Yes, but that's not going to happen. It just isn't. And like I said above, it's hard to see how doing that would gain them substantially more than they can get otherwise.

Israel is a first world state, and Europeans tend to have rather higher standards for those. In addition to that, the massive gap in wealth and development between the Israelis and Palestinians makes it look rather similar to colonialism - something Europe was guilty of on a large scale in the not-so-distant past, which might well be precisely why people find it so abhorrent that Israel is still doing it, and reminding the European countries of their own guilt in the past.

It doesn't really compare to cases of repressing or even violently suppressing separatism, like in Chechnya and Xinjiang - separatism is a phenomenon that exists in Europe as well, in a few cases with violence, and opinions are divided on how justified that is. Though while the Chechnya war was raging, there was actually a lot of attention for that in Europe - then after the worst died down, attention wandered elsewhere. Israel-Palestine is a conflict that has been in the news and gotten attention for so long that everybody has some kind of familiarity with it, some kind of opinion on it, and so it keeps getting attention even when there isn't anything big going on. That much is true in the US as well.

As for the Jewish factor, I've said it before, the fact that the victims (well, not really the victims themselves for the most part, but their compatriots) turned to oppressors in so short a time offends the pacifist ideology of many Europeans. So in that sense, there is a connection to the Holocaust. Only an imbecile would seriously compare the modest war crimes and oppression of Israel against the Palestinians with the Holocaust, but the fact that some people still do exactly that has a lot to do with that ideology and the idea that a people that has suffered so much should if anything be more pacifist than others, not less.