You can still download it with SMPlayer or something like that - it usually bypasses Youtube's limitations. But here's a better video (at least it offers more in the way of context):
http://www.youtube.com/watch?v=Pa9lTvEr32w (about 10 min long). It's probably good to stress that this doesn't represent the whole Israeli society, fortunately; but the sentiment seems widespread. So, don't be too quick to assume only Palestinians make these kinds of videos - Israelis are just as capable.
Even if the video is on youtube, it doesn't mean that it is real. As in was really created by Israelis. Palestine has long been very good at being a propaganda machine.
That video is from The Real News Network (
http://therealnews.com), an American news organization - and it was filmed by their Israel/Palestine correspondent Lia Tarachanshy, who is an Israeli-Canadian journalist and filmmaker. Is that Israeli enough for you? (not that I believe your assumptions there have any merit)
Also, watch the video hdbuck linked to, and tell me this isn't the expected consequence.