The correct answer is - C. The state of Israel was carved out of Palestinian lands in 1948.
The conflict between Israel and Palestine is mainly due to a territorial dispute because the state of Israel was established on a land were Arabic people leaved, that later had taken the name of Palestinians. So the Israelis consider this land to be their holy land and also a land deserved to have after the genocide over them in the WW II, while the Palestinians consider it as theirs because there was relatively small Israelite population in there before the mass migration from 1948 onward, and it is seen by them as an invasion over their lands.
