Palestine and the Levant were not sparsely inhabited. It may not have been like London or Manhattan, but people had been living there for thousands of years.
And not all the families were compensated. The Haganah waged a campaign of intimidation and ethnic cleansing in villages that had strategic military value. And now decades later, no compensation is offered to those families.
Yes, thousands of years, with almost no population growth. Interestingly, when Israel got involved, hundreds of thousands of Arabs moved in and started calling themselves "Palestinians".
But to be honest, it parallels the American native story quite a bit, except they were not really compensated since, like those peopling that part of the Ottoman empire, they lived in "tents". A hundred years ago this would have been easy. One country finally attacks the other, wins, and to the victor goes the spoils of war. In fact, this was attempted by the local Arabs in the 1948-49 war but they lost. And the lost at a time when that form of acquiring real estate was finally, in the history of man, going out of favor.
Think of it as a thousands of years game of musical chairs. The music stopped in WWII and, generally speaking, it never started again. Now you have to be really powerful to push someone off their chair. Sure, the Muslims
tried to push the Jews off the chair many times, but they always failed. And this last time they brought a knife, So Israel brought a gun. I'm no prophet, but I've read enough about the middle east to know this will not end well for the Muslims there. It may or may not end well for Israel either, but that remains to be seen. I'm hoping they finally civilize the area once and for all. The growing civil war in Iran may help.
