Books on the history of the Arab-Israeli conflict tend to reflect the prejudices of the author more than they show what actually occured. However this book, although not perfect, is the closest thing I have read to a balanced account of the conflict.
This book is a fairly comprehensive diplomatic summary of the conflict that covers the period before the foundation of the state of Israel through to the election of Ehud Barak as Isarel's prime minister. Shlaim is an Israeli-Jew who believes in a two state solution to the conflict, and this comes across in his writing. He criticises both Israel and the Arab states when they squandered opportunities to achieve the solution Shlaim would prefer to see.
There are books which focus on specific aspects of the conflict which are perhaps more useful to understanding the conflict than this, but this is probably the best account currently available which covers the all the Arab-Israeli wars. However while you should definitely read this book, there are a few things which you should be aware of.
This book is primarily a diplomatic history of Israel. This means it goes into great detail on Israel's foreign policy. This means that it can sometimes get bogged down in the details of negotiations. It also means that it focuses more on pre-war and post-war diplomacy more than on the actual wars themselves.
The books main flaw however is that it views the conflict largely based on Israel's viewpoint. Shlaim is sometimes supportive of Israel, and often critical, but his focus is generally Israel. Since this is a diplomatic history, and the Palestinians are without a state, they recieve little attention.
Due, perhaps, to his personal views on the best outcome of the conflict, Shlaim is not as critical as he should be of the Oslo process. He ends the book hopeful about the "peace process" and Barak, though subsequent events have showed this optimism to be misplaced.
However despite these complaints, this book is a must read. No one book is enough to understand the conflict, but this one is as good a starting point as you are likely to find.