Veritas: I agree with you. I have said before that Oslo ’93 was very telling in terms of how serious both the Palestinians (as spoken for by Yasir Arafat) and the rest of the Arab world were when it came to a Palestinian homeland. Given their response to nearly complete accession by the Israelis, it was very telling to see how little real interest there was in creating this homeland and allowing the Palestinians to make their own way.
Also, how is it that Arafat died a billionaire? Seriously. The Saudis and other Arab states pumped billions into his various bank accounts and yet nearly none of it was ever transformed into schools, hospitals or housing for the Palestinians. Instead, it was used to further the terrorist aims of the PLO and PFLP.
So, yes, I would agree with your comment that Palestine is far more useful as a rallying point against the US, Israelis and the West, then as a homeland for the Palestinians. The criminal ineptitude, corruption and incompetence of the Palestinian Authority shows how, even after Arafat has left the scene, they are only interested in perpetuating “business as usual”, even when it comes to victimizing their own people.
Then again, self awareness was never a big part of the “Arab Street”.