What's inherently problematic is what pretends to pass for history, reason and logic in this essay. What is it about this topic that seems to bring out the crazy in so many people?
Fortunately, most of the main weaknesses of the piece (there are just too many) have been thoroughly exposed by both Elder of Ziyon (where I first read about it) and Elliot Abrams (to whom Elder links). Please read both of those posts first, as I'm only going to focus on one narrow excerpt that I believe demands more attention.
Nevertheless, it remains true that, in the Old Testament, God commands the Jewish state in the land of Israel to come into being through warfare and violent dispossession of the original inhabitants. Moreover, this command has its roots in the very Covenant of God with Abraham (or rather "Abram" at that time) in the Bible and it thus forms one of the core tenets of Judaism as such, at least as we understand it. No one then can blame Palestinians and descendents of the ancient Canaanites, Jebusites and others who inhabited the land before the Ancient Israelites (as seen in the Bible itself) for a little trepidation as regards what recognising Israel as a "Jewish State" means for them, particularly to certain Orthodox and Ultra Orthodox Jews. No one then can blame Palestinians for asking if recognising Israel as a "Jewish State" means recognising the legitimacy of offensive warfare or violence against them by Israel to take what remains of Palestine from them.First, and just to get this out of the way, there are no descendents of the ancient Canaanites, Jebusites and others who inhabited the land of Israel before the Israelites alive today. Claims to the contrary must be dismissed as disingenuous nonsense (with the sole exception that one archeological theory postulates a merger of the Canaanite population into the Israelite population which, if true, would technically make the Jews the only living descendents of the Canaanites). The first Arab inhabitants of the region arrived in the 7th century C.E., as part of the Muslim conquest launched from ... Arabia.
But even if there were actual Canaanites and Jebusites living in the Middle East today, the biblical passages that Nusseibeh quotes (and he does so at length) would not apply to them or their land. This is a point that is too often overlooked and cannot be stressed enough. The parts of the Hebrew Bible that describe the conquest of the Land of Israel are historical. They relate events that happened some 3400 years ago. The battle narrative, as such, is descriptive, not prescriptive. There is no denomination of Judaism of which I am aware that even suggests that it directs a course of action for today or any other time in the last three millennia. The Taanach is not a Jewish blueprint for jihad.
Which brings us to the understandable source of Nusseibeh's confusion (to be charitable). The same cannot be said of the Koran, wherein the call to conquest is most certainly not only descriptive but also prescriptive, not limited to a specific place and time in the past but a directive for the present and the future. The only enemy that Jews are exhorted to continue to fight against in perpetuity is Amalek, and the last of actual Amalekites is gone. The non-existent Canaanites and Jebusites can rest easy, and the palestinian Arabs need not fear a legitimization of offensive warfare or violence against them emanating from the Jewish State. Nusseibeh's argument on this score is at best misguided projection.
For a complete rebuttal of the other implications of that paragraph and many more, please see Elder and Abrams.