Their (Jewish) history makes up our (any Christian or Muslim) religious history. To disregard this, as well as the history of the Jewish people starting from the Babylonian conquest (which, by the way, happened at a time when the joint was called Judea, Israel, Dan, etc... NOT PALESTINE) and including the holocaust, the Inquisition, et al... To disregard this may make your claim that they are not "unique" valid. The Indians did not have a "written" history which is preached throughout the European and American and Muslim world on a daily or weekly basis... If they did, perhaps they would have been a little more "unique" as well.

Israel, the nation, was perhaps founded as you suggest, as a way for Judeo-Christian/Muslims to assuage their collective guilt and ensure the "not in my backyard"... The Palestinians, Jews who never left the region, were wronged when the British left (shades of India/Pakistan/Afghanistan anyone?) and when Israel was arbitrarily created. The problem they face now, is not solvable in a conventional sense. They lost a "real war" in the late '40's which sealed their fate. They have been allowed to stay, merely through the collective guilt of the "West" pressuring Israel to ease up and not do what they will do in the next two years with the excuse (justifiable?) that they are merely fighting a war on terrorism. The more "martyrs" that strap bombs on the backs and jump onto crowded buses, the quicker the Palestinian problem goes away...

Right or wrong, Israel is armed to the teeth and the US and NATO will absolutely side with Israel should this war continue to escalate and especially if some other country gets involved. The Palestinians have a tough choice, stay and continue to count on the "goodwill" of the Israelis and the West or leave... or die.
To answer your question about "I do not understand how their plight justifies allowing (even supporting) thier forced occupation of a separate nation-state"... I can explain that, we (the US) gave them money, the Russians (through their anti-semitism) gave them the educated numbers, and now... right or wrong from inception (just like the US), they are armed to the teeth and will fight anyone who tries to mess with them. The surrounding Arab nations rightfully fear them now. They have earned their right to stay, just like every other nation that survives... Militarily.