Mohammed Hassan al-Atrash, a man whose life story is a microcosm of all that has befallen the Palestinian people over the past 63 years, smiles ruefully at the prospect of a Palestinian state winning the support of most countries in the world at the United Nations next week.

"I am a simple man," he says, leaning on his sturdy walking stick. "I don't know about politics. But from my life experience, I don't think we will gain anything. What is left, after the settlements, the military zones, the wall, the bypass roads? You think you can build a state on a few scattered villages?

"If the UN is supportive of the Palestinians, they should stop Israel from doing all this. Talk is easy. What's important is what is happening on the ground."

It is a view shared by many Palestinians. As world leaders engage in frantic last-minute diplomacy in an attempt to avoid a damaging car crash of competing interests in New York, Palestinians shrug and get on with lives governed by checkpoints, permits, house demolitions, land confiscation and harassment from Jewish settlers. A vote at the UN, they say, will not end Israel's occupation.

The story of Atrash, 68, and his village, al-Walaja, which perches on terraced hills between the ancient cities of Jerusalem and Bethlehem, is the history of the Palestinian people over more than six decades.

It starts when the village was captured by advancing Jewish soldiers from the Palmach brigades in the war that followed Israel's declaration of independence in 1948. Thousands of villagers fled and the armistice line – the Green Line – was drawn through their land, taking 70% of it into the new state of Israel.

For the next few years, five-year-old Atrash and his family lived in a cave, from where they could glimpse their old home, before they moved in with relatives in the part of Walaja on the Palestinian side of the Green Line. The land was dry and difficult: almost all the village's 30-odd water springs were across the valley in Israel.

In 1967, after the six-day war, triumphant Israeli troops occupied the Palestinian territories, where they remain. The Israeli authorities redrew the boundary of Jerusalem, and half of Walaja's remaining land was annexed to what Israel claimed as an undivided capital.

A few years later, in 1971, the settlers came. More village land was swallowed up to build the colonies of Gilo, and later Har Gilo, illegal under international law.

In the mid-1980s, the Jerusalem authorities began issuing demolition orders for scores of homes built by the villagers, who until then had not even known they lived inside the city boundaries. They were told they did not have the correct permission, and were billed for the destruction after it was carried out.

And, now, bulldozers and diggers are swallowing up swaths of the village's last lands for Israel's separation barrier. When complete, the concrete and steel edifice will encircle Walaja, leaving a single entry and exit point controlled by the Israeli military. Every day, Atrash sees more of his land disappearing under the relentless march of Israel's giant machines.

The judder of the machinery is also disturbing, possibly fatally, the roots of an ancient olive tree, known as al-Badawi. Thought to have stood for up to 5,000 years, the tree's knotted trunks and branches would serve well as an emblem of the incipient state of Palestine, whose demand for recognition at the United Nations next week is causing seismic waves in diplomatic and political circles.

But for Walaja's 2,300-strong population, the perspective is different. Deeply disillusioned after 20 years of negotiations that have failed to produce independence, and through which Israel has relentlessly built and expanded settlements in the West Bank and East Jerusalem, many Palestinians have little faith in their political leaders to effect meaningful change.

"We are suffering from a leadership crisis," says Ahmad Barghouth, 64, a neighbour of Atrash in Walaja. "Our leaders are either fools or traitors. Throughout history I don't think independence has been granted to a state with no land."

Barghouth, whose terraces of fig, plum, walnut and olive trees are also being churned up to make way for the barrier a few metres from his house, is scathing about the suggestion that a positive UN vote may open up recourse for the Palestinians to international legal bodies.

The international court of justice ruled in 2004 that the construction of the West Bank barrier was illegal and should be halted. "Did anyone implement it? You see the wall before your eyes," says Barghouth. The UN passed resolutions calling on Israel to end its occupation. "Have these been implemented?" asks Barghouth. "We want action on the ground, not votes at the UN. We want an end to it."

Despite such scepticism, and fears that the move towards a Palestinian state could effectively relinquish the right of refugees to return to their original homes, Palestinian leaders insist their strategy is correct in the context of two decades of failed negotiations.

They say a positive vote on the issue of statehood will strengthen the Palestinians' hand in negotiations. Such an act of political symbolism, while not immediately altering conditions on the ground, could change the paradigm of relations between Israel and Palestine, they argue.

According to the national campaign, Palestine: State 194, the bid for membership of the UN is a step towards freedom and ending the occupation. "For almost seven decades now, the Palestinian people have been denied their natural and historical right to establish an independent state. The establishment of a sovereign and viable [state] is a debt owed by the international community to the Palestinian people that is long overdue," it says. "Now it is Palestine's time."

Veteran Palestinian politician Hanan Ashwari told western diplomats this week: "September is a historic test for the international community. We have reached a turning point, both in terms of possibilities for peace on the ground and in the light of democratic changes transforming the region as a whole."

Sheerin al-Araj, a member of Walaja's village council, concedes that the approach to the UN may be a useful tool to bring pressure to bear on Israel. "But it's not the end of the road," she says. "It has to serve a bigger goal … I don't trust [the Palestinian leadership] to have a back-up plan."

One option she favours would be for the Palestinian Authority, created under the 1993 Oslo accords, to "hand back the keys". She says: "We should say to them if you don't want us to have a state, take responsibility for your occupation."

Negotiations, she says, are pointless. "You can't negotiate with someone who's holding you by the throat."

Barghouth is also mistrustful of a leadership which, he says, is doing Israel's dirty work. "The Palestinian security forces prevent any resistance while the settlers are carrying out atrocities against us, taking our trees, burning our mosques, humiliating our people. If we defend ourselves, Abu Mazen [Palestinian president Mahmoud Abbas] condemns us to the Israelis."

More than 50 of Atrash's olive trees and all of his 18 almond trees have been torn from the ground to make way for the barrier. Soon he will be left with two olive trees, with another 100 beyond reach on the other side. "My trees are like my children," he says. "They are ripping my heart out when they uproot them."

He shakes his head at the thought of world leaders gathering in New York next week to discuss the fate of his land. "Doesn't the UN know the Israelis are building settlements on someone else's land? That they're building a wall inside the West Bank?"

What will happen in the coming months? "Only God knows," he says. "We hope the future is good for the Palestinian cause. But if there's unrest, the whole world will suffer."

Violence borne from a combustible mix of frustration and settler provocation is predicted by many, on both sides of the conflict. "The Israelis are closing off other options," says Araj. "Violence is the last thing I want, but it's coming."