"if you live IN a very small country with an increasing population, there is no land that can be allowed to go to waste."
You talk about annexation and throw in the German term "lebensraum" both require that a country increases in size. You cannot annex something that is already located within your borders (famous example from modern History Germany's annexation of Austria or the Sudatenland - did Germany become greater in size or remain the same size Lox?)
Taken in context of the period of time being referred to in the post you are currently gloating over and patting yourself on the back about (1948 to 1952) Israel did not in fact increase in size, Palestine on the other hand did shrink but that land was stolen from Palestinian Arabs by Egypt (Gaza) and by Jordan (East Jerusalem & the West bank) and on that stolen land the Egyptians and the Jordanians shut the Palestinian Arabs up in refugee camps.
Hit you Control+F again Lox and do a search and come up with the German terms for robbing people of their property, their businesses, their goods and forcibly removing them by deportation. In the wake of their losing the 1948 war with the fledgling state of Israel 820,000 Jews suffered exactly that fate at the hands of Arabs. The Israelis did not shut them up in refugee camps and whine about the loses suffered, they welcomed them in (largest influx of Jews into Israel/Palestine ever - all caused by the actions of the Arabs of Palestine and their neighbouring Arab allies) and the country prospered.
Also look at the maps of Palestine around 1947 and look at the areas that belonged to no-one it is described as being "Government Land".
Prior to 1918 any land in what became known as Palestine was held on sufferance from the Ottoman rulers who could take it over as and when they wished.