|Population in Thousands:||233.2||336.1||341.6||382.1|
While many claim "natural increase" to explain the Arab population growth, I have yet to see anyone explain why such natural growth should have only started in that time period. A regression analysis of the numbers above would indicate an absurdly tiny population in Palestine in the 18th century but by all indications it remained fairly steady at least since Christian pilgrims started writing about their travels there.
The most obvious explanation for the increase in Palestine's population is that many Arabs moved there. Jewish immigration brought in new capital, Jewish effort increased the amount of agriculture and industry, and Arabs naturally migrated to where they could honorably take care of their families. The entire Middle East was under the administration of the Ottoman Empire and there were no borders to stop Arab migration.
Arabs have, to this day, been naturally itinerant. Recent studies show that 70% of the residents of Qatar and the United Arab Emirates are immigrants and that "the world’s highest share of migrant population is to be found in the Middle East." The incomplete data we have coupled with the Arab history of migration and the Arab male's desire to support his family, together with the undeniable increase in the standard of living as the economy improved, all indicate a concurrent explosion of two immigrant populations in Palestine, Jews and Arabs, under the late days of the Ottoman Empire.
Interactions between the two groups seem to have been cordial although not as direct as one might think. Jews tended to employ Jews in the early decades of the Zionist movement and the Arab economic boom seems to have been more indirect from the infusion of new capital in the area rather than from direct employment.
It would be a mistake to confuse cordiality with respect, though - both the Arabs that moved to the area and the native Palestinian Arabs had a visceral hate for Jews as a people. A Christian travelogue published in 1874 noted the "Men in Palestine call their fellows 'Jew,' as the very lowest of all possible words of abuse." when explaining an insult of "Dogs, brutes, pigs, Jews!" So while practicalities and honor allowed Arabs to move to the area, and the Arab hospitality allowed them to interact relatively pleasantly, their innate hatred of Jews as a people far precedes Zionism.
(Part 1 here. It is going more slowly than I would like but these things take time....)