In 1948, the United Nations drafted and ratified Resolution 194 which called for the Arab state and Israel to resolve the refugee/resettlement issues but the condition was that all returning citizens would agree to live in peace. Receiving no such guarentee from the Arabs, Israel decided to postpone repatriation until her neighbours would recognize her right to exist.
In 1967, nine different nations (Egypt, Jordan, Syria, Lebanon, Algeria, Kuwait, Sudan Saudim Arabia and Iraq) declared war on Israel and promised to exterminate every Jew.
Israel defeated the Arabs in just six days and the territory was expanded to the West Bank, Golan Heights, the Gaza Strip, the Sinai and the remainder of Jerusalem, (half of which was taken over by Jordan after the the 1947 war) This territory is referred to as part of Israel's 'illegal occupation.' Most of this land had been offered legally to Israel in the Balfour Declaration anyway, before Gt. Britian sold it behind Israel's back.
Historically, the land had been the home of Jews for literally thousands of years.
I can't cover the whole history here but land has been returned such as Sinai but a treaty cannot be reached. Israel's deal (brokered by the U.S.) always goes like this. 'You give Palestinians back some land and here is what they will do: They'll promise to stop killing you'. That's the deal.
Then after the deal, the promise is broken and missiles are fired into Israel from Gaza. It doesn't matter what Hezbolah want Israel dead, Hamas the same, Al-Qaeda the same, Muslim Brotherhood the same
Jews lived in the land since the time of Moses and there never was a country called Palestine. This was a nickname for the Holy Land under the Romans.