>The key issue that everyone seems to forget is that it's Israel who keeps territories under occupation for almost 40 years. Giving up those territories would be a great step towards peace, wouldn't it? Then offering a significant refund would naturally come next.

Beg to differ. There was a war fought. Gamal Abdel Nsser of Egypt was bent in destroying Israel. He got other countries (mainly Syria) to join in. They lost in 6 days in 1967. They lost the territories.

Peace talks were tried many times, with the mediation of several American presidents. President Carter got President Assad of Egypt to agree to peace. They got the Sinai back.

President Clinton got Prime Minister barak of Israel to offer the best deal that the Israelis had ever made. The offer was reaching the limit of what Barak could do without destroying himself politically with his people. The smart Palestinian leader these people had - Arafat - said no deal. He lost their best opportunity to make peace and get most of their territories back without a fight. He did not accept the deal. Barak's government fell and a right-wing hard liner (Sharon) was elected.

The Palestinian situation is due mostly by their own leaders greed, shortsightedness and incompetence.
Even Sharon, at the end of his tenure gave the Gaza Strip up unilaterally when he saw that the Palestinians are not aceepting any deal for peaace. They do not want peace. Ask Hamas (their current government). Enough said.