Quote from I Missed Boat:
Although your references to the UN are not very relevant, given the UN's clear corrupt and biased track record (seen in the ridiculous hijacked conferences, and the fact that Israel is the most investigated country and the subject of the most special sessions in the world by the UN, despite the millions who have been massacred and enslaved around the world), you have a reasonable question about the settlements. And the occupation is anything but illegal. Israel seized it after being attacked, and they tried to give Gaza back to Egypt when they gave Egypt back teh other, oil rich lands, but Egypt didn't want it. Since then, Israel has tried to give it back to the Palestinians, along with tons of aid, and simply asked for peace in return. But with Arafat and a brainwashed mass to negotiate with, the end result was nothing but lies and terrorism.
As far as settlements, first keep in mind that settlements can be dismantled. With regard to the road map, the road map never started because the PA never clamped down on terrorism. Also, if a group of countries or peoples attacks another people (multiple times in this case), and each time they attach they lose a piece of land, what is their incentive to stop attacking if they know that they will automatically get the land back that they've lost. In other words, when countries or peoples decide to attack, there is a risk, and it is a total double standard to view this as heads the attackers win, tails the attacked loses. Israel originally was a mere 1/3 of its current, still tiny size.
Look at a map and scan the extremely vulnerable security situation Israel is in, both with other countries and with the occupied territories. This is a defacto buffer zone, very much needed until Israel can secure a peace agreement with those lands being occupied. Unfortunately, these are radicalized people, and peace seems very elusive.
Let me add one side note. You hit the nail on the head with regard to the "Palestinian" growth rates. At the time of the partition, around 500,000 "Palestinians" left their homes (due to the encouragement or coercion of Arab states, who later would do nothing to help these people). These people now make up around 3.5 million, some 50 plus years later. At the same time, however, Israel took in around 500,000 Arab Jewish refugees. The least the Arab states that massacred or oppressed these Jewish refugees could do is take in or help the "Palestinians" that they encouraged to leave. Half a million Arabs for half a million Arabs sounds pretty fair to me.