The area in question was ruled by the Ottoman Empire for an eternity. The Ottoman Empire sided with the Kaiser in World War I, and was defeated along with him. There was no Palestine, and there never had been. There was also no Israel at the time, although there had been. The area was called Trans Jordan. The British had "stewardship" over the area after World War I. They did call part of the area "Palestine".
The people who occupied that area were from any number of tribes and nations. They were for the most part Arabs of Muslim religious faith.
Even before World War II there were Jews immigrating back to the area and Israel was the territory they went to, which had been a Jewish area for centuries, and was before the British and before the Ottoman Empire.
At the time Israel was formally recognized as a sovereign nation, the Arabs of that region were also to have been given their own state to be recognized as a sovereign nation.
Unfortunately for them, and the rest of the world, the Arab nations immediately set upon Israel with the intent of destroying it and wiping out the Jews once and for all. Even more unfortunate for the Arabs living in the territory, they sided with the Arab nations, and the Arab nations lost.
The territory was controlled by Israel for the most part over the period of the next two decades.
The truth is, however, that those who call themsleves "Palestinians" and are occupying the territory known as "Palestine" are in fact refugees from any number of tribes and nations who had generally been sent to settle the territory by the Arab nations.
When that territory was lost to Israel in the next decades during the wars, those refugees originally stayed in Jordan. Again, an unfortunate situation occured. First, they were forced to live in what amounted to squalor by their Arab brethren in a part of Jordan as second class refugees, and they were not welcomed by ANY Arab nation. Second, those of Arafat's ilk created unrest, and threatened the ruler of Jordan, and Jordan violently expelled these refugees, who then, with no other place to go, returned to the territory known as "Palestine".
It was in fact their Arab brethren, and not Israel, who placed the "Palestinians" in the place and predicament in which they currently suffer.
Commonly ignored by many is the fact that Israel built homes for the refugees, but the Arab brethren of the refugees and those of Arafat's ilk prevented them from occupying the settlements, instead forcing them to live in the squalor of the refugee camps, to better foster hate and unrest, and also sympathy from the rest of the world.
As to the right of Israel to occupy and control the territory, oddly enough, that is actually guaranteed by international law. Because the territory was taken by Israel in a war in which they were attacked and they were acting in defense, they are allowed to hold that territory until such time as a formal peace treaty ends that war. With the possible exception of Egypt, under Sadat (who was assassinated for his efforts) no treaty was ever signed, so legally, the war still continues.
While far from being "lilly white", Israel has made far more efforts and more concessions than any of the Arab nations or the "Palestinians" and their "leaders", who are mostly comprised of the terrorist groups such as the PLA/PLO, Hamas, Hezbollah, and a few others.
