That part of the world has never been part of a modern state. Jordan doesn't want it. The Ottoman Empire doesn't exist. There is and has never been a state of Palestine. Abu Mazen turned down an from Olmert to make it into a Palestinian state. Arafat turned down an offer from Barak.
When Jordan took control of that that territory, including East Jerusalem, the Temple Mount and the Western Wall, they expelled or murdered all Jewish citizens living there. After the second world war ethnic Germans were expelled from Czechoslovakia and Poland. Israel _didn't_ expel residents of the West Bank, after capturing it in a defensive war, and somehow that makes Israel not a democracy?