Religious factions inside a nation want to have their own separate homeland. The government refuses, claiming the territory in question, which commands the nation's only source of clean water, is vital to security. Is violence inevitable?

If you are referring to the situation in Palestine/Israel, then the situation is indeed difficult. I think that referring to the Palestinians as a "religious faction" also misses the point somewhat. Until the formation of the "State of Israel" in 1948, this had been an ill-defined homeland for the Palestinian people. Once the State of Israel had come into existence they had no land of their own. When King Hussein of Jordan expelled all the Palestinians from his country, they were left with nothing. Initially the Israelis had hoped that both races would live together in Israel, but it was obvious from quite early that that was never going to happen.

Israel is a surprisingly small country, and yet there are suggestions of further partition to enable the Palestinians to have a state of their own. Such a partition can only ever be done on Israeli terms, and that means that they will always seek to keep the strategically important parts (and that includes the fresh water). You can understand  their paranoia after several wars, and repeated denials of Israel's right to exist