Hi E',
Apparently 60% of the Israelis are in favor of a Palestinian state. That's good news.
However, 60% consider Arafat a terrorist and don't want to deal with him.
First, it's up to the Palestinians to decide who should represent them and then, Arafat is the most well known in the international arena. In Europe, he is no more considered a terrorist and if Israel doesn't trust him, who would they trust, then?
About the immigrants from the East: there must be a free circulation from Israel to the former east block, back and forth (like the recent plane tragedy shows).
When the Berlin wall fell, what the East-Germans appreciated most was not only being able to go to West-Berlin and further, but also to return back home (East-Germany), whenever they wished. Maybe it's different from here, for the jews, I don't really know.

Raoul