One of the problems with "civilized" warfare is that nothing ever gets settled.
You can keep this low intensity conflict going for centuries now that you have established borders , geneva conventions , human rights etc.
Modern ideas that has merit , but also make countless generations having to go thru the same ordeal forever.
The leadership on both sides knows nothing is ever finale , and will shoulder minor casualties for "the greater cause" indefinetly.
In the past when might was right. The stronger (better economy,larger population,better technology etc..)
were able to fund an ongoing war, pay mercenaries , hire more/better troops than his less succesfull neighbour.
Then when the dust settled , you either slaughtered/displaced your enemy or assimilated them.
Either way , you made sure you would not have to fight the same war over again 20 years later.
And everyone was better off in the longterm for it.
Roles change over time.
In the past Israel was the weak part, now it is the arabs(using the palestinians as strawmen) that are weak.
What happens when the balance of power shifts the next time?
I think both sides get exactly what they want out of this neverending conflict.
Both sides leaders get to show its population "You need us".
Take it from Gary Breecher (Mark Ames) "The Warnerd" :
Most people are not rational, they are TRIBAL: "my gang yay, your gang boo!" It really is that simple. The rest is cosmetics.this link paints a broader picture
http://en.wikipedia.org/wiki/List_of_wars_involving_Israel