I don't have any problem with the territory of Israel, but they are occupying the Palestinean territories and Golan Heights. They should pull out of the Palestinean areas and allow for the formation of a Palestinean state. Golan Heights is more complicated.
All of Israel is a Palestinean territory, if you want to get technical. Where do you think the land for Israel came from in the first place? The whole place was called Palestine until it was partitioned by the United Nations in 1948. That's why the Arabs have never accepted Israel, though most Arabs care nothing about the Palestineans in reality.