I know that this is probably an innocent comment on your part, but the wording of "with Palestine" implies that there are two places in a fight, one called Israel, the other called Palestine.

This is a simplified explanation of why this label is not correct.

Palestinians are in fact three distinct groups of people who all self-identify the same way. There are the group of people who are Israeli citizens. They used to identify as Israeli Arabs, but they've recently (in the last five or so years) begun to self identify as Palestinians.

Then there is the group in the West Bank formerly Jordan. This is land that Israel captured in the 1967 war, when there was a unified effort by the neighboring nations to attack/destroy Israel, but Israel won. It returned a majority of the land it captured (more than two thirds), kept some. But Jordan did not allow citizens living in this land the ability to return to Jordan, and they became refugees, being neither Jordanian (according to Jordan) or Israelis (according to Israel).

The situation is similar in Gaza, except there is is Egypt, and is on the other side of the country. The refugees there are former (or descendants of) Egypt.

Both places have had the opportunity to petition the UN to be a recognized country, but they've not done so.

You may ask why these three groups call themselves the same thing. Why "Palestinian"- because for many of them, this unified label also implies in it the idea that Israel should not exist and the land should be reverted back to Palestine, the name that Israel (and Jordan) had before it was split and allocated as Israel.

The PLO, the governing body of the West Bank, would like to see the destruction of Israel and it to be returned to Palestine, but they're also pragmatists and some (many) believe they would accept a two-state solution.

The governing body of Gaza, however, is Hamas, an internationally recognized terrorist organization which is on a religious mission to kill all non-Muslims (and by Muslim they mean a very specific sect/belief system) from the land- no Jews, no Christians, etc. They're very similar in ideology and methodology to ISIS, but ISIS and Hamas don't get along either due to differences in their own philosophies.

Lastly, there are Israeli Arabs, that is fully Israeli citizens who were part of or descendants of the land from when Israel was formed (or who migrated to Israel) have grievances due to the way Arabs are treated in Israel. There are legitimate grievances on their part for sure, and there are a wide variety of solutions- from political reform, new laws about equality, or funding (think US inner-city poverty) to the destruction of Israel, and everything in between.

There are problems with creating a two state solution because there's no land border between the West Bank and Gaza. They're on opposite sides of the country, essentially. It's a bit more complex, but look at it on a map and you'll see the issue. It would be unreasonable for a unified people to have Israel sitting in the middle of its country, or for Israel to give up a huge swath of land and be split into two.

And Israel, under the previous government, allowed 400,000-500,000 people to create settlements in disputed land that was supposed to be kept free of people in an agreement founding the demilitarized zone.

If you're an American, that's basically the population of Washington, DC. Now what the heck do we do with those people?

But my point is there's no single "conflict with Palestine"- there are separate conflicts, each with their own peoples, issues, grievances, etc.