The problem with Israel is that it occupies (by force) land and resources that belonged to other people and that Israel is constitutionally bound to maintain itself as a state for one racial/religous group: "the Jewish State" (something that is anathema to modern western civilization).
thses are two true statements always understood and used wrong.
What is occupied by force? just the Gaza and West-bank or the entire country?
Until the peace agreement with Egypt in 1980 israel had no international borders, only cease-fire lines. The 1949 borders were cease-fire lines. So where does the occupied territory start and where does it end?
I'm actually happy that most people in the world accept 1949 lines as the Israeli borders. The Palestinian could claim (and many do) more then just the 1967 occupied parts - does it matter if it was occupied in this war or that one?
The 1949 borders are also not what the UN voted on. They are a result of the war that broke out after the Palestinians and neighboring countries refused it.
Israel is a "jewish state", it says so in the decleration of independence. Only problem is it doesn't say what "jewish state" means.
So now you have interpretations of it in infinit number of ways: From an orthodox religious state, through racist "jew only" state, through "Safehouse for the world jews", to "a democratic state in the spirit of jewish culture".
Israel does make a difference between jews and none-jews. Part of it is due to the state of war it's in since it's independence (like Israeli arabs not allowed to serve in the army and certain goverment offices). Part of it due to it being open to jewish immigration (under the "safehouse" interpretation) but not so to other immigrants.
Only when safly sitting inside it's borders this issues can be worked out.
Bozon