What would have happened if Israel was never created ?

No Palestinians would have been massacred, ethnically cleansed from their ancestral homeland, lived under apartheid, and genocided for more than 76 years.
Arab Jews would have remained prosperous living in their respective Arab countries.
The view of the US and the West amongst Arabs would not be negative, unlike now, due to their staunch support of Israel.
Most definitely, the Middle East would have been a much more stable and peaceful region.