There are some misconceptions about Israel. First off Jews have been living in that region for thousands of years. Several were dispersed to Europe, North Africa and elsewhere over the years but they always maintained a small presence in their homeland and lived side-by-side with Christian and Muslim communities.
European Jews started dreaming about Zionism in the late 1800's and a return to their homeland free from persecution. They started returning to the region in large numbers as early as 1881 in what is referred to as the "First Aliyah". Subsequent Aliyahs took place before and after Israel's founding which improved the region's Jewish population.
Contrary to myths the Jews didn't simply arrive all at once in 1948 and kick the Palestinians out. There was already a large population of Jews before that. Most "Palestinians" are nothing more than Arabs who started migrating AFTER the Jews came in and started developing Jerusalem and the region.
The region was part of the British Mandate of Palestine from 1920 when it was assigned to them by the League of Nations to 1948 when the State of Israel was founded. The objective of the Mandate system was to administer parts of the recently defeated and defunct Ottoman Empire which had been in control of the Middle East since the 16th century, "until such time as they are able to stand alone."