Two related points about this issue -
When Wikimania was held in Alexandria, Egypt, a Palestinian from either the WB or Gaza (I can't remember exactly) was denied visa by the Egyptian authorities. I know that because I talked with him through IRC after the event (though I lost contact with him, and I don't remember the exact details anymore). When Wikimania was in Taipei, an Egyptian Wikipedian asked me to help him get a visa from the Taiwanese representations in either Tel Aviv or Amman, but unfortunately they demanded personal attendance, and this person was unable to reach either of these cities. I'm afraid technical and political issues are always going to be, to some extent, an obstacle to international events, as much as we try to work around them.
Israel is the only country to which Palestinian residents of the WB and Gaza can enter without a passport, and since a Palestinian passport is not widely recognized as a travel document, it is much easier for them to access places in Israel. For example, in case of serious health problems, an Israeli hospital is always the first option for these people, because it is more accessible than any other medical facility outside the Palestinian Territories. So basically, unless we hold Wikimania in Ramallah or Gaza City, Haifa is one of the best options for Palestinians. It is regrettable that not many seized the opportunity.
Dror K