The answer is that your premises about "ownership" are not true. First of all, "ownership" is not the right concept, which applies to private property. The issue is sovereignty.
The San Remo Conference of 1920 divided up the territory of the defeated Ottoman Empire into mandates under the sovereign control of certain European powers. The British were given control over the mandate of Palestine. There was no entity called "The Jewish People" that was granted sovereignty over the Palestinian Mandate. The Balfour declaration was incorporated to express the intention of the British to establish a national home for the Jews within the Palestinian Mandate. It is important to note the original text of the declaration, pasted here:
His Majesty's government view with favour the establishment in
Palestine of a national home for the Jewish people, and will use their
best endeavours to facilitate the achievement of this object, it being
clearly understood that nothing shall be done which may prejudice the
civil and religious rights of existing non-Jewish communities in
Palestine, or the rights and political status enjoyed by Jews in any
In 1947, the recently formed United Nations passed Resolution 181 which partitioned Palestine into Jewish and Arab sovereign states. This was done after years of fighting between the Jewish immigrants and native Arabs lead the British to conclude that they could not share power under a single sovereign state. The Arabs largely rejected the partition and the war of 1948 soon began.
The Jews were victorious in the war, retaining the territory granted to them under the partition, as well as conquering around 60% of the partition given to the Arabs. Transjordan ended up with control of the West Bank, and Egypt with Gaza.
In the 1967 war, Israel won control over the West Bank and Gaza. These became occupied territories, and were not previously under the control of Israel but of other states. The opinion of the US and several others including Israeli officials was that, although a temporary military occupation of the territories was not against international law, moving settlers onto the land was a violation of the Fourth Geneva Convention. See also here.
Another issue altogether is the extensive settlement on private property. This has been defined by the Israeli Civil Administration as theft.