By Alastair Macdonald RAANANA, Israel/QALANDIYA, West Bank, June 3 (Reuters) - Esti and Hanan both turn 40 this week. It's a milestone for anyone, but for these two women, one Israeli, the other Palestinian, it's a moment to reflect on the war into which they were born and which has shaped their lives. Esti Ilan remembers her mother telling of how, on June 5, 1967, she was treated "like royalty" when she arrived to give birth at a Tel Aviv hospital packed with doctors ready for casualties from the front as Arab and Israeli armies clashed. Hanan Abu Lateef says she spent the first few days of her life sheltering in an olive grove outside Jerusalem as battle raged close to the Palestinian refugee camp where she was born. It became widely known as the Six Day War. It ended with stunning reverses for the Arab allies and Israel seizing the West Bank and East Jerusalem from Jordan, the Golan Heights from Syria and the Gaza Strip and Sinai peninsula from Egypt. Forty years on, however, conflict is far from over and both women, share a gloomy outlook on prospects for peace for their children, despite their own willingness to come to terms with neighbours they have scarcely known, save as faceless enemies. For Hanan, sitting in the sparsely furnished house where she was born five days before the war, each birthday is overshadowed by mourning the "naksa", or setback, of 1967, which followed the "nakba", disaster, of 1948 when her family fled its farm in what is now Israel as the Jewish state fought its way into being. "I've never taken any pleasure in my birthday," she says, clad in black, as she tends to her invalid mother and seven children in the Qalandiya refugee camp outside Ramallah. Making the point, she displays her identity card showing her "official birthday" as June 5, 1967 -- the day of the naksa, a day that ever since, she says, has been marked far more by protest and demonstrations than by any personal celebration. For Esti, the emotions have been less constant. The fears of her parents, survivors of the Holocaust, that the Jews' safe haven was under threat, turned to euphoria. But years of further violence have soured that for many Israelis. "I remember the first 10 or 15 years, it was just a nice date and a nice gimmick being born on the first day of the war," the schoolteacher says at the apartment she shares with her husband and two children in the suburban community of Raanana, just north of Tel Aviv on Israel's bustling coastal plain. "But then, I think when I was about 18 or 19, it started being controversial ... Some people feel it was a very positive moment and others feel it was the ruin of the country. "It's not as clear as it was that it was a good war," she says, noting the suicide bombings, kidnaps and rocket attacks that have continued to threaten Israeli life to this day. "Some people celebrated the years of liberation and others (remembered) years of conquest and ruling another people." "ANOTHER PEOPLE" That other people Esti has encountered principally during her years of compulsory military service in the West Bank -- just as Hanan has met Israelis only as soldiers and, as a 16-year-old, when they put her in a jail near Tel Aviv for four months after accusing her of throwing stones at troops. "I remember feeling that as a soldier I had to be there," Esti says. "I remember that they were nice people but I always found myself asking myself should I really be there. "I remember ... seeing the soldiers and the way they treated the local population and I wasn't always happy with that." Just 50 km (30 miles) away from leafy Raanana, in the crowded camp where she complains her children have no space to play, Hanan recalls her meetings with Israelis with bitterness: "I only see Israelis when they come to arrest someone or at checkpoints," she says, with a smile of resignation. "They think that by arresting us they can ... intimidate us but our patriotism only increases and my hatred for them increases." Moves toward peace in the 1990s, when Palestinian leaders accepted Israel's existence in return for promises of a state, but both women say hopes raised then have been dashed. "It seems as if it's never-ending," Esti says, talking of a loss of confidence among Israelis after last year's month-long, inconclusive war with Hezbollah guerrillas in Lebanon. Hanan is also uncertain: "I hope my children live a better life but what's happening now suggests they won't." For Esti, it is people that must make peace and she laments the decline of even limited contacts among Palestinians and Israelis: "It has to be peace among people not a paper peace and that means that people should meet the other side and get to know them ... I'm talking about getting to know Palestinians, getting to know the enemy in a way, which makes them people." Hanan is sceptical of Israelis' intentions: "They don't want peace," she fears. But she personally is willing to talk: "Why would I not meet them if that could do some good for my country? "I hope we can all live in freedom and peace ... Nothing is better than living in your own country on your own land." Like other emotions shared across the frontline, it is a sentiment Esti shares: "This is ... the only country we have. "We should try to resolve these problems that have, unfortunately, most of them started when I was born." (Additional reporting by Ali Sawafta in Qalandiya)