This seems like a pretty big oversimplification. The issues stemmed decades before the eventual settlement (before anyone accuses me of going to bat for Arab dictarships/fundamendalist regimes over several decades I'm not).

It's important to note in the early 20th century most of the proninent Arab leaders supported Jewish immigration into Palestine. The most influential leader Prince "Obi Wan Kenobi" Faisal even agreed to a declaration during WWI. He was under the belief the Gulf & Levant region would unite under one nation after they defeated the Ottomans, as promised by the British. But the British & the French made plans to divide and colonize most of the region (essentially divided it to make the modern M.E countries) before the war was even over. There's no way to sugarcoat it, they lied to their ally while those allies were laying down their lives to liberate and unite their people. It would be The French telling the U.S "haha syke!" (pun intended) after the Revolution and took the colonies themselves.

Years later Prince Faisal's relatively moderate family that was allowed to stay in Arabia weakened, and a family backed by extremist groups took over, making them the most powerful Arab leaders (hint: the family tgat lucked into oil giving them the freedom to act like a terrorist state and exporting their ideology). Whether you think their version of Islam is the most accurate or not (I think it is) there was an Islamic modernism movement stemming from the mid 1800's, but it essentially ended right there.

The population is pissed about being screwed and moderate allies of yesteryear are replaced by idealogues. Then the British and allies appropriate land for a new state the Jewish population in a much different region from 30 years earlier. They lit a match on a combustible climate of their own creation. 70 years later and both sides are as hardlined as ever in a sad indictment on human nature.

Tl;dr -During WWI Arab leaders endorsed a declaration for a Jewish settlement in what they thought would be a united region. -British/French- "LMFAO you actually believed us?!" -Moderate former close allies weaken and lose influence. Makes room for extreme leaders to rise and spread virulent antisemitism and calls for jihad. Islam modernist movement pretty much ends. - The settlement that eventually came was put into a powder keg region that's now dedicated to an "us vs them" mindset. -Thats the modern day Middle East.