Syria is 9 times the size of Israel, with 3 times the population. Yet its economy is less than 1/4th the size of Isarel's (by GNP). For Syria to compete against Israel militarily, it's hopeless. They're better off following Egypt and Jordan's example and use peace agreement as a leverage for territorial concessions from Israel and economic/military aid from the US.
If they're not willing to do that, then maybe follow China's example and put economic development first, military modernization later.
As for the Palestinians, I think in addition to different political factions struggling for control, there's some Arab/Bedouin cultural factors to consider. During the Battle of Khafji, the US army personnel observed that the Saudi and Qatari commanders and their staff would argue extensively, then retire for tea, and return later to argue some more. The chain of command was ignored in favor of bedouin-equality culture where everyone felt their opinion held equal weight.