It's a good question, Toad. I would like to hear your opinion on it. I know you know there is no definitive answer, only opinions.
Here's mine - based on little else than my gut: I'd compare it to radioactive decay.
I'll just use the word 'occuption' in the general context of occupying land belonging to others.
I think there might be a half-life of 2 generations in the case of a benevolent occupation. The more oppressive the occupation, the longer the half-life of the isotope.
For example, the benevolent occupations of post WWII Germany and Japan relieved hardships and rebuilt infrastructure resulting in both nations becoming contributors to the world, yet we still see people hostile to their generational peers after 2 generations. I guess there will be half as many after 2 more generations. Just my guess.
The contrast in the two 20th century, post-war conditions placed on Germany might be a good example.
Could Israel be considered an extreme example of eminent domain?
Imagine the UN decided tomorrow that Native Americans will be given an area of land comprising portions of Washington D.C., Maryland and Virginia to form a homeland and nation. We could even throw in the mix that China will be its strategic umbrella and supply the new nations military. And the new Native American nation had a nuclear capability.
Call me a pessimist, but I think current residents of those areas, regardless of how many generations they had lived there, would be a little upset about it. Some would even resist with force. And people in other states would be outraged by seeing their 'bretheren' driven from their land and many would advocate driving the new nation into the sea.
And that ends my analogy to the middle east today.

--------
Israeli occupation of Lebanon and Gaza has been anything but benevolent. It systematically destroyed the economy of Lebanon. Beruit used to be a beautiful and vibrant city, economically and culturally. There are just as many Israelis who were/are just as intent in driving Lebanese and Palastinians into the sea as there are Lebanese and Palastinians intent on driving Israelis into the sea.
I believe the leaders of hezbollah and Israel are both unmotivated to peacefully co-exist.
Hezbollah's reason for existence would evaporate if Israel pulled back to the blue line and released long-held Lebanese prisoners. Israel would have nothing to lose by doing that, but Israel will never do that because its leadership wants to root out moderates who seek any form of Arab-Israeli relations.
Olmert and Nasrallah both depend on each other for probes, provocation and hostility to maintain support to their causes from the people they represent, and from outside countries who support them. There are no moderates leading any of the factions or nations.
Yes, Lebanese police and much of the non-western media say without question that Israeli soldiers were inside Lebanon on July 12th when hezbollah attacked them. As the battle went on, the Israelis retreated back into Israel and hezbollah pursued them across the border.
The Israelis and western media say the opposite. Your view is based on which media you see, not the facts, whatever they may be. Or is it even relevant if both leaders are itching for a fight?