Many Israelis have observed over the years that, absent a plethora of enemies among the Arabs, they would be at perpetual war with themselves. That sentiment is reflected in Israeli politics, which remain riven with so many factions that creating a consensus on important issues is almost impossible. Israel was founded as a secular, socialist homeland for the Jewish people, but its politics represent the spectrum of Jewish identity, ranging from Socialist and extremely secular to right-wing and extremely orthodox. In addition, Israeli politics is divided between orientalist Sephardic and Eastern European Ashkenazi, whichs contributes a racial or ethnic dimension to the country's politics. And, Israel has a large minority of Arabs, some of whom identify themselves as Israeli, but many who don't, but whom are represented in politics.
With so much political, religious and ethnic diversity, Israeli politics are always in a state of crisis. In order to attain a majority in the nation's parliament, or Knesset, one of the few major parties must align itself with smaller, more extreme or divisive parties, which makes policy-making extraordinarily complicated. Consequently, it is rare for Israel to not be in a state of political crisis.
Palestinan politics are similarly in a state of perpetual crisis, but with a division that has torn the notion of "Palestine" as a political entity apart. For 45 years, the face of the Palestinians was the unshaven militant visage of Yasser Arafat, founder and long-time leader of the Palestine Liberation Organization. As reviled for the corruption of his rule as he was revered as leader of the opposition to Israel's existence, Arafat dominated Palestinian politics until his death in 2004. Whether one loved Arafat or hated him, he was successful in maintaining at least the image of a cohesive Palestinian polity. With his death, however, Palestinian politics have remained in a state of crisis.
While Arafat's creation, the PLO, and the political faction known as Fatah, dominated Palestinian politics, the 1987 creation of the Islamic Resistance Movement, Hamas, began the division of Palestinian politics that literally exploded into open warfare following Arafat's death. Hamas' rise as a political and military movement was not the first violent division in Palestinian politics, but it is the most serious. Whereas Arafat at least presented the international community with the image of one willing to negotiate with Israel, Hamas was founded and remains dedicated to Israel's destruction. Its violent 2007 takover of the region of Gaza, evicting Arafat's successor, Mahmoud Abbas, and the PLO from that densely populated area, has essentially created two Palestines: one ruled by Hamas in Gaza, the other by the Palestinian Authority (the PA) in Judea and Samaria, or the West Bank.
The resulting division of Palestine has seriously exacerbated the dysfuntionality of Palestinian politics. The PA remains the main political representative for the Palestinians, but also remains reviled for its corruption and inefficiency. The resignation of Salam Fayyad, the one widely respected PA official, further damaged the PA's ability to govern, while Hamas has found itself a victim of shifting political currents in the broader region.
To conclude, both Israel and Palestine remain in a state of perpetual political crisis. In other words, all is normal there.