Actually, you're right about this. In my irritation with your "arguments" I slipped into some uncharacteristic hyperbole. Obviously there's much more to the story of Israel's founding than this. I regret framing it in such simplistic terms.
Although I will say, from the perspective of Arabs, this is effectively what happened. As David Ben-Gurion put it:
"Why should the Arabs make peace? If I was an Arab leader, I would never make terms with Israel. That is natural: we have taken their country. Sure, God promised it to us, but what does that matter to them? Our God is not theirs. We come from Israel, it's true, but two thousand years ago, and what is that to them? There has been antisemitism, the Nazis, Hitler, Auschwitz, but was that their fault? They see one thing: we have come here and stolen their country. Why should they accept that?"
Arabs are not treated as full citizens in Israel. You can get an armchair perspective on this with five inutes of Googling, the legal disparities are well laid out. Or you can get a practical perspective by actually watching some interviews or speaking to some people. Do you actually know anybody in Israel? Speak to them. Ask them to tell you, honestly, if Arabs are treated as equal citizens there.
Both sides want peace. The problem is, the Israel government wants a peace that involves keeping all of the land they've stolen (and continue to steal) and maintaining their control over the Palestinians. They want a peace that eventually has them controlling all of the land, even Jordan, as demonstrated by Netanyahu at the UN.
And after decades of that control, some Palestinians want a peace that involves the destruction of Israel.
Anyway, I'm really done now. Just didn't want to ignore the fact that I'd been unfair. In fact, I'll delete that bit from my comment. The rest stands.