Some history of that whole mess:
What is the "West Bank"? It was territory controlled by the Kingdom of Jordan between 1948 and 1967. Prior to Israel's founding in 1948, it was just another part of the Palestine Mandate (now divided into Israel and Jordan), controlled by the British Empire on behalf of the UN as part of the dissolution of the Ottoman Empire after WWI. Over 2000 years ago, before Rome conquered the Middle East, the West Bank area constituted the heartland of the Kingdom of Israel, which split into the Northern Kingdom of Israel and Kingdom of Judah after King Solomon's death. Because the Northern Kingdom's capital was at a place called "Shomron" ("Sebastia," according to the Romans), I and many like me, refer to this region as Yehuda/Shomron.
Israel's War of Independence ended with the Jordanian army controlling the mountainous highlands of the West Bank, and the eastern half of Jerusalem, while Israel retained control of the coast plain.
In 1967, Israel beat the Jordanian Army, the Egyptian Army, and the Syrian Army. Territory that had been controlled by them, from the Suez Canal to the Golan Heights and Jordan River Valley became integrated into Israel. The Israeli government made a policy that it would be willing to return control of the newly-captured land in return for peace treaties and an end to all hostilities with its neighbors. In 1979, Israel signed a peace treaty with Egypt and returned the Sinai Peninsula to Egyptian control in 1981.
In 1993, under the auspices of the Oslo Accords, Jordan signed a peace treaty with Israel, but also relinquished all of its claims to the West Bank, leaving the whole of West Bank to Israeli control. Under the Oslo Accords, an organization called the "Palestinian Liberation Organization" (PLO), led by Yasser Arafat would be given administrative control over predominantly-Arab cities in the West Bank, because the Israeli government did not want to govern these places, because the population of these cities (Ramallah, Shechem/Nablus, Jenin, Tulkarm, Qalqilya, Jericho, Bethlehem, and most of Hebron) were generally resistant to Israeli governance (though you'll never hear them complain about the paved roads, running water and electricity that Israel installed for them between 1967 and 1993). Naturally, this wasn't good enough for Yasser Arafat, so he orchestrated a series of bus bombings in order to pressure Israel for more territorial concessions. Israeli prime minister Ehud Barack offered Arafat nearly everything he asked for at Camp David in July 2000, and Arafat walked away. In October 2000, Arafat ordered the beginning of the Second Intifada, a 5-year campaign of terrorism against Israeli civilians. The intifada ended with Arafat's death (whether from AIDS or some other ailment, who knows-- that he was diseased is evident in every picture of him), the IDF policing the cities under PLO control, and a succession of right-wing Israeli governments who were elected with the mandate that they would not give any concessions to the PLO as long as the Arabs continued to support terrorism.
The PLO was initially founded in 1964, as a terrorist organization and foreign policy tool under the joint control of Egypt, Syria and Jordan in order to be a perpetual thorn in Israel's side. After the Six Day War ended, the PLO tried to hide among the population of the aforementioned ungovernable Arab cities. Over the next three years, the IDF chased the PLO into Jordan, where, in 1970, they hijacked several international airliners and tried to overthrow the King of Jordan. In a massacre that became known as Black September, the Jordanian army ejected the PLO, who then fled to Lebanon and ignited the bloody Lebanese Civil War, which lasted from 1975 until 1990 and directly led to the rise of Hezbollah (which murdered more Americans than any other terrorist organization before 9/11), who made their debut by driving a bomb-laden truck into the peacekeeper barracks in Beirut, murdering 241 American servicemen.
What are "settlements"?
Remember at the beginning of this wall of text, that I mentioned that Jews have roots throughout the West Bank? Regardless of whether you believe G-d exists, the Old Testament explicitly states that Abraham lived in Be'er Sheva, and is buried in Hebron with his wife, son and grandson. Isaac was bound and nearly offered to G-d on Mt. Moriah, where a retaining wall from the Second Temple still stands. Jacob's daughter Dina was raped near Shechem/Nablus, where Josef's body is buried. Rachel died on the road to Hebron, and was buried near Efrat, just outside of Bethlehem, where King David was born. The mobile temple from the 40 years of wandering in the desert was placed at Shiloh for over 300 years before King Solomon built the first temple in Jerusalem. Jericho is at the place where the Jews crossed the Jordan River into Israel. It's all there in the book. And these are some of the places that are now called "Settlements," where Jews built suburban towns, in order to maintain access to their heritage. As long as these places had been under Jordanian rule, Jews were forbidden entry. Even now, if you are Jewish, then you can only access Josef's tomb with a military escort because Shechem/Nablus is controlled by the PLO. In the case of any peace deal, the existence of these "settlements" reminds the Israeli government that Jews can't trust Arabs to let them visit their heritage, and that Jews are not willing to part with their heritage for the sake of a peace that would already exist if the Arabs behaved like normal human beings instead of being brainwashed by their leadership to support terrorism.
Here is the book list that I recommend to anyone looking to learn more about Israel:
Six Days of War by Michael Oren <---- Nothing happens in a vacuum. The first half of the book describes the events leading up to the war, from 1956 to 1967. The author is a former Israeli ambassador to the USA.
The Revolt by Menachem Begin <---- Excellent discussion of the War of Independence, the events before and after it, and how Israeli politics evolved once the State coalesced. The author led Etz"L during the War for Independence, and served as the first non-Labor-party Prime Minister from 1977 to 1983.
The Arab-Israeli Wars by Chaim Herzog <------- Excellent summary of all of Israel's military actions. The author is a former Israeli president.
Like Dreamers by Yossi Klein HaLevi <---- The different ways that everyone all over the Israeli spectrum believe in Zionism.
The Israelis by Donna Rosenthal <----- snapshot of Israel's diverse population. This book is from 2005, so the description of certain events and especially their outcomes is a bit dated.
Catch the Jew by Tuvia Tenenbom <----- All the different ways that international organizations meddle in Israeli affairs, looking for ways to blame Israel for malfeasance, as well as all the different ways that the Arabs can't keep their story straight.
Voice of Israel by Abba Eban <------ The author was Israel's ambassador to the UN.
Letters from Tel Mond Prison by Era Rapaport <---- The schizophrenia of post-1967 Israeli policy in Yehuda/Shomron, and how Israeli citizens dealt with it.
> Israeli American that has had to defend Israel my whole life
Here are some books that should help your cause.
The Revolt by Menachem Begin <---- Excellent discussion of the the events prior to the War of Independence, and how Israeli politics evolved once the State coalesced. The author led Etz"L during the War for Independence, and served as the first non-Labor-party Prime Minister from 1977 to 1983.
The Daat Mikra Bible Atlas: A Comprehensive Guide to Biblical Geography and History by Yehuda Elitzur and Yehuda Keel <--- Maps of the Middle East, Africa and Europe, showing the location of events as they unfold in TaNaKh.
Go read some books, and come back later with your findings. Keep a map of Israel next to you, and mark each location as it is mentioned. You should also grab a Bible, and mark those places, too. The whole point of having Israel as a Jewish country is for Jews to connect to their heritage. Otherwise, we might as well forget the whole thing and move to Uganda.