The danger this uninformed bigot poses is laid out in a must-read post from Jeffrey Goldberg:
Palin has positioned herself as a territory maximalist, arguing for the righteousness of continued Jewish settlement of the West Bank, including those parts of the West Bank, presumably, beyond the security fence. This line of argument places her well to the right of the position taken, late in his career, of Ariel Sharon. As I have pointed out on innumerable occasions, this position, seemingly Zionist (or super-Zionist, even) on the surface, actually undermines the idea of Israel as a Jewish state, because settlements are the vanguard of eventual binationalism, not of a Greater Israel. Israel simply cannot absorb the West Bank's Arabs and remain either a Jewish state or a democracy. For an American politician to argue otherwise is a danger to Israel. Sarah Palin encourages the most recidivist elements of the Israeli right, and it is absolutely vital for the Israeli right to grapple with demographic, political and moral reality, before it's too late.