At the end of the First World War, Britain had defeated the Ottoman empire and gained control of most of the Near East (Palestine/Israel, Transjordan, and Iraq), with France gaining modern day Syria and Lebanon. This was a legitimate territorial acquisition as decided in 1923 by the Treaty of Lausanne. Prior to this time the area of greater Syria (the area in question) was ruled by the Ottoman empire for five hundred years. The British region of greater Syria was divided in two, with roughly one fourth being given to Jews (Palestine/Israel) and the other three fourths given to the Arabs (Transjordan). This was how the legitimate rulers of the land decided to legitimately divide the land. The fictional "Palestinian" people (who were really southern Syrians) were ALL supposed to go into Transjordan, but because they hate Jews they want to take Israel/Palestine too and they are doing so by creating a fictional national identity and crying foul to the international community.
In the following video, Israel's Deputy Minister of Foreign Affairs Danny Ayalon explains the historical facts relating to the Israeli Palestinain conflict. Runs 6:17.