Yeah sorry but I think the "modern day" part has an issue you identified here:

Israel was created as a solution to the problem that millions of Jews were homeless refugees after surviving the Holocaust.

Exactly. Israel was created without the consent of the people already living there, in the British Mandate of Palestine aka Palestine.

The Arabs could have welcomed them, worked out two-state solution with mutual economic interests and good trade relations. Instead they absolutely refused to give up anything to these poor folks

Imagine that Russia renames Crimea and declares it an independent country. Should Ukraine accept the "two state solution"? You cannot brush over the fundamental history of what happened.

You're right, it is a modern issue, and this is it. It is not accepted by the people who were already living there and it never has been.

Of course in practice I don't think anyone should be removed from their homes. The solution to this problem shouldn't be more atrocities. But when we lose sight of the fundamental cause of the issue it's easy to create this narrative like you just did that people should have welcomed the colonial creation with open arms, even after people were driven from their homes in the nakba and have never been able to return.