If you were to look at the issue with the view of the western world, specifically that whoever conquers a land gets it, the Jews would deserve it.

Britain conquered the Ottomans in that region earlier this century, and they made an initiative to create a Jewish homeland. After the British Mandate ended, the UN needed to decide to do with it. They wanted to create a Palestinian homeland as well, but the Arabs declined, so they created a Jewish state, smaller than the one that exists today.

At the formation of this state, and during the decades that followed, there were many wars fought against Israel by other countries in the region. Israel won every single conflict and gained land. The other countries by the western world's rules would have no reason to complain, because the Arab countries attacked first and Israel just won land while defending itself.

It is important to note that Islam has a much larger military tradition than Judaism. Judaism actually forbids unnecessary and gluttonous conquest, whereas Muhammed and the generations of Muslims that followed had a large empire.

If you were to look at the issue from the perspective of religious importance and history, it would belong to the Jews as well.

Jerusalem is the holiest city in Judaism. It is the only city mentioned by name in Jewish prayers, and it has profound significance religiously. It is the site of the Beit Mikdash, or the Temple, which is the most sacred land in the world to Jews. The most particularly sacred piece of land is the Holy of Holies, the location of which has not been absolutely determined, due to Palestinian restrictions on archaeology. There are many Midrashim and whatnot I could quote to show the Jewish significance of Jerusalem, but I'm sure you are well aware of that.

Where does Jerusalem stand in Islam? It is the 3rd Holiest city, after Mecca and Medina

Muslims claiming Jerusalem is analogous to Arab Christians claiming Mecca because there was an ancient Christian Church there (I'm not sure if there is, there might be).

As I mentioned above, all censuses taken after 1840 of Jerusalem show that the majority of the population was Jewish, and that majority generally increased as time progressed. There were not many people living in Israel, because the land was so terribly kept. After the arrival of Zionists who bought the land from its owners at high prices and turned it into usable farmland and the like Arabs could migrate back to Israel because it was possible to live there again.