I assume--and Israeli security officials confirm--that the problem is not systematic. That there are a few individuals who live in other countries and for reasons some fair, some presumably not have trouble getting in and out of the territories.
The Palestinian Olympic Committee has been functioning as any other Olympic organization that depends on a small population, thin sports traditions and a poor domestic economy.
SportsFeatures.com reports that Jacques Rogge, the president of the International Olympic Committee, promised "to raise Palestinian 'freedom' issues with the Israelis." Soon this will become a human rights issue, and maybe the U.N. Human Rights Council will take it under consideration--on par with the Flotilla incident.
By the way, the head of the Palestinian Olympics is Jibril Rajoub, a trusted henchman of the unlamented Yassir Arafat and former head of the Preventative Security Force in the West Bank. As almost everyone knows, in certain societies terrorism mixes with everything, including athletics.
Alas, no one on the I.O.C. had the foresight to protect the lives of the Israel Olympic teams at the Munich games in 1972.