"he said when he brought them back into the land everything would be good again and that there would be peace..."
You stopped reading too soon. EVERY TIME God said they would return to the land and there would be plenty and there would be peace, He always followed that with, "if you will remember the Covenant I made with you, and keep my Commandments, and you will be My people and I will be your God" (or words to that effect). If the Jews don't recognize God as their God (many, probably most, Jews are atheists or fall into other religions), and a small minority keep the Commandments, (and those who do are ridiculed by many of the rest) then the blessings will not fall upon Israel, either. The solution to the Palestinian Problem is for the Jews to all accept God and begin keeping the Covenant. At that point, God will protect the people and the Land, and the Palestinians will slink off into the woodwork and there will be peace.
You are right when you say the prophecies have come to pass up until the point when God says there will be peace and prosperity when the Jews return to the Land, but they haven't returned in fulfillment of the prophecy yet. The ones who have ARE really Israel, but not ALL of Israel. When the rest are repatriated (and they take control of ALL of the Land promised to them by God), THEN will there be peace and prosperity.
Oh, and when the Jews did begin to return, the land DID begin to flourish. It produces more now than it did 150 years ago, or even 100 years ago, but when the lost tribes and the Jews who now live outside Israel return to their Land, it will; be MUCH more fruitful still.