Nelson Ascher of Europundits has posted an excellent essay on why Zionism isn't a classic nationalist movement, but rather a late-period reaction to exclusionary nationalisms - specifically, in Herzl's case, the Dreyfuss Affair.
Personally, I wonder at his assertion that there may not be any such thing as a "Palestinian people". The hostile pseudo-Judaizing fashion in which non-Palestinian Arabs treat Palestinian Arabs seems to me to demonstrate a sufficient proof that the rest of the Arab world perceives the Palestinians as "Other", to steal a Saidism. Furthermore, the irrational anti-Semitism of the Palestinian Arabs are no bar against the concept of a Palestinian nationalism; such xenophobias have, historically, been vital elements of the creation of nationalism in a population. The combination of an inability of Palestinians to assimilate in ethnically identical Arab populations, and the adoption of a "Palestinian" identity seems to put the existence of a "Palestinian" people well beyond the realm of reasonable argument.
Update: Porphyrogenitus has, as usual, more to say about the subject. I suppose I ought to extend my remarks by noting that the existence of a "Palestinian" people doesn't dictate the need for a Palestinian nation-state, nor does it require the forced Czechoslovakization of Israel into a Judean chimera. The Czechs and the Slovaks didn't even get along that badly - you never heard of Slovaks gunning down Czechs in cafes, or Czech aircraft bombing Slovakian terror cells. Given the recognition of a distinct "Palestinian" people and a working Israeli nation, what fool would voluntarily shove both cats into the same sack?
Not that I'm enthused about the current prospects for a two-state solution; the "Palestinian" people are caught between abominable popular political instincts and reprehensible political leaders. A recognition that all possible Palestinian leaders are, to varying degrees, worthless, does not remove the problem itself. Meanwhile, the Israeli insistence on pushing settlement just makes the problem worse.
An imposition of a "one-state" solution will result, inevitably, in Israeli democide and another Islamist tyranny. The current situation will, one day, peter out in a slow-motion Palestinian expulsion. I don't find myself cheering either prospect. Do you?