In 1948 the leader of the Jews David Ben-Gurion declared an independent Jewish country named Israel according to this plan. The local Arabs, assisted by armies of the neighboring Arab countries, attacked this state, beginning a war called “The War of Independence” in Israel. Israel won, in the sense that it did not succumb and kept its sovereignty within borders that were larger than what the 1947 UN plan allotted it. When a ceasefire was reached, the northern part of the lands that were supposed to become an Arab state (Western Galilee) became Israeli territory and the Arabs who lived there received Israeli citizenship. The central part, known as Judea and Samaria or the West Bank, became part of the Kingdom of Jordan, and the southern part, known as the Gaza strip became part of Egypt. In the process many Arabs left their homes, and became known as the Palestinian refugees.
For the next 19 years Israel kept developing and absorbed many Jewish refugees from Arab countries. The idea of an Arab state in Palestine was somewhat forgotten, but Israel kept having conflicts with neighboring Arab countries, and the climax of this was the 1967 Six-day War. In the short, but intense, war, the Israeli army occupied all of the West Bank and Gaza. In 1948 these territories were supposed to become an Arab state, but in practice they were administered by Jordan and Egypt and nobody complained much. After Israel took over, the idea of a Palestinian state was revived and pushed intensely.
In 1988 Palestine Liberation Organization declared an independent state of Palestine. It didn't specify the borders, but it did specify that it is an Arab state. This declaration was symbolic, because this organization worked in Tunisia and had no effective presence in the land of Palestine.
In 1993 Israel signed the Oslo accords with this organization, establishing the Palestinian National Authority, effectively giving the PLO partial sovereignty in part of the West Bank and Gaza. In Israel it is frequently called "autonomy" or "authority". It has its own passport, police and government. Some countries recognize it as an independent state and call it "State of Palestine", but this recognition is not universal.
As of 2014, the conflict with Israel continues, because the authority, as well as other Palestinian organizations such as Hamas and Islamic Jihad have significant demands, most notably: sovereignty over more land, sovereignty in the city of Jerusalem or at least a part of it, giving Palestinian refugees the right to return to their homes, and stopping the enhancement of the Jewish settlements in the West Bank (or destroying them completely). Israel declared several times that it is willing to discuss these things, but it demands from all Palestinian organizations to stop all violent acts against Israel.
The conflict is extremely complicated and it still continues.
Disclaimer: I am Israeli. I tried to be neutral, but these are the terms in which Israelis and our supporters see the things; Palestinians and their supporters may describe things differently. Even inside Israel there are different views on the matter. I don't claim to have the ultimate truth about the matter. The nice thing about Quora is that it allows different personalities and opinions.
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