing interests thus is right wing.
Isreali politics are right-wing for a reason: it's an unstable part of the world and Isreal has evolved as a militant state--not to mention that its militarism has been wholeheartedly backed by the most militant state in the world, which also happens to be the planet's only superpower right now; Isrealis that support militarism, support US intervention in the Middle East and thus get the big bucks--making truely left-wing political opposition in Isreal look like nothing in comparison.
Were there to be a left-wing party in power now, Yasser Arafat being gone might make a (good) deal possible but the fact that Sharon is in power means that there may be the usual BS talks but nothing more.
Two people, two nations. How is this not justified?
That would be Scotland and the UK. This is just two people.
If by 'two nations' you mean two states, then that is incorrect because the Palestinians have no state (their state technically would have been Isreal had things gone differently).
If by nation you mean ethnicity, then that is pretty much the same as saying people.
The deal wasn't justified from a legal standpoint because you can't found a state on someone else's territory (haven't you played Civ3?

), thus a deal solidifying that state's claim would be illegitimate. When I say justified, I mean that rejecting the deal was just if not necessarily the right decision to make given the circumstances (see below).
The initial idea behind Isreal was to create a state out of all the territories and then people (mostly Jews) from Europe would be able to live there. Right-wing zionist political influence caused there to be a push for an exclusively Jewish state (i.e. no Palestinians). Just one problem: Palestinians also live in the areas that are meant to be 'Jewish.' The state was founded anyway and like most states, then went on to expand to its maximum potential. From the moment Palestinians were given the boot, Palestinian opposition became justified (for the record, had Palestine been included into Isreal but Palestinian culture repressed by the Isreali government, Palestinians would still be justified in resisting, and were the resistors to be attacked by the Isreali military, they would be justified in counter-attacking).
So, Arafat's opposition to the deal was a justified decision if not entirely favourable to Palestinians (i.e. it was a justified decision from a legal standpoint but not necessarily from a humanitarian one; in other words, Palestinians are right to reject the deal because it would be legitamizing Isreali policy but doing so will result in the continuation of hostilities). But then, that is the main criticism of Arafat: he didn't always do what was best for his people.
So your "best deal" is to put jews at the mercy of a populations which considers killing them on a racial base to be a good thing?
This "populations which considers killing them on a racial base" is like Americans who say that everyone in the Arab world wants to do nothing but kill Americans. Granted, people get pissed when you blow up their houses killing their whole families but these aren't necessarily the ones "blowing up Jews" as some Isrealis like to put it. Most people just want to lead a normal life and are willing to forgive and forget. Others believe in justice thus will not let things go that easily but will see reason. Then there is a small minority that have a hatered that will never die and lack reason. These are what we call fanatics...psychos...nut-cases...uh...fruitcakes. The problem that would arise is that people have a tendency to make a big thing out of tiny things, so I can picture this:
Isreal makes a deal like that. Everything is going smoothly: police round up fanatics (on both sides), Palestine is built up, people get their land back people get their land back, etc. Then on day, a Jewish man is walking along Yaro street when he bumbs into a Palestinian man walking in the other direction. They pardon each other and keep walking along their merry way. Shortly afterwards, a Zionist and an Islamic Fundamentalist also walk along Yaro street and bump into each other. Instead of seeing it as an accident, a fight ensues. Upon seeing this, the people gather, old hatreds resurface and soon Yaro street is one big mess. Meanwhile the third generation youth are unaware of anything and ignore what little they see as they keep walking while listening to their MP3 players or talking on their cells. By nightfall, the riot squad has moved into control the mob. Palestinians are beaten up by a few prejudice Isreali police officers. This sets of a chain of events and by the end of the week bombs are going off again. And by next week the army is shooting kids throwing MP3 players.
It all happened because of those two religious goofs who couldn't be civilized. Most people are not like them but humans have a tendency to let themselves get swept up by unthinking mobs (sometimes just because they were grumpy that day). Instead of saying, "oh, there they go again, those two goof," Palestinians will say, "the Jews are being hostile again!" Likewise Jews will say, "the Palestinians will never stop killing us!"
The reason why such a deal would not work is because of a special kind of stupidity that affects most people on this planet: bias. Very few humans are able to put bias aside even though they know better. Few people will take it as far as wanting to kill someone though. Assume that most humans aren't that barbaric. (Palestinians may yell in the street but, well, see my example above; i.e there's a difference between yelling and doing.) Also assume that people only react in such a way when things are going VERY badly for them (and please don't insult my intelligence by saying "it's of their own making"). This doesn't happen under less desperate circumstances.