The Jews were not rewarded for any suffering. After the German surrender, as the Allies witnessed the scope & scale of the crimes against us what did they do?
Absolutely nothing.
Britain maintained its White Paper restrictions on immigration & land purchases in Palestine while the US continued its immigration quotas.
The Jews took Palestine, continued a process they had started decades before. A settler-colonial enterprise? Yes. Very much so. The UN partition simply recognized facts on the ground which the Jews had created, but were not "given".
It wasn't the Holocaust or pre-war pogroms that necessitated said enterprise, but the fact that Holocaust survivors still lived stateless in DP camps into the 1950s. What else would you have them do?
Israel doesn't make sense as anything but a Jewish-majority nation. If that offends sensibilities, so be it. But a "far worse genocide" against the Palestinians? Given that there are way more Palestinians in Gaza & the West Bank than in all of Palestine c.'47 it can't have been a very effective genocide, right?
I will agree that ethnic cleansing (of a sort, avoiding the debate over whether or not one Semitic people can ethnic cleanse another) & other violations have & continue to take place. It's tragic that Israel missed opportunities to provide a stable, secure homeland for the Palestinian peoples in '67 & beyond. True autonomy & compensation for lands taken might have gone a long way towards stabilizing the region.
Final point: the horror of the Holocaust has never been in numbers as much as in the cold, mechanized manner in which it was conducted, without obvious rationale & even during a period where its authors desperately needed the resources used to keep their country from being torn apart.