As Sherman David says, the palestinians could have had a state in 1936 (Peel Commission, 1948 (UN Partition Plan), 2000 (Camp David), 2008 (Olmert Peace Plan), any many an occasion in between.  

They pay the price for their continued rejectionism or their outright desire for genocide against the Jews (see the Hamas Charter, or go back to the Grand Mufti al Husseini's alliance with Hitler).  If the palestinians ever change, they won't be "oppressed by bureaucracy".