If you've got five hours of your life to invest in understanding the Israeli-Palestinian conflict, then I suggest you plop down to watch the following movies: Munich and then Paradise Now. Munich has been in theaters since around Christmas, while Paradise Now may be out of DVD. Paradise Now is an independent motion picture which didn't play to huge audiences, but deservedly won a series of awards.
Both revolve around real issues in the conflict in the Holy Land. Both protagonists are conflicted individuals who are determined to do what is necessary for their futures, but wonder about what the true cost and nature of their actions will be.
The response to the Munich Massacre has been debated, at least as far as who was actually involved and to what extent. However, the legacy of Yuval Aviv is quite immaterial and the relevant historical narrative is spelled out here. So after you watch the movie you will understand that Spielberg very skillfully "gumped" his characters around the plot for the sake of consistency, inserting them into the historical context whether they may or may not have been there.
Additionally, the very same events were scrutinized by George Jonas in his book "Vengeance" which was published in 1984. Jonas himself comments on how perspectives have changed in 20 years, to the point where the movie, while it maintains similarity to his book in detail, doesn't do the same for message. Vengeance seems to follow more along the plotlines of Spygame, where a covert agent has been sold out by the CIA. Jonas doesn't agree with Munich's underlying message, but he addresses his differences quite intelligently.
Paradise Now incorporates every mainstream argument for continuing the conflict with Israel, at least as it pertains to the Arab side. It is a very introspective look into the staregy of suicide bombing and skillfully makes a point that the world cannot afford to ignore.
Clearly, both movies question the status quo from either end.Hopefully in tandem, someone will figure out that business as usual will only mean more of the same. Both inject humanism into the violence which has universally served only to devalue and dehumanize Israelis and Palestinians. As long as those attitudes prevail, there will be no let up in the atrocities, no matter how many peace maps are drawn up.