Learning real (not just antisemitic/leftist) history of Palestine/Land of Israel, we come to the conclusion, that both Palestinians and Jews include indigenous and alien populations. Sharp decrease of Palestine medieval population was a result of numerous armed invasions and mutual persecutions (for example, of Crusaders and Muslims). Almost all invaders slaughtered or expelled the Jews. Famine, plague and robbers contributed sharp demographic decrease.
In the course of longtime Ottoman rule, Jews were intimidated, murdered and imprisoned with the purpose to extract money. Including the «Khaluka» money, sent by Diaspora Jews with the purpose to rescue Palestine Jews from hunger.
Anyway, after decrease, there was restoration, due to natural growth and immigration of both Muslims and the Jews. Local «Mustaarab» (Arabized) Jews permanently sat in Galilee, until they were forced to give up their land to Muslim neighbors. The last «Mustaarab» Jews fled their Pekiin village just in 1936, fearing murder at the hands of Amin al Husseini’s gangsters.
Both Muslim and Jewish populations of Jerusalem were slaughtered or expelled by Crusaders. Jerusalem Jewish communities were slaughtered at the hands of various conquerors, then restored several times. However, there was one exclusion: Salah ad Din allowed restoration of Jerusalem Jews due to personal request of his physician Maimonides.
Under Turkish rule, there was big influx of Muslim and Christian populations, while Jewish immigration was only temporarily allowed in by Suleiman the Magnificent (these were rich refugees from Spain and Portugal). But in the course of most of Turkish rule Jewish immigration was restricted or forbidden.
Despite of restrictions, Jews infiltrated into Palestine in the course of many centuries. Before modern Zionism started, Jerusalem Jewish community included Jews of Sephardi, Ashkenazi, Yemenite, Bukhari and Mughrabi origin. Muslim population of Palestine was composed of (Hejaz) Arabs, Bedouin, local Arabs, Egyptian, Sudanese, Syria and Lebanon Arabs, Iraqi Arabs, Kurds, Circassians, people of Bushnak (Bosnian), Maghreb, Yemenite, Turkoman origin etc.
The partition of Palestine has deep historic and demographic roots.
The «Peace in exchange for territories» experiment was already performed. After complete, one-sided Israel’s withdrawal from Gaza, including destruction of Jewish villages and expelling of the Jews, HAMAS won the elections and consumed popular mandate in Gaza. Simply, the Palestinians voted for annihilation of Israel, which promised (and continues to promise) HAMAS.
History of Jewish-Palestinian conflict is much longer, than you imagine. In the course of 1000 years the Jews were doomed to be victims of Palestinians, and the Palestinians got used to such relations, they cannot accept the change. Especially when antisemitic World and Islam encourage their most extremist aspirations.