Pakistan and India were also founded along religious lines,
And didn't that work out well.
I don't get why they don't just make one state for both peoples so they can live side by side in peace.
Israel is a state of and for the Jews. If it simply offered full citizenship to all the people in the areas it occupies, it would cease to be a Jewish state, which would be problematic. But nor can it stay within it's legitimate borders (the Green line). The water aquifers it relies on are in Palestine. Also, Israel proper is overcrowded. How is your country going to be an international home for the Jews if houses cost triple and there's no running water? Since the occupation costs so little (just a few dozen lives a year- no big deal), why not just invade your neighbour?
The reason the war continues is that there is no way for the Palestinians to force the Israelis to the negotiating table. They have nothing to give up and no stick with which to beat them and no friends to threaten them. So the Israelis won't negotiate. They'll just endure a couple of hundred casualties, parade around all morally superior, and gradually ethnically cleanse the West Bank. Easy!
Maybe even Hamas (doubt it though).
Hamas has signed the Arab Peace Initiative, as has every nation in the region other than Israel and the US. Israel refuses even to negotiate without crushing preconditions (like the total disbanding of the Palestinian army).
The whole point of Israel is pessimistic and bullshit. Zionist theory goes that all goyim hate Jews- Churchill hated them just as much as Hitler. Unless Jews fled Berlin, New York, Sydney ect, the holocaust would happen again and this time the evil non-Jews would finish them off for good. So Israel could be the 'safe place' for Jews*. How pessimistic is that? I feel that has actually been disproven- clearly modern Germany, America ect is a safe place for Jews to live. If this whole 'Israel' thing doesn't work out, they can go live there, no big deal. Not the same story for the locals, of course.
It's also bullshit. Germans and Poles and Russians and Iraqis and Moroccans have no claim to territory in Palestine- none. It shouldn't be a matter of compromise: the specific Jews who alleged they had religious claim to the land were wrong. Only a few dozen Jews had any legitimate land claims. Nevertheless, German land claims to Middle Eastern territory has been given HIGHER respect than Middle Eastern claims. It is literally the case that the UN allowed Germans to turn up at Palestinian people's homes, evict them, make them homeless and then establish a state based on their 'right' to rule the land. And then refused- to the present day- to do anything for the million and a half people they forced out at gunpoint. Bullshit. The Israelis have no right to live there. The very state exists only at the rest of the world's sufferance. The least they can do is not kick someone else out of the fucking boat when the others let them get in out of sympathy.
Edit: oh and some Jews suffer discrimination on the basis of their religion in Israel- the non-orthodox, or the Sephardi Jews. Almost no Sephardis have any position in the national government. They're poorer, less educated and more unemployed than the Ashkenazis (and the Muslims are even worse than either of them). So some Jews still suffer persecution for being Jews.
* Hilariously, it's been anything but. Israel's very existence provoked the decolonised Middle East, who struck against what they saw as a relic of British Imperialism. A series of bloody wars with Egypt only ended when Carter negotiated a peace agreement. Jews in New York were much less likely to be victims of persecution than those in Israel, at least between 1949 and 1979.