Willie Rennie reports back after trip to Israel and Palestine

2.29.50pm BST (GMT +0100) Tue 10th Jun 2008

Only fifteen minutes from Tel-Aviv's stunning Mediterranean beaches swarming with holidaymakers was a 500 mile long security wall - or as the Israelis anxiously assert is actually a fence. It was difficult to imagine that I was at the centre of one of the most deep rooted, complex and protracted disputes in the world that has a resonance not only throughout the Middle East but also pricks the conscience of the West caught between the responsibility they feel towards Jewish people and the shocking conditions endured by the Palestinians.

Councillor Monroe Palmer, from the Lib Dem Friends of Israel, organised a first rate fact finding visit for myself and Parliamentary Colleagues Sandra Gidley and Norman Lamb. The visit explored both sides of the divide but what became abundantly clear was the massive gulf in understanding. One of the few agreements between the Israelis and the Palestinians was the pessimism for a stable and secure two-state solution and lasting peace.

There is genuine fear of Palestinians amongst the Israelis. It's little surprise considering the suicide bombs, thankfully diminishing now, and the Qassam rockets from Gaza which have killed 14 people in the town of Sderot in the last two years. We saw the stockpile of these exploded Rockets at the local police station and the devastating effect one had on an Asquelon health centre and a modest home in Sderet only 800 metres from Gaza. What is disappointing is the belief that even tougher security measures will bring a lasting peace. I was astonished that it's almost impossible to enter or leave Nablus in a private car as the movement restrictions are so tight. The Israelis believe that the security fence/wall combined with a more sophisticated and focussed military effort in the West Bank has reduced the security threat but with 607 checkpoints, barriers, trenches and other blocks restricting movement within the West Bank it is only a matter of time before that pressure cooker explodes, fuelled by the levels of poverty and poor quality of life - half of Gazans are in poverty and in the West Bank it's a quarter.

The UN Office for the Coordination of Humanitarian Affairs have a map that demonstrates how the Israelis have salami sliced the West Bank and everyday the Israeli settlements grow - 900 extra homes were announced whilst we were there - further threatening its basic integrity. I don't have an issue with the construction of a border wall or fence to protect a nation's territory from attack but I do have when it is used as a land and water grab further expanding the Israeli state at the expense of the Palestinians. The Government may say that other land will be returned as part of any resolution of the conflict but this act does not instil any confidence amongst an already suppressed Palestinian population - in fact it breeds resentment and anger. For every new Israeli building constructed in the Palestinian territories another breath of hope is crushed. I find it staggering that the Israeli Government believes that constructing new homes helps. It may help them to buy off the minority parties (the election threshold is only 2.5%) which prop up the governing coalition but that's putting party advantage before the peace process.

This is one of the fundamental problems facing both the Palestinians and the Israelis - a failure of leadership. Following a donations scandal, Ehud Olmert's coalition is in danger of crumbling and unsurprisingly this dominates his political focus at the expense of pursuing peace. Despite his new talks with the Syrians over the Golan Heights it is difficult to believe he would be able to carry the Knesset or the wider public with any emerging proposal. The Israelis are also highly concerned by the threat from Iran. They believe that, even if they come to an agreement on a stable two state solution, their security will not be guaranteed because of a devious and aggressive Iran.

As well as the obvious divide in the Palestinian leadership between Fatah in the West Bank and Hamas in Gaza there is also a lack of energy and ideas amongst the Fatah politicians following the failure of the Oslo peace process and the routing of Fatah from Gaza. They are at a loss about what to do next in the process. It's not easy to conduct regular accurate opinion polling in Gaza or the West Bank but it is clear that the political momentum is not with Fatah. The 2.5 million Palestinians in the West Bank are exasperated and Fatah has little contact with the 1.5million Gazans.

The answers to today's problems are often found in history but this is a futile in Palestine and Israeli. Whatever the assertion made by one side it was almost always challenged by another historical fact from the other.

There were, of course, examples of hope including the cross ethnic Hadassah hospital and the economic development on the West Bank but leaving on the flight back to Heathrow I could not help but think that peace is a long way off and that nothing much will progress before I visit again.