The Palestinians, although they have a leginimate case, have attempted terrorism for the past 40 plus years. During that time all they have accomplished is to kill or mame innocent men, women and children. The terrorist also have divided their own people. I cannot offer a solution to the Palestinian problem but I can state that in the history of the world terrorists have not accomplised their goals through violence.
I understand why Palestinians are upset with Israelis who came in and took over their land. It would make me upset too. However, that doesn't give people the right to kill each other over tracts of land and temples. The two sides have to learn to get along and coexist peacefully despite their religious differences. Attacking each other isn't about Judaism versus Islam, it's all about a struggle for land and economic wealth.
There is never such a thing as "legitimate terrorism." People may have grievances with a government, but there is never any justification for resolving those grievances by attacking innocent civilian populations. All that does is cause suffering and further polarize issues. This applies to the Palestinians, Israelis, Iraqis, United States, and everyone else.
In my experience, most if not all terrorism is government done or sponsored to create a desired reaction out of the public, be it to drum up support for a war, or just to instill fear in the populace so they'd comply with government demands. September 11th was one major recent example of this, with the ramifications in the 11 years since clearly seen. So given that being the case I don't see any reason why Palestinian terrorism would not follow the same pattern. So no I don't think it is legitimate.