Had Israel treated Palestinians better and remained within their territorial limits afforded by UN that may not have come to pass. Recall Iran was one of the very few ME countries that supported the UN charter for creation of Israel. Israel then became the long arm of the forces that wanted to turn Iran into a vassal. Not surprised why they did not like it much.
Until the Islamic revolution Israel and Iran were the best friends in the Middle East, long after Israel conquered the West Bank and Gaza (1967 vs 1979). It's not the Palestinians that are the issue here, rather an excuse by Iran to constantly attack Israel and rally their population around a cause.