Why has Israel Turned to the Right?

At the time of the founding of Israel in 1948, the Labor Party was the predominant party in the government, and Israel was to a great extent a socialist nation. At that time the government and people were open to the concept of 2 states along the the lines that were formed at the end of the 1948 war. The Israeli people were not happy with giving up East Jerusalem but otherwise were resigned to reality. During the 1990s with a liberal Israeli government, a period of what appeared to be peace making occurred. The Palestinian Authority came into being as a first step toward Palestinian statehood. Both sides were talking to each other. Most importantly, a feeling of trust developed between many of the Palestinian Arabs and Israeli Jews. Ehud Barak offered the Clinton/Barak plan to Yasser Arafat which would have satisfied most of the Palestinian demands (but not the return of the Palestinian Arabs to the State of Israel and did not give all of East Jerusalem to Palestine). Arafat rejected it and instead started the Intifada which included terrorist attacks on Israel. The trust between the 2 populations disappeared and along with it the cooperation and mutual prosperity that had been developing for a decade. Over the subsequent years Israel built a fence to keep the terrorists out and hired foreign itinerant workers to fill the jobs in Israel that were no longer open to the Palestinians. Later, Israel tried to unilaterally separate from the Palestinians. The first step in this separation was Gaza. It was safer to start by withdrawal from Gaza because Gaza was away from the Jerusalem to Tel-Aviv population center of Israel. But then the Gazans elected Hamas to rule them. Hamas outwardly declared that it wanted nothing less than a Palestinian state including all of the land of Israel/Palestine (in other words the destruction of Israel). It backed up those statements with rocket attacks on the Israeli towns bordering Gaza. Meanwhile, Israel away from Gaza has enjoyed the end of the Intifada from the West Bank (in other words peace) under a right wing coalition. There also has been a period of financial growth both in Israel and the West Bank. No wonder most Israelis prefer to leave things as they are. Perhaps many Palestinians are actually wary of complete independance although officially they would not say so.
However, the status quo has its problems and can not last forever. The settlement people are trying to use the staus quo to further their own interests by expansion in the West Bank settlements. This is contrary to the interests of both Israel and the Palestinians. In recent weeks, it has become apparent that Israel's financial success has not benefitted all Israelis equally, in that Israelis are beginning to protest about housing prices that have become unaffordable.
So, it is necessary for Israel and the Palestinians to come to a permanent negotiated equitable plan. It will take compromise by both Israel and Palestine. It will take changes in attitude by the majority of both people towards each other. Prosperity for both sides (already happening) and some equity in the distribution of that prosperity are extremely important.