Even as late as the 1930s and '40s, Palestinian Arab leaders weren't calling for their own state, but for that land to be part of Greater Syria, as it was under the Ottoman Turks.
When the surrounding Arab states invaded Israel in 1948, they took what they could of the proposed Palestinian state for themselves. Since then, they have used and abused Palestinian refugees to become human expressions of their hatred for the Jewish state.
This is why Arafat could not accept Barak's generous peace offers. Palestinian "nationalism" exists not to create a state of Palestine, but to destroy the state of Israel.
It is no surprise therefore that Palestinians, whose whole national identity is based on hatred and a desire for the destruction of others, should now turn their bodies into weapons. This is their ultimate expression of national purpose. As Golda Meir once said, "we will only have peace with the Palestinians when they love their children more than they hate us."