Bregman, Ahron and Jihan El-Tahri, Israel and the Arabs, An Eyewitness account of War and Peace in the Middle East, NYC, TV Books, 1998. Based on the BBC/PBS TV documentary prepared for Israel's 50th anniversary, this book provides unique first-person interview materials. It is also unique because it is edited by an Israeli and an Arab who agreed about the content. Because of the nature of the approach - a TV documentary, the book provides a series of close-up vignettes rather than an exhaustive or scholarly history.

Chacour, Elias, Blood Brothers, Chosen Books, 1984. A Galilee priest tells of his fight for brotherhood and coexistence between Palestinians and Israelis.

Collins, Larry and La Pierre, Dominique, O Jerusalem, Touchstone Books, 1988. Gripping history that covers mostly the 1948 struggle for Jerusalem.. It is told with a distinct pro-Israel bias, but you will have trouble putting this book down no matter what your convictions, and it will help you understand a key issue in the conflict.

Harsgor, M. and Stroun M. Israel-Palestine: L'Histoire au-dela des mythes, Editions Metropolis, 1996 (also published in Hebrew by Givat Haviva  1997). If you can read Hebrew or French, this comprehensive and moderate book will give you a wealth of information about the Palestine-Israel conflict from a dovish Zionist standpoint.

Herzl, Theodore, The Jewish State, Dover Publications, 1989. Online Downloadable Book This little pamphlet was written by Theodore Herzl to help popularize the Zionist movement. It is available as a free downloadable e-book at MidEastWeb. It is essential reading to understand the mindset of the father of political Zionism.

Kimmerling, Baruch and Migdal, Joel S, The Palestinian People: A History, Cambridge, Harvard University Press, 2003.  This book is a valuable summary of the conflict as it evolved from the Palestinian side:
"This remarkable book recounts how the Palestinians came to be constituted as a people. The authors offer perceptive observations on the status of Palestinian citizens of Israel, the successes and failures of the Oslo process, and the prospects for both Palestinians and Israelis of achieving a peaceful future together. A dispassionate and balanced analysis that provides essential background for understanding the complexities of the Middle East." Rashid Khalidi, University of Chicago.  

Laquer, W. and Rubin, B. The Israel-Arab Reader, Penguin, 1995. Basic source documents in the history of the Arab-Israeli conflict.

Lewis, Bernard, The Middle East: A Brief History of the Last 2,000 Years, Touchstone Books, 1997. Lewis is a highly regarded scholar and authority on Islam in the US. This account is essential for putting events in the Middle East into perspective.

Morris, Benny, The Birth of the Palestinian Refugee Problem, 1947-1949, Cambridge University Press, 1987. This book documents the role of the Israeli government and leadership in helping to create the Palestine refugee problem. It is not kind to Israel and Zionism, and it fails to  set context of the actions against the background of the Arab and Palestinian attempt to dismantle Israel and expel its Jewish inhabitants - a fault remedied in Righteous Victims.  However, it is so clearly the objective work of a professional historian that it must be accepted as factual whatever your sympathies. Morris's research formed the basis for numerous "Post-Zionist" histories critical of Israel. Most of these are derivative polemics that achieve their aims by selective quotes. It is worth reading the original if you want the truth.

Morris, Benny, Righteous Victims : A History of the Zionist-Arab Conflict, 1881-1999, Knopf, 2000. A balanced and readable history of Israeli-Palestinian relations, from which partisans of either side will draw their own conclusions, and those who seek truth will find that it is complicated and illusive. Morris documents the subjugation and humiliation of Jews under Islam, the miserable state of Palestine under Turkish rule, the plans by Zionists to force Arab immigration, the Nazi associations of the Mufti, the perfidy of the British against both sides, the flight and expulsion of Palestinian Arabs, and the history of each war. I f you are going to read one book about the Israel-Palestine conflict, read this one.

Oren, Michael , Six Days of War: June 1967 and the Making of the Modern Middle East, Oxford University Press, 2002. This book has won praise from both friends and foes of Israel, and is probably the best history of the war to date. "Michael Oren, a senior fellow at the Shalem Center in Jerusalem, deserves credit for producing the most detailed, the most comprehensive and by far the best-documented history that we have on this short but fateful war...Throughout the book, Oren uses the full panoply of sources in four European languages, Hebrew and Arabic. He is one of the first writers to take advantage of the thousands of official documents that were recently declassified under the 30-year rule. The products of this prodigious archival research, and of the interviews that Oren conducted with about 60 policy-makers, are used to very good effect. The result is a fast-moving and action-packed narrative that sheds a great deal of new light on all the major participants in the war and on the conflict and cooperation between them." Avi Shlaim in The Guardian http://books.guardian.co.uk/review/story/0,12084,728941,00.html