I think it is a Western pathology - since we are brought up to think that "honesty is the best policy" it is beyond our experience to believe that someone is a complete and utter liar. (Although we are also taught to stretch the truth, to color our observations, and to soften facts a bit for various etiquette and cultural reasons, Westerners are averse to real in-your-face lies.)
This blindness to when someone is lying to your face can have very bad consequences. The Western press is obligated to act with suspicion, to check facts, to be cynical, especially when the person who is stating his stories has been shown to be a liar time and time again. For one to act "even-handed" when comparing the statements of known liars and their more-truthful counterparts is dishonest itself.
Let's look at some history of Palestinian Arab lies:
"Since its establishment, the racist Zionist entity has been implementing various forms of terrorism on a daily basis which are a repetition of the Nazi terror There is no difference between Hitler and Ben-Gurion, and if there was a difference at all, it was one of quantity and not one of substance." - from an article in the official PA newspaper "Al-Hayat Al-Jadida", September 3, 1997.
"Israeli practices in many aspects are equal with, if not more brutal than, those practiced by occupying Nazi soldiers dealing with French-Dutch citizens during the Second World War." PA Information Ministry press release, December 10, 1997.
"Abd Al-Fatah Hamid, the Head of the Control and Inspection Department in the PA Ministry of Supplies, said that a committee will work ... against spoiled goods and food supplies, which are one of Israel's means in its war against Palestinian society." from an article in the Palestinian daily, "Al-Ayyam", October 29, 1997.
"They brought Russian Jewish girls with AIDS to spread the disease among Palestinian youth." Abdel-Razek Al-Majida, Commander of the Palestinian General Security Service in Gaza, quoted by the official PA newspaper "Al-Hayat Al-Jadida", May 15, 1997.
"... there is no tangible evidence of any Jewish traces/remains in the old city of Jerusalem and its immediate vicinity. PA Information Ministry, December 10, 1997.
'Jerusalem is not a Jewish city, despite the Biblical myth implanted in some minds ? There is no tangible evidence of Jewish existence from the so-called 'Temple Mount Era' ? The location of the Temple Mount is in question ? it might be in Jericho or somewhere else' (Walid Awad, Director
of Foreign Publications for the PLO's Ministry of Information, interviewed by the IMRA news agency, Dec. 25, 1996).
Attallah Quiba, the Palestinian ambassador in Sri Lanka, believes that Palestinian leader Yasser Arafat was killed by unnamed Israelis using advanced technology, the Island newspaper said. Responding to questions at a media conference in Colombo on Friday, Quiba claimed that two Israelis who met Arafat on the day he was taken sick "used a laser device to attack Arafat."
Palestinian television reported, on the basis of an official announcement by the Palestinian leadership, that a priest named Jacques Amathis had been killed and dozens of monks wounded in an IDF action in Bethlehem. The announcement was published prominently in the Italian and French media and prompted a storm of protest. The following day the 'late" priest was interviewed by the MINSA agency and confirmed that he and the monks in the monastery were safe and well.
Saeb Erekat accused Israel of a "massacre" in Jenin and published the number of 520 deaths (ten times the actual number).
'The Nazis probably killed less than one million Jews and the Zionist movement was a partner in the slaughter' - Mahmoud Abbas in his book.
In April, PA head Mahmoud Abbas claimed in a meeting with Israeli reporters that the PA has collected all the weapons held by 'wanted' Palestinians in Jericho and Tulkarem and that they will all soon be joining the PA security forces. In fact, none had been collected.
"We have started to deal with the culture of violence, we stopped the culture of violence and the Palestinian people have started looking at it as something that should be condemned and it should stop." - Mahmoud Abbas
There is a famous, possibly apocryphal quote from Yassir Arafat: ""I am ready to kill for the sake of my cause; wouldn't I lie for it?" Although I cannot find a source to it, it brings up a fundamental truth - why does the Western press trust murderers and proven liars? Why do they give the same weight to statements by Palestinian sources who are known to have lied to the press in the recent past? Why are Palestinian newspapers quoted as authoritative sources?
But there is a far more fundamental question that is much more important than the fact that Palestinians habitually lie to the world: How can anyone expect Israel to make agreements with liars? Time after time, the Palestinian "negotiating" stance has offered nothing of substance, nothing but words - and their words are worth far less than the words of honest people. Yet the world expects Israel to give real concessions in exchange for only words - the words of proven liars.
This is Israel's "peace partner." No one in their right mind would buy a car from someone who acts like this; but Israel is expected to spend much more on the empty promises of terrorist-supporting liars.
The world press gives the Palestinian position legitimacy by its refusal to do basic fact-checking or context when Palestinian officials speak. This is fundamentally immoral and dishonest itself, and it results in more lies and more deaths. To treat Palestinian lies with deference that would not be given to the leaders of any Western nation is not journalism - it is a political agenda that has no place in newsrooms.
(Sources for some quotes: here, here and here. If any of them can be shown to be in error, please let me know.)
UPDATE: See also this article from 2003.