Beard and Smells

Last summer I went to Israel with my backpack and a friend. We were kindly hosted by the families of our university course mates that are living in different part and different cultural and religious contexts of this ambiguous country.
We were welcomed in the houses of jews, muslim arabs, christian arabs and we came across so many points of view and opinions that maybe we left with more confusion than we arrived there.
Skyscrapers, crowded streets, shops and plenty of soldiers (youths with rifles) is what you see around you in the main cities. Pick a car and drive for 20 miles away and you may encounter one of the many arab cities scattered throughout the state: bad roads, low buildings, mosques, few bars and restaurants, few folks, women with hijab.
Then comes the Wall, that has been built between Israel and the West Bank, a piece of land under the Palestinian government. Some cities have been cut in two halves and some familes have been split by this mighty concrete construction, risen in a heart beat.
Once we walked along a desolated road in the fields flanking the Wall. It was at sunset, a little breeze was caressing the stalks of wheat and our sweat faces. We were walking in this peaceful and calm atmosphere for couple of minutes until we saw a green Hummer approaching us. As the huge car stopped, immediately three israeli soldiers got off yelling in hebrew and aiming at us with their rifles. We were scared as hell. We were totally paralyzed.
Apparently that small road in the countryside was military zone...
I think many people in Israel live in constant fear: fear of a terroristic attack, fear of being deprived of their rights, of their houses.
Arabs live in their small arab cities with other arabs, Israelis live in their massive settlements with the other Israelis. It seems that they don't want to make a deal, they have nothing to share with their neighbors, they are fine on their own, even if their living on the same tiny territory ruled by the same institutions.
How long can this situation last?