It is a common assumption that Palestinians want their own state. This is undeniable in the abstract, but the on-the-ground reality is that Palestinians living in Israel prefer their so-called Zionist enemy to the P.L.O. From Daniel Pipes, “‘The Hell of Israel Is Better than the Paradise of Arafat,’” Middle East Quarterly, Spring 2005:

When given a choice of living under Zionist or Palestinian rule, they [Palestinians] decidedly prefer the former. More than that, there is a body of pro-Israel sentiments from which to draw. No opinion surveys cover this delicate subject, but a substantial record of statements and actions suggest that, despite their anti-Zionist swagger, Israel’s most fervid enemies do perceive its political virtues. Even Palestinian leaders, between their fulminations, sometimes let down their guard and acknowledge Israel’s virtues. This undercurrent of Palestinian love of Zion has hopeful and potentially significant implications.

Pro-Israel expressions fall into two main categories: preferring to remain under Israel rule and praising Israel as better than Arab regimes. . . .

First, for all the overheated rhetoric about Israel’s “vicious” and “brutal” occupation, Palestinians are alive to the benefits of its liberal democracy. They appreciate the elections, rule of law, freedom of speech and religion, minority rights, orderly political structures, and the other benefits of a decent polity. There is, in short, a constituency for normality among the Palestinians, difficult as that may be to perceive in the hate-filled crowds that so dominate news coverage. Second, many of those who have tasted Israel’s economic benefits are loathe to forego them; however impervious Palestinians may seem to economics, they know a good deal when they have one. Third, the percentage of Palestinians who would prefer to live under Israeli control cited in the estimates noted above—an overwhelming majority of 70 to 90 percent—point to this being more than a rarity among Palestinians. This has obvious implications for Israeli concessions on the “right to return,” suggesting that Palestinians will move to Israel in large numbers. Fourth, it implies that some of the more imaginative final status solutions that involve the redrawing of borders will be hard to implement; Palestinians appear no more eager to live under Palestinian Authority rule than are Israelis.

In word and deed, then, even Palestinians acknowledge Israel as the most civilized state in the Middle East.

For the quotes from Palestinians, though Pipes offers no footnotes, read his full essay.

You might also want to check out my essay on the Palestinian refugees.