Although a lot of the Zionists wanted the "holy land" out of religious reasons, you just have to concede that was the most uncomplicated choice for a jewish state. Feel free to name me another place where a jewish state could have been created.
There never was a Palestine state anyway, it always was part of other states and at the time of the creation of Israel it was under British control.
Also thousands of jews were already living in that country because they had to escape from Nazi Germany and had to go somewhere. These jews by the way "weren't welcomed very well" by the Palestinians to put it nicely.*
The allowedly harsh reactions of Israel against Palestines always were acts of defense. Without a doubt a lot of these reactions are exaggerative but if Palestines would stop their aggressions today there wouldn't be any more fights and a Palestine state could be created immediately. Sadly they don't stop.
* On a side note did you know of the link between the Nazis and the Mufti of Jerusalem who by the way was a mentor to Arafat? Very good friends as you can see here:
http://jimball.com.au/Features/Mufti-Nazi.jpg
http://www.psywarrior.com/mufti539.jpg