I personnally see the actual ennemity between Jews and Arabs not as a religious conflict, but a political conflict centered mainly around Israel's existence and military pro-eminence in the region.
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Yes, in a way. Of course Israel's military pro-eminence in the region is the reason why Israel (and Jews in the middle east) still exist.
It is no religious conflict since both Hebrew Bible and Quran agree that G-d gave the land of Israel to the children of Israel and ordered them to live there (and not turn back).
The conflict was caused purely by secular nationalism introduced by Europeans to the Arab world in the late 19th century and especially during the 1930s when Germany started making alliances with Arab nationalist leaders in Iraq and Egypt (Nasser) as well as Israel (Husayni family).
Too many arab state feel treathened by them, and since the oppressed people in the region happens to be muslims, the populists in the neighbouring countries are creating a false "Islam is under attack" pretence.
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The oppressed people in the region are Muslims, Jews, and Christians. Most Jews are no longer oppressed since they either died or fled to Israel. The remaining oppressed people are mostly Muslims. The Christians have powerful protection (except in Egypt) but Muslims are common targets (see Sudan).
Despite the fact that Arabs in Gaza and the West-Bank have a higher standard of living than people in Jordan and Egypt, they still count as "oppressed", I suppose. It's difficult for Israelis to understand that given that Israel would love these people to stop the war and live in their stupid country already, if they find time to found it.
Islam has been under attack ever since the Wahabis took Mecca from the rightful owners (the Hashemite clan, i.e. Muhammed's family) and since the Khomeini idolaters (and that's the only word I have for people who have gigantic posters of a political leader) destroyed the Iranian empire which, in Islamic and Jewish tradition, onces restored the children of Israel to the land of Israel.
That, and the Palestinians are becoming more and more religious, since they are becoming more and more desperate, and they are turning to fanatism. If one of them looses his life to fight Israel, they hope that their food ration will be given to their families. No job in the Gaza Strip means no economy. No economy means no necessities. Overpopulation, no supplies, no trade.
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That's another thing I don't understand. There are millions of people in Africa who are actually starving. They don't have supermarkets filled with food and they cannot just transfer difficult patients to Israeli hospitals, yet they do not murder and do not scream death to anybody.
I don't think fanaticism is a result of poverty, since it almost never appears among the poor. Palestinian Arabs have for the last 100 years been among the richest people in the Arab world (except for the oil countries). And extremism was particularly rampant not among their poor but among the rich and powerful al-Husayni family.
The perhaps truly poor in the region, the bedouins, were not among the extremists and often (and in the majority) supported Israel and the Zionists. Many Israelis can tell war stories from their days in the army fighting with highly respected bedouins. In fact one of Israel's three most famous war heroes was a bedouin (Amos Yarkoni, he took a Jewish name; the other two were an Iraqi Jew and a native Jew born to European immigrants.).
In order to understand the conflict I think it is important to get rid of old but false principles like "poverty leads to extremism leads to terrorism". The terrorists are found among those rich enough to buy weapons. They are not the poor.
I have a Moroccan friend - muslim - and she often told me that the couple she consider as her grandparents are Jews. And they have mixed schools between Muslims and Jews in Morocco.
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Morocco is the only country outside Israel in the middle east that has schools attended by Jews and Muslims/Arabs. Morocco is also the only Arab country that withstood Arab nationalism. The Moroccon king refused German and (Vichy) French orders to deport Moroccon Jews to the death camps (unlike the leaders of Syrian and Egyptian nationalists, including the al-Husayni family of Yasser Arafat, who cooperated with the Germans and recruited Muslims for the SS).
I would exclude Morocco from the conflict as the few soldiers they ever sent to the war against Israel never even arrived in time. And the king of Morocco never seemed very eager to fight Israel (or kill any Jews at all for that matter).
There is no religious war over there. Jews and Islam are perfectly compatible, except when the topic of Israel is mentionned.
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I woiuld say "especially when the topic of Israel is mentioned".
This is what _I_ believe about the Jewish right to the land of Israel (note that "We" is G-d):
To Moses We gave nine clear signs. Ask the Israelites how he first appeared amongst them. Pharoah said to him: 'Moses, I can see that you are bewitched.' 'You know full well,' he replied, 'that none but the Lord of the heavens and the earth has revealed these visible signs. Pharoah, you are doomed.'
Pharoah sought to scare them out of the land: but We drowned him together with all who were with him. Then We said to the Israelites: 'Dwell in this land. When the promise of the hereafter comes to be fulfilled, We [shall assemble you all together.
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And when Moses said to his people: 'O my people, call in remembrance the favour of God unto you, when he produced prophets among you, made you kings, and gave to you what He had not given to any other among the peoples. O my people, enter the Holy Land which God has assigned unto you, and turn not back ignominiously, for then will ye be overthrown, to your own ruin.'
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A religious Jew might say this:
I truly believe that G-d gave the land of Israel to the children of Israel. It's the foundation of Judaism. I also believe that Israel was occasionally overran py pagans (Babylonians, Romans) and restored by believers (like Zoroastrian Iranians).
I also believe that whoever attacks Israel will either be defeated (because G-d protects His people) is on Israel's side or will win if G-d has planned a third exile. In that case Israel will be overrun again by an army of non-believers. But I do not believe that a third exile is planned.
I don't see how a Muslim, who allegedly "submits to G-d's will" can see it any different.