We should pity them, as well as oppose their wildest demands.
Those claiming to speak for them (the terms "leader" or "leadership" are too grandiose for their history) have brought them to blind alleys. Demanding too much (it would not be an exaggeration to say "demanding everything," or "everything imaginable") have led them to one failure after another.
You can start with their rejection of the British proposal to divide the area between Jews and Arabs, which would have provided the Palestinians (then calling themselves, for the most part, "Arabs") much more than their present enclaves in Gaza and the West Bank.
The Jews' expansion of Jerusalem and the beginning of additional settlements came under the shadow of Arab rejecting the possibility of a deal after the war of 1967.
The most recent efforts in this century by Ehud Barak, Ehud Olmert, and John Kerry brought us to where we are, with a creeping or thickening of Jewish settlements in the West Bank and new neighborhoods of Jerusalem, and Palestinian demands having trouble to being heard amidst the explosions, gun fire, barbaric executions elsewhere in the Middle East, and the diplomatic discussions mostly about non-Palestinian matters in the Middle East involving Americans, Europeans and their Arab clients.
A fair reading of all the history is that the cause of the Palestinians has been used, or exploited by more powerful Arabs for their own purposes. The plight of Palestinian refugees in Arab countries, with the partial exception of Jordan, does not signify anything close to serious concern for their welfare. Shuffling the financial bill to the United Nations and achieving refugee status unto the ultimate generation has been a collective effort by Muslim politicians to cover their own asses, and perpetuate a problem that may help them with their own restive populations.
Now that the notion of Israel as the common enemy has begun to ravel under the realities of joint efforts against Islamic extremists and Iran, and not so hidden cooperation with Israel on a range of issues, the refugee status of Palestinians has joined the ranks of many other political routines that accomplish nothing beyond their own perpetuation..
French intentions to bring a pro-Palestinian resolution to the Security Council seems to have been delayed, or maybe even canceled. The change in tempo came after the first Islamic beheading in France.
How to describe the present situation of Palestinians?
That's a question more capable of beginning dispute than a convincing answer.
Palestinian data is notoriously unreliable, as are the comparable measures for many of the Third World countries to which Palestinians might be compared.
Living standards are somewhere amidst those of other places in the Middle East and down into Africa, with West Bankers benefiting from access to employment in Israel and Israeli health care for cases not treatable in Palestinian facilities. After a decade of relative quiet, the streets, shops, and places of recreation in West Bank cities are functioning, and even lively. Individuals can travel within the West Bank and to parts of Israel more freely than in the past, and have access to international travel, mostly via Jordan.
Gaza is another story, with extensive destruction due to IDF actions against missile attacks, but also with extensive areas undamaged and functioning normally. International travel is severely restricted, due to constraints from both Israel and Egypt.
Palestinian leadership remains a major problem. The ostensible national leadership continues to serve without election despite its term having expired in 2009. Several efforts to combine the regimes led by Fatah in the West Bank and Hamas in Gaza have begun with proud announcements, and then petered out with no accomplishments.
Leaders of both are either unwilling or unable to control individuals or rival organizations that see attacks on Israelis as means of personal revenge or national accomplishment. Occasional efforts against extremists occur alongside officials, school teachers, publicists and preachers in mosques who are overt in proclaiming Palestinian rights over all of Israel, and inciting, praising, or rewarding acts of violence.
All of the above leads many--perhaps most--Israelis to have tired of Palestinians demands, to distrust their intentions, and to support Israeli politicians whose campaigns focus on domestic issues without a prominent concern for reaching an agreement with Palestinians. Moreover, the conditions described also work to the disadvantage of Israeli Arabs, or "Palestinians with Israeli citizenship."
The standing of Israeli Arabs is to a considerable extent a separate issue from that of Palestinians living in the West Bank and Gaza. Arab citizens of Israel resemble minorities elsewhere in having less desirable scores than the majority population on most measures of income, education, professional accomplishments, health, and involvement in criminal activities. They have equal political and legal rights, but no one should claim that they are treated equally compared to Jews. Again, the comparison with ethnic or racial minorities in other western democracies is appropriate.
Some of the problems encountered by Israeli Arabs are their own responsibility. Their continued support of political parties that pride themselves on challenging those holding office, rather than working with them, results in a meager allocation of resources for Arab cities and towns. The Arabs of East Jerusalem go one step further. They complain of poor services in their neighborhoods, but do not vote in municipal elections. Both populations (the Arab citizens of Israel or the Arabs of East Jerusalem who have not accepted citizenship but can vote in municipal elections by virtue of being residents) ignore the fundamental political law that you get what you vote for. That is, if the Arabs of East Jerusalem don't vote, they don't get. And if the Arab citizens of Israel vote for parties that do not play the political game of cooperating with those in power, they don't get as much as do the voters of parties that do play the political game of cooperation.
The Arabs of Israel have access to Israeli health care and higher education. Their health indicators are better than those of Whites in the US, and much better than American minorities. It helps that Arab families produce few, if any, children without fathers. Among the reasons are strict controls on young women, extending to "honor killings" of those who stray. For non-Muslim westerners, that's not an easy thing to judge.
Is there any place for the concept of "justice" in this discussion?
We can cover the issues of "what might have been" until fatigue sets in.
Issues of what should the Palestinians have by way of land passed us by in the 1930s or more recently, depending on what each of us thinks was an important opportunity for change not exploited by the Palestinians.
As current realities and prospects for near term change appear in Israel and the world, there is no chance that Israelis will agree to large scale withdrawals from the West Bank, or that any greater power will have the motivation or capacity to force such withdrawals.
There is no obvious end to this story. What appears most likely as far into the future as can be seen, looks like more of the same, however you chose to define that.
Pity is cheap. It implies nothing by way of action. We should pity the Palestinians, but not accept responsibility for the choices made by those claiming to speak for them.