To put it simply, they were dispossessed of their land in the past. That's the root of the issue, but we can't put toothpaste back in the tube. Colonialism is ugly, and it has consequences.
Currently, Palestinians continue to be dispossessed of their land in the West Bank by Israeli settlers. Their houses are bulldozed or taken over, and they are shot or forced to leave. The U.S. supplies the weapons, indirectly. The illegal expansion of Israeli settlements outside the 1967 borders is a problem. There is no freedom of movement. Palestinians cannot travel without a pass, and Palestinian neighborhoods are separated from each other by military checkpoints.
For Gaza specifically, their economy has been intentionally crippled by the Israeli blockade. Israel destroys infrastructure, and doesn't allow sufficient construction materials in for rebuilding. Israel won't allow the building of infrastructure, for example drilling wells, installing pumps, or water infrastructure (see 2017 report below). There is a more or less permanent shortage of clean water where there needn't be. Israel controls every aspect of life in Gaza.
In Israel, there is arbitrary detention for Palestinian children, lack of civil rights, trial before military courts for children, and a culture of mutual hatred with all that brings. Palestinians are tortured, imprisoned, and killed by Hamas, the IDF, and other terrorist groups.
The results of decades of this is radicalization on both sides. There is a seemingly endless cycle of hate that results in terror attacks and retaliatory attacks.
The legacy of Israel’s 50-year occupation of the Palestinian territories has been systematic human rights violations on a mass scale. One of its consequences is the impact of Israel’s discriminatory policies on Palestinians’ access to clean and safe water.
www.amnesty.org
Here is a translation of a Hebrew tweet that appears alongside a picture of U.S. M-16s being handed out to settlers:
"Minister of National Security Itamar Ben Gvir distributing dozens of weapons to ultra-Orthodox volunteers in the emergency room in the city of Elad.".
I'm also not happy about funding gun transfers to settlers who are going to use the guns to remove Palestinians from their land in the West Bank, but that's a separate subject.