Jerusalem is a sacred city to Muslims and Palestinians.
It is a much more important/sacred city to Jews/Israelis.
Muslims already have Mecca and Medina.
Religious delusions are not a sound method of determining land ownership.
Sure, but there is still a sense in which you can make judgements on these issues without actually believing that either religious side is a true religion.
The Jewish claim to the area as a holy site is a million times better than the Islamic claim. What do the Muslims have? Some claim about Muhammad travelling to heaven on a horse is it? Oh, and the fact that Muslims conqured the land and built on a Jewish holy site; and of course when they created their own religion there was some borrowing from the Jewish religion. Basically any Islamic claim, is just a derivative thing from Judaism. It's Judaism that has the real claim.
If someone invades Mecca, and builds a temple on a Muslim 'holy site', can we say that Mecca is "holy to different faiths" then? You think that Muslims will accept that?
Also, note that Muslim religious interest in the site may not be so much about it being a "holy site" at all. Maybe that's part of it. But a major part of their interest in keeping the land may be principles of jihad warfare. Muslim fundies don't just claim all of Israel, but they claim territories like Spain also which were once under Muslim control. Once Islam has stolen your land, the "infidels" aren't allowed to get control back.
Off the top of my head, all religious sides were supposed to get access to holy sites in Jerusalem as part of the Mandate for Palestine. Access is one thing. Is it really fair to give sovereign ownership over Judaism's holiest site to a Muslim nation? Jews should really accept that?
Also, while building on someone else's holy site may have been normal behaviour historically, shouldn't Muslims be fairly apologetic *today* for what happened? They aren't personally responsible of course for what happened historically. But why wouldn't they recognize the Jewish history and claim?