You're either confusing two different things, or, if this paragraph was meant to apply to the 1948 war which was what I was talking about, just plain wrong. The majority of Palestinian refugees in 1948 fled or were expelled with their entire village at once, without the slightest distinction between insurgents and peaceful villagers - the Haganah simply didn't have that kind of intel, and in many cases of expulsion, the reason was simple military convenience of wanting to rid various strategic positions from all Palestinian presence. In other cases plain bigotry from the Haganah commanders. And in those places where staying put was a real option and Palestinians had a real choice (of sorts), you might've expected any would-be terrorists or insurgents to opt to stay so as to be able to attack Israel from the inside. If there are any among those 800 000 or so Palestinian refugees who were specifically expelled because they were known troublemakers, it must be a negligibly small minority.

Actually, the main reason for Jerusalem's status in Islam is that Muhammad's famous "journey to heaven" is supposed to have taken place there. Though during that journey he does in fact meet several Jewish prophets (not kings, I don't think, but I don't remember the details enough to be sure David or Solomon isn't in there somewhere). By far the most important "Jewish" prophet for the Islam is Abraham, precisely because he predates the codification and crystallization of the Jewish religion and nation under Moses (plus, you know, the Ka'aba), and Islam sees him as a kind of non-partisan primeval monotheist.

Besides that, I mostly agree, except that as you probably realize, Hamas doesn't represent the entirety of the Gazan population any more than Fatah represents all of the West Bank; they are merely the dominant factions (and even that only in elections that happened already quite a number of years ago).

Uh, I'm not sure where you get "the most historically hostile nations"? Israel has had a better relationship with Jordan than with any other Arab state since, well, before Israel even existed - that doesn't mean they weren't in wars against each other, obviously, but the war of 1948 might have ended quite differently if Jordan, with the best-trained army of all the invading countries and geographically the most dangerously placed, hadn't fought with one hand behind its back, and certainly without any intent of destroying the Jewish state. In 1973 Jordan even warned Israel secretly about the upcoming joint Egyptian-Syrian surprise attack. So the Israeli-Jordanian peace treaty was merely the public culmination of a long process that until then had been largely secret. Begin and Sadat's peace was rather more impressive in that regard, and they well deserved their Nobel Prize.

As for the coalition government, I thought it was a promising development - for any negotiations to have true legitimacy on the Palestinian side, it helps immensely if Hamas is involved in them, however reluctantly. Shame Netanyahu immediately did everything he could to sabotage it.