If the only reason Israel is occupying this land is for protection,
I did not say that, Israel occupied the land in a war it did not start but did win. Israel was willing to return it in exchange for peace according to resolution 242, the arab world's reaction was "No peace, no recognition, no negotiations". Egypt and Jordan later changed their position and got every inch of their land back together with substantial american financial aid.
why then are they building permanent settlements there?
They built "permanent" settlements in the Sinai and Gaza. As it turned out those settlements were not that permanent.
When you oppress a people for decades, crushing their homes, bombarding them, arresting them, torture them, kill them, you can't expect them to play nice once you let go of the iron grip.
Blah, blah blah, give me a break. When you start several wars, when five-seven countries invade one, when 350 million arabs want to drive 5 mln jews into the sea, when 0.2% of middle eastern land Israel occupies is 0.2% too many, when you start intifadas, murder civilians, fire rockets....and then you have your ass handed to you and whine, whine, whine, whine, whine...
The reaction of Gaza-Palestinians was no surprise to anyone
Glad you recognize that. Why don't you try to explain it to your buddy grininho who still seems to think that should Israel withdraw from territories it will be immediately embraced by their arab brothers. At least you and I both realize that unilateral withdrawals lead to intensified attacks against Israeli civilians.
Israel offered to create a state on 73% of the West Bank,
* Israeli redeployment from 95% of the West Bank and 100% of the Gaza Strip
* The creation of a Palestinian state in the areas of Israeli withdrawal
* The removal of isolated settlements and transfer of the land to Palestinian control
* Other Israeli land exchanged for West Bank settlements remaining under Israeli control
* Palestinian control over East Jerusalem, including most of the Old City
* "Religious Sovereignty" over the Temple Mount, replacing Israeli sovereignty in effect since 1967
In return Arafat had to declare the "end of conflict" and agree that no further claims on Israel could be made in the future. Despite the considerable concessions by Israel, Arafat chose not to negotiate, not to make a counter-offer but to just walk out.
http://palestinefacts.org/pf_1991to_now_campdavid_2000.php