From Wiki (re. the PI):
"However, within Palestine itself the Sunni Islamist political party Hamas, the elected government of the Palestinian territories, is deeply divided, with its officials making both highly supportive and highly negative statements. Shiite political party Hezbollah rejects the initiative. Members of the Izz ad-Din al-Qassam Brigades, Hamas' military wing, committed the Passover Massacre on March 27, 2002 to sabotage the Beirut Summit. The bombing as well as other attacks lead to a deeper escalation of the al-Aqsa Intifada and, as of 2009, the initiative has remained dormant with Palestinian and Israeli leaders unable to move further."
"The Arab League issued instructions barring the Arab states from granting citizenship to Palestinian Arab refugees (or their descendants) "to avoid dissolution of their identity and protect their right to return to their homeland".
Syrian Prime Minister, Khalid al-Azm, wrote in his 1973 memoirs:
Since 1948 it is we who demanded the return of the refugees [...] while it is we who made them leave. [...] We brought disaster upon [...] Arab refugees, by inviting them and bringing pressure to bear upon them to leave. [...] We have rendered them dispossessed. [...] We have accustomed them to begging. [...] We have participated in lowering their moral and social level. [...] Then we exploited them in executing crimes of murder, arson, and throwing bombs upon [...] men, women and children-all this in the service of political purposes.
Jordan is the only Arab country which uniformly gave citizenship rights to Palestinian refugees present on its soil. Other countries, especially Lebanon, gave citizenship to a fraction of the refugees. However, there remain a huge number of refugees living in camps in Jordan, and in fact it has the largest such population with over one million Palestinian refugees."
Now you can take Wikipedia or leave it. But there seem to be two points: 1) an unresolvable political situation between the Arab parties (including Palestinians) and 2) a historical refusal by the Arab States (Jordan excepted) to help defuse the Gaza population time-bomb. The average woman in Gaza gives birth to five children in the one of the most densely populated areas in the world.
I don't mean to absolve Israel of its complicity in this horrific situation, but this situation is much more complex than a simple Arab/Jew dichotomy.