I haven't read every single post in this thread, but read most of them, and I didn't see any mention of the 7-day war. Anyone remember that little dust-up? Basically, the Arabs and all teh other neighbors surrounding Israel tried to roll over Israel because it's a well-known fact they hate the Jewish people and wanted to erradicate them, once and for all. But the Jews kicked their tulips big-time, and in the process captured and held the Golan Heights (I think) for security reasons. I mean, who could blame them? We wouldn't want an enemy who'd declared an unprovoked war on us occupying a strategic location adjacent to our country, especially if we were a country the size of Israel. Anyway, that's how the whole "occupation" thing got started in (modern times). I don't think the Israelis should have had to give it back, the other side started it, and lost. We ain't about to give back Texas, New Mexico, California, et. al. to Mexico, are we?
Now, you history buffs, feel free to correct me where I've erred.