You remind me of something I was thinking about last night..
listening to a talk radio station.
Someone was yapping, yet again, about how there were all of these Muslim countries around Israel and that these countries should take care of the Palestians. (This is usually meant as a jab at them to deflect the inaction that Israel has done to address this issue -- ie: hell, it's their people and even THEY haven't done anything...).
Anyway, while I don't think that those countries should be expected to do anything to solve the problem, a thought did occur to me.
What happens when a Saudi prince wakes up and realizes the opportunities before him. Saudi (for example) can take several thousand acres of Desert and set them aside. Water desalination plants can be set up on the coast to provide fresh water and craftsmen could be brought in to create a city. The expense would be huge, but it could be done.
It wouldn't solve all the problem - the lands in Israel are holy to both religions. But it would/could provide a Palestians "homeland".
As for the money - I would suggest that an increase, (say $3 a barrel of oil?) be used to finance the project...now the American's are paying for the Palestian "homeland".
But the real kicker would be bragging rights for the Muslim culture and Islam religion.