It was practically inevitable that a movie like this, with it's more than obvious message of small people that manages to resist the repression of a bigger and more powerful people, will raise reactions all over the world with all people that feel repressed and that fight with powerful enemies (America).
Palestinians feel that the story of Avatar precisely depicts their problem with Israelis and United States through history.
In the movie some powerful corporation is mining a valuable mineral called unobtanium, while in the real life America and West are mining a valuable mineral in the whole Middle East called oil or "black gold".
The people of Na'vi is peaceful and they live in harmony with nature and worship a mother goddess. It is obvious how the people of Palestine identified themselves with these tribe people.
Also, the movie has a happy end, because the remaining corporate personnel (the bad guys) are expelled from Pandora, while the good guys are allowed to stay. That is also the ending that Palestinians are hoping for.
On these images you can see the villagers of Bil'in Palestine demonstrating against the Israeli border.
Israel argues that the border is necessary for security, but the inhabitants of Palestine consider this encroachment on their land.