MOSLEMS controlled the entire area now "demanded" as a Palestinian state- YET they did NOT allow the formation of that state.

You're making the assumption that Moslem == Palestinian. There never was much pan-Moslem solidarity, or even pan-Arab, witness the short life of the United Arab Republic. The fact that Jordan, as well as Israel, annexed Palestinian territory is irrelevant. That's like arguing that it was OK for Russia to invade Poland, because Germany had done so. In any case, they gave it up after they had lost it...