No, I'm sorry. You have it all wrong, as does Sweet, whose answer is clearly biased and antiSemitic.
There was never any country called "Palestine." It was a large area of land which was governed under the British Mandate. This website should help to clarify things. It shows maps of Palestine and gives some basic history.
http://www.masada2000.org/historical.html
Now, this land is the Jewish ancestral homeland, and despite the Diaspora, there has always been a Jewish presence there. It was NOT, and I repeat, NOT an Arab country! Jews ARE the natives. Most of the Arabs there were recent immigrants. The majority of them arrived after WWI. Meanwhile, many Jewish immigrants were arriving as well, and the biggest wave of Jewish immigration began in the 1800s, long before most of the Arabs got there. There were some there, but not many.
This information is comes from an Israeli historian:
"The Arab population of the south (between Jaffa and the Egyptian border) grew by more than 200% between 1917 – 1940s. About 35,000 Arabs from the Haurain, South Syria came looking for work.
"From 1870 to 1948 the Arabic population grew by 270%. Even in Egypt, the Arab country with the highest birth rate, the rate was only 105%, which proves that a significant part of the Arabic population growth came from immigration. By 1921when the British government performed its first census the number of Arabs and Muslims amounted to about 500,000. The 1931 British Census included about 30 different languages spoken by the Muslim population in Palestine. They were illegal immigrant workers from Arabic and Muslim countries. The high rate of children's deaths, law life expectancy and the lack of health services in the country made it impossible to reach 270% as a result of birth rate.
"In Short, from about 250,000 around the end of the 19th century, many of them bedouins, the Arabic population grew to about 1,250,000 in 1948. The Palestinian claim that they are the ancient population of the so called Palestine has no ground."
http://rslissak.com/content/arab-muslim-waves-immigration-palestine-land-israel-drrivka-shpak-lissak
So what happened is that the majority of Palestine, which had been promised to the Jews, was given away to Arabs in the form of Transjordan, which later became Jordan. What was left was a tiny sliver of land. Still, Arabs were offered another state of their own, and they turned it down. They wanted to go to war with the Jews instead. So after the surrounding Arab countries advised the so-called "Palestinians" to leave, they did, and war broke out. (They were not called Palestinians back then, incidentally-- they were Arabs. The people back then known as Palestinians were the Jews.) This was one day after modern Israel was formed by the UN. Yes, it was voted on by the UN, and the world voted, "Yes!" Modern Israel was created legally and legitimately. The Arabs had their chance at yet another state apart from Jordan but turned it down. To their surprise, they lost the war, and Israel gained her independence in 1948 after months of fighting.
Since then the Arabs have whined about losing and have created lie upon lie for propaganda purposes, and all because they hate Jews and don't want to share the Middle East with us. They try to kill as many of us as possible in their acts of terrorism, preach the hatred of both Jews and Christians on their television channels and to their children in schools. It's even in their textbooks.
http://lindasog.com/public/terrorvictims.htm
http://www.palwatch.org/main.aspx?fi=427
Also the USA does not give Israel gazillions of dollars. It's about 3 billion/year, which is really a very small amount of money. It's just that the haters try to make it seem as if it's far more. In fact, Egypt also gets a lot of money. Many Arab countries do. Afghanistan gets the most, way, way more than Israel.
1. The natives are the Jews, not the Arabs. Jews want peace, but Arabs do not. They have said time and time again that they want to push all the Jews into the sea and that they will never negotiate with Jews.
2. It had been described as a barren wasteland except for a few scattered Jewish villages.
3. Gaza has its own government-- Hamas, a terrorist organization, which calls for the killing of Jews. They are Arabs.
http://mideastweb.org/hamas.htm
The West Bank is actually Judea and Samaria, and the Arab government there is the Palestinian Authority.
4. It's very complicated. I've tried to simplify it as much as possible but feel I'm leaving out a lot. It's just hard to inform you of the entire situation in one little answer.
EDIT: "Rabbi" Ehrlichmann is neither a Rabbi nor Jewish. On the contrary, he's a raving antiSemite