A little history first. The Jew were a powerful people in Israel about 3,200 years ago. The Jewish state lasted through the Assyrian, Babylonian, Persian, Greek, and Roman conquests. After 70 AD, the landscape began to change as more conquests dominated the area and, eventually (7th century), the Arab Muslims took control and the Jews became a barely tolerated minority. During the Arab rule, the land known as Israel became stagnant. Surrounding Arab countries rounded up populations that would relocate to Israel (a large majority being fellahin, or Arab laborers. Under the Ottoman Empire, these Arabs, or early Palestinians, were bought out by their own Arab people. Land reform laws, enacted by the Ottoman Empire, reduced the Arab laborers (who had owned the land for decades) to nothing more than Arab serfs.
As Zionists slowly made their way back into the land of Israel, they bought up unworked land and privately owned land; which had a positive effect overall on both cultures. The Zionist endeavor reversed the harsh land laws, helped cultivate the land, and allowed many Arab serfs to become land owners once again.
In the early 19th century, the British became interested in Israel. England's turmoil with the French caused the British to send political and cultural representatives to the region in order to limit French influence. After World War I, the British and the French carved up the region and created puppet states; the land of Israel being part of that region. During the war, the British had promised both the Arabs and the Jews land for the creation of a state. Arab riots in 1919, 1921, 1922, and 1929 killed hundreds of Jews and British military leaders teamed up with Palestinian leaders to show how unpopular the UK's pro-Zionist policy was. Britain would eventually require Jews to relocate, dismantle settlements, and limit Jewish immigration to Palestine. As Hitler came to power, thousands of Jews fled to Palestine, which enraged the Arabs and eventually led to the Great Arab Revolt in 1936. To fix the situation, Lord Peel's partition plan was presented to the two sides: the Palestinians would get 85% of the land and the Jews would get 15%. The Jews accepted. The Palestinians did not. In their views, the Jews deserved no sovereignty in Arab lands. In 1937, the Arabs could have had 85% of Israel.
The Holocaust caused even more ripples in the region. Because of the British limit of Jews allowed to immigrate to Palestine, thousands of Jews were trapped in Europe. The British gave up and handed the land over to the United Nations. After a fact-finding mission, the UN decided that Israel needed its own state. The Arabs did not meet with the UN teams and claimed that it would not support any land, even though land was already legally owned by the Jews, "given" to the Jews. Eventually, the UN made two states. The Jews rejoiced. The Arabs prepared for war.
The War of 1948 was a defensive war for Israel. Leading up to the war, Arab paramilitary forces carried out deadly attacks on Israel settlements. The British mandate expired on May 14, 1948 and seven Arab armies invaded at once. During a brief ceasefire, Israel planned its next moves while the Arab armies couldn't trust each other enough to leave their own borders. Israel never stole any land. It simply took back land that had been compromised by the Arabs during the aggression. It did not break any international laws or norms. Upon Israel's victory, 725,000 Arabs fled for their own reasons. On the other hand, almost 1 million Jews were expelled from surrounding Arab countries. They left behind an estimated $2,500,000,000 worth of estates. 80% of these expelled Jews were absorbed by Israel.
Arabs refer to this Israeli victory as al-Nakba, or "The Catastrophe." How was this a disaster? The Jews simply defended land assigned to them by the United Nations. Had there been no war, there would have been no refugees. The Arabs, if willing to negotiate, could have had there land back. Instead, Jordan and Egypt illegally declared sovereignty over Gaza and the West Bank defying Resolutions 181 and 194. Even worse, the Arab states kept the refugees in concentration camps that could be used as leverage against Israel and the West. The Arabs who stayed in Israel (170,000...1,400,000 today) have prospered and enjoy opportunities unlike any in the Arab world.
~reference David Meir-Levi, History Upside Down (pgs.53-65)