Both sides have very strong religious historical claims to the land of Palestine.
The Jews were the first to settle in Palestine in 1200 BC. 1000 years later the Jews were driven out of Palestine by the Romans. 500 years later the Arabs conquer Palestine. Both Nations have lived in Palestine for at least 1000 years, giving them both historical claims to Palestine.
Jerusalem is where the Wailing Wall is situated. It is also the home of the Dome Of The Rock, site of Abraham's sacrifice of Isaac. For these reasons Jerusalem is the Jews" most Holy city.
The Dome Of The Rock also has significance for the Arabs; it is the site of Mohammed's Night Journey. Palestine is also the site of El Aqsa, the final judgement will take place. But for the Arabs, Jerusalem is only their third most holy city.
Because of these claims, both sides can call Palestine their homeland, both historically and religiously. This means that by favouring the claims of one side, the other side will be offended.
Events since 1948.
Since 1948, the state of Israel has been involved in many wars. There have been five wars in the last 50 years. In each case, the Israelis have won the war, and with few exceptions the Arabs have been embarrassed. In the 1920s the Jewish immigration encouraged large numbers of highly skilled intelligent and wealth Jews to Palestine. They fuelled the already strong sense of nationalism and more and more Jewish people began to believe in the possibility of fulfilling their religious and historical destiny. This caused hatred of the Jews by the Arabs. They began to take back their land forcefully, claiming that it was theirs, even though they had sold it. .
Due to both sides being able to call it their homeland, the UN could not have enforced a law determining which side Palestine belonged, uproar and riots and the inevitable bloodshed would have ensued, which at the time was unacceptable.
In the McMahon letters the Jews had been promised a "National Home for the Jews" in 1915 but in 1939 Britain broke this agreement.