Holy Land, Unholy War: Israelis and Palestinians by Anton La Guardia 391pp, John Murray, £22.50

There is a fun-ride in Jerusalem, an Israeli equivalent of a Disneyworld attraction. Strapped to chairs, the audience are thrown about as they are whisked through a big-screen, computer-graphic-enhanced account of the city's past. Queues of children outside are testimony to its popularity; but as a piece of history, it is badly skewed. There is only a fleeting appearance by the Arabs in the 40-minute ride, although they have continuously occupied the city for thousands of years. The impression left is that Jerusalem was and is a Jewish city.

The Israelis and Palestinians, fighting a propaganda war, have two very different versions of history. The Israelis complain, with much justification, that Palestinian textbooks incite violence and are anti-Semitic, but the Israeli version of history is equally dubious. The strength of Anton La Guardia's book on the Israeli-Palestinian conflict is that it attempts to balance these competing histories. He strives to deal fairly with each, but that does not mean he ends up with bland judgments. His verdict on both sides is harsh, though the Israelis probably come off worse.

On the Israeli version of history, especially a tendency to blank out the land-grab of 1948, the year their state was founded, he writes: "The mental delusion whereby a whole people can preserve the memory of biblical events more than 2,000 years old and yet eradicate a centuries-old Arab history from its midst has not yet been given a satisfactory name. Nationalism? Propaganda? Religious blindness? Guilt? It has elements of all of these." He also criticises the Palestinians, whom he says should be arguing for their rights on moral grounds but instead have often retreated into anti-Semitic rants.

La Guardia was the Middle East correspondent for the Daily Telegraph throughout most of the 1990s, and is now its diplomatic editor. Many journalists covering the Jerusalem beat feel a need to write a book, but Holy Land, Unholy War is more than an end-of-term project. La Guardia spent at least three years researching the book, and interviewed participants on both sides at length. He uses their accounts to personalise the story of the conflict.

He starts where most visitors to Israel begin, with the erratic security arrangements at Ben Gurion airport, and continues along the road to Jerusalem, noting the scenes of past battles. He devotes much of the early part of the book to the Holy City and the competing claims on it by Muslims, Christians and Jews. Of the three, the Christian crusaders behaved the worst on capturing the city, and the Muslims the most humanely.

He covers the origins of Zionism in the 19th century, the steady settlement by Jews in Palestine, and the variety in Israeli society today, ranging from ultra-orthodox to secular Jews. On the Palestinian side, he dispels the convenient European myth that Palestine was almost empty when the Jews began to settle there in earnest in the 19th century. He looks at the founding of the Palestinian Liberation Organisation and all the mistakes and missed opportunities of its leader, Yasser Arafat, and the subsequent rise in the late 1980s of the suicide bombers of Hamas and Islamic Jihad.

The most uncomfortable chapter, "Victims of Victims", deals with whether it was morally right for European Jews to take this slice of Arab land. In one passage, La Guardia relates the unease of an Israeli who has trouble irrigating an orchard. An Arab appears and tells him how to make the irrigation system work. Asked how he knows, the man answers: "This is my orchard." He is not likely to get it back. La Guardia says: "If the Jews were victims of the Nazis, the Palestinians are in many ways the victims of the victims."

Most of the recent outstanding books about the Israeli-Palestinian conflict have been either academic, from Israeli historians such as Benny Morris, or works of "fine writing" from authors such as David Grossman. The best by a reporter was generally thought to be Thomas Friedman's From Beirut to Jerusalem , but that was 12 years ago, and many of its judgments were glib. La Guardia, whose account runs up until June this year, has produced a better book, combining history and news reporting.