History is written by the victors, and the way you’re telling it makes it sound like Israel’s never done anything wrong.
They did make a big mistake in 1948 and that led ultimately to this displacement of the Palestinians but they are less to blame than the UN and the rest of the world.
Lots of the problems of the Middle East originate from the Treaty of Versailles at the end of WWI where some idiot drew random lines and made new countries that collected people who would never coexist peacefully. One of those random lines created the Palestinian Mandate out of what was once a province in the Ottoman Empire called "Palestine" and that is the origin of the label "Palestine" to the area. It goes back a few hundred years at best, not THOUSANDS the way the Jewish history from the bible (as history) does. Over the years parts of the territory were sectioned off into trans Jordan, Syria, etc. and then we get to the final division in 1948.
During WWII, the High Mufti of Jerusalem was good buddies with Hitler. They were colluding on how to implement the final solution in the Middle East after Germany won the war. Then in 1948 when it became clear that the Britts were going to ignore the Arab demands and not turn the whole territory over to the Arabs, the Mufti started riling up the Muslim residents and convinced them that if they stayed, the Jews would persecute them. So the diaspora started. The Arabs WILLINGLY abandoned their homes and businesses and fled to the surrounding Arab countries. Then the war of independence ended, it was short but Gaza now belonged to Egypt instead of the Palestinians and Samaria and Judea now belonged to Jordan. These two provinces became known as the West Bank (of the Jordan River). The Jews didn't protect the Arab lands but I think it did take back part of Jerusalem (not clear if it was then or later).
The Arabs lobbied the world about their victimhood and how they were all refugees and it was Israel's fault. Israel did expel a small number of Arabs at this time because they were actively fighting Israel. So now we have dozens of refugee camps in all the surrounding countries holding hundreds of thousands (now millions) of people. MANY OF WHICH STILL EXIST TO THIS DAY!!! I think the remaining number is 89. Due to the way the Arabs viewed citizenship, these displaced persons could NEVER become citizens. So, unlike other wars which settled nationality when the fighting stopped by which side of the line you ended up on, all the people who ended up in Egypt, Jordan, Syria, Lebanon, etc. were now people without a country and that is how this whole mess started. I believe that at some point the UN got involved and since Israel was hated even then, made a special refugee category so that the Palestinians could NEVER be absorbed. So today we have two refugee organizations administered by the UN. One is specially for "Palestinians". The UN wanted the world to pressure Israel to take all the dp's back and they felt that they could keep the pressure on Israel until they caved. How wrong they were.
When the dust cleared after the war, many of the Arabs who left voluntarily wanted to return and Israel said no. I understand their point. Their country was extremely fragile and they really didn't need enemies within. So, I think this was their biggest mistake. If they had allowed at least some of the people to come back, they might have integrated as the ones who didn't abandon their homes did. But, again, Israel may have been right to not let them return. It was certainly the UN who perpetuated the countrylessness of the Palestinians. They have gone generations without a country and their children are also countryless. If the UN had said - where you are is your nationality which is the way wars always used to work, this debacle would have settled down decades ago because the Palestinians would have integrated into their new country and the wounds would have healed. Keeping them countryless kept an oozing sore that still hasn't healed and that is by design.
The Palestinians are blaming the wrong people. They should be blaming Egypt and Jordan for taking "Palestine" away from them in 1948. The Jews didn't do this to them. Their own people did this to them out of group hatred of the Jews.
PS, the bible was written thousands of years before Mohammad came out of the desert and started spouting the word of God and created Islam. A more logical reason for the Muslim hatred of the Jews (the hatred goes one way) is the Jew's (and Christian's) rejection of Mohammad as a prophet from God. The Qur'an was originally written in chronological order instead of today's version which is organized by the length of each Surah with the shortest ones being first. If you read it in chronological order, you get to see Mohamad's feelings toward Jews and Christians sour over the years until he goes from peace and love and we're all people of the Book and ends up wanting to kill all non-believers.