Israel invades the gaza strip.

1) The 'christian' world is larger, why not place them there ? most of them were from europe anyways.

Jews are not Christians.
Christians and Jews have been in a longer running war than Jews and Muslims, actually. Centuries upon centuries of anti-Semitisim in the form of pogroms, inquisition, blood-libel, "The Protocols of the Elders of Zion", the Dreyfus case (google "J'accuse") and finally that little altercation in Europe in the 1940's, have convinced both the Jews and the World that they need a place where they can rule and defend themselves.

2) Jews and muslims have been in a long running 'war' with each other for thousands of years. 60 years is a miniscule length to expect a long running tension to be solved.

Muslims haven't even existed for thousands of years.
But yes, it's a long-running on-and-off dispute. However, there was no need to use the Palestinians as pawns in this game. The Arab countries could have taken them in, while still carrying on the Jihad against Israel. Having these poor people live in refugee camps for generations as an excuse for continued hostilities on Israel ("we must get these people's home back") and to make them desperate enough for suicide bombings and such, is absolutely unforgivable.