The United Nations has recognized "observer status" for a Palestinian state. This was actually the second time. On Nov. 29, 1947, the U.N. called for partition of British-ruled Palestine into a Jewish Israel and an Arab Palestine. The Arabs began a revolt against the decision, preventing the formation of the state of Palestine. The armies of Egypt, Syria, Jordan, Lebanon and Iraq attacked Israel with their stated intention to massacre the Jews. They failed, but Egypt occupied the Gaza Strip, and Jordan occupied the West Bank, preventing the development of the Palestinian state.
In 1967, as these Arab armies were massing to attack again, Israel overran them and gained control of the Arab territory. They offered to return these territories in exchange for peace. Egypt agreed, and Israel returned the Sinai to Egyptian control. To assert that Israel has maintained some sort of occupation against Palestinians is political fiction.
Israel returned Gaza to Palestinian control in 2005, which the Hamas government used to continue its 65-year war against Israel.
It is not Israel that has prevented the development of an Arab Palestinian state.
Israel has been defending itself against annihilation for 65 years, while its Arab neighbors have been trying to destroy it, using the Palestinians in that effort.