With Israel I think you have to totallly ignore their words and look at their actions. Their words are delaying tactics.
They (Israeli gov.) claims to want peace but their actions show no good will, only continuous land grabs, imprisonments, exile, you know the endless crimes they have committed while dragging their feet & making excuses about having no "peace partners" or a Palestinian retaliation occurs after countless provocations and the Israelis have their vindication for draconian policies all the way to murdering innocent children.

I have no choice but to believe that the truth is becoming known and that justice must ultimately prevail. Inshallah.

GREAT QUESTION you ask!

The answer lies in a spiritual [NOT RELIGIOUS!] and political evolution revolution; and that requires we WAKE UP to The Divine within us-all others-and all of creation-and the commandment from God to the Hebrews remains:

THOU SHALL NOT KILL!

“If we want to reap the harvest of peace and justice in the future, we will have to sow seeds of nonviolence, here and now, in the present. I believe that hope for the future depends on each of us taking nonviolence into our hearts and minds and developing new and imaginative structures which are nonviolent and life-giving for all. Some people will argue that this is too idealistic. I believe it is very realistic. I am convinced that humanity is fast evolving to this higher consciousness. For those who say it cannot be done, let us remember that humanity learned to abolish slavery. Our task now is no less than the abolition of violence and war ….We can rejoice and celebrate today because we are living in a miraculous time. Everything is changing and everything is possible.”-Mairead Maguire, Noble Peace Prize Laurette

The ‘prophet’ John Lennon said and sang:

“That what people call God is something in all of us. I believe that what Jesus and Mohammed and Buddha and all the rest said was right. It’s just that the translations have gone wrong…Jesus was all right, but his disciples were thick and ordinary. It’s them twisting it that ruins it for me…

“You’re just left with yourself all the time, whatever you do anyway. You’ve got to get down to your own God in your own temple. It’s all down to you, mate…All we are saying is give peace a chance…All you need is love…Imagine all the people living life in peace. You may say I’m a dreamer, but I’m not the only one. I hope someday you’ll join us, and the world will be as one…Reality leaves a lot to the imagination….Number 9 Number 9 Number 9… I’m so very small.”

“Let all who are small come in here…Wisdom has built her house; come eat her food and drink her wine and walk in the ways of understanding.”-Proverbs 9

I’m so very small, so very small, already within the heart of every atom yet extend Beyond the Universe and connect every mother and child….Number 9 Number 9 Number 9…

http://www.wearewideawake.org/index.php?option=com_content&task=view&id=802&Itemid=197

"Shouldnt the zionists have settled in Egypt, because they appear to spend so much time in "De Nile"

Seriously to answer your question "Is it Israel’s collective psychosis, the denial syndrome?"

In my opinion the answer is an overwhelming yes.Never in the history of the world has there been a group of people who were so desperately in need of psycho analysis.
Perhaps in part the problem lies with the heritage of these people. IE the Nazi death camp surviviors. I have no statistics and I am only theorising here on the basis of an amatuer interest in psychology.To survive the "shoah" , would of meant the survival of the fittest.So perhaps this has created some kind of imabalance in the collective conscience of Israeli society.Also added to this is those who helped establish "Israel" by introducing terrorism to the Middle East as we know it today.At the tip of this iceberg the bombing of the Star of David hotel, the Stern gang, Deir Yassin to name but a few and the ethnic cleansing of hundred of towns and villages.
I will now repeat what i have said eslewhere today, nothing lasts for ever and one day Palestine will be free, what we who love palestine must insure is that we learn form the lessons of the past and we dont allow Palestine to become bogged down and suufer the same psychose as the israli suffer today.

Professor Albert Aghazarian, July 19, 2007 in an address to nearly three dozen international and Palestinian youth and this reporter who had gathered in Jerusalem for Sabeel’s 2nd International young Adult Conference.

Your article reminded me of that day, and also of what I read on page A3 of the July 20, 2007 edition of Haaretz -because of the deep schizophrenia that was printed in black on newsprint.

The page was filled with looking back two years [now 3] prior at the ‘disengagement’ from the Gaza Strip, which in reality was a redeployment for Israel continued to maintain full control of air, water and sea borders.

The story was about the Gush Katif evacuees from the Gaza Strip-who all settled there illegally under international law.

Soldiers in the Kissufim area said some evacuees continued to come back to the roadblocks at the entrance to the Gush Katif settlement and would stare into the distance, with tears in their eyes.

Haaretz reported:

“Planting the desire to return. Rabbi Kobi Bornstein, a former resident of Neveh Dekalim and leader of the anti-disengagement struggle, says, "we are not talking about breaking through fences, but about planting the desire in the people of Israel to return there." Bornstein is sure the Jews will return.

“The willingness to return if possible comes to the fore in the video interview project that Mordi Kirshner is doing for the Settlers' Committee (the umbrella organization of the evacuees). He has filmed 160 out of 300 planned interviews. "We give the person a chance to tell his (or her) story," he says. Kirshner copied the framework from the taping of survivors' testimonies for the Steven Spielberg Holocaust Videotape Archive. He says he treats the interview as testimony.

“The interviews reveal a sense of betrayal felt toward the man seen as the patron of Gush Katif (Ariel Sharon) and disappointment with Israeli society after the disengagement. Many interviewees reported dreams of seeing their former homes and waking up in the morning with a sense of happiness. “

So, I wondered then, and still do if the settlers will ever have a clue about the truth and pain of the indigenous Palestinians who were forced to flee in 1948?

750,000 Palestinians left in droves for fear of their lives by the hands of the Zionists who came to claim their homes and property, and now, those refugees have multiplied into the millions; and all denied the inalienable right to return to their legally owned property.

The state of Israel was CONTINGENT upon upholding the UNIVERSAL DECLARATION OF HUMAN RIGHTS:

Article 13.
(1) Everyone has the right to freedom of movement and residence within the borders of each state.

(2) Everyone has the right to leave any country, including his own, and to return to his country.

IMAGINE when "tons" of people of good will rise up and demand Israel uphold that!