In the year of the anniversary of the Balfour agreement, it seems relevant to sum up my views on this issue.
Following years of discrimination in Europe, the Jews were able to convince one of the world's leading powers to make promises about a homeland. A number of newspapers have carried photos of the letter written by the British foreign secretary to a leading Zionist with the relevant promises. The letter itself is evidence that the discrimination was not a permanent feature of Christian-Jewish relations but something which waxed and waned. So the occurrence of pogroms is without question, but by the same measure there were period where Jews were able to live prosperous lives. It's impossible to claim that only discrimination happened while at the same time celebrating the existence of iconic synagogues and the contribution of Jews to intellectual, cultural and economic life.
Similarly, from the time the Jews were expelled from Palestine to the modern period, they had established communities throughout the Muslim world. Again the fact that they were 'discriminated' against is not in question, but by the same measure so would other minority communities. Inclusivity and anti-discrimination laws are a relatively modern phenomenon. And by the same measure being a minority in different dominions offered Jews various opportunities, they were able to trade between Safavid Iran and the Ottoman empire.
In summary was the condition of Jews, in various countries, such that they warranted their own 'homeland' and that this had to be in Palestine? I think the answer to both questions is 'no'. By definition, a homeland for the Jews cannot be a protection against attack from others because if it was they would not have been expelled from Palestine by the Romans in the first place! Secondly, if the land were so central to Jewish identity, there could have been re-settlement there at many other points in Jewish history, but there wasn't. And the reason is that there were other parts of the world which clearly offered far better opportunities. And the same holds true today, if Israel were so central to Jewish identity there would be far more people living there regardless of the economic costs.
The function that Israel performs, in my opinion, is this. It provides for the Jews living in western countries a defence of last resort, that they have never historically had. No longer will we see periods of Jewish growth followed by pogroms, because Israel has nuclear weapons.