Territory acquired by an aggressor is illegal. Territory acquired in self defense (as in all the Arab nations attacking the Jewish state which accepted the proposed partition) is a different story. Furthermore with the Arab having rejected the partition plan , the League of Nations agreement on a Jewish state of 1922 says it is LEGAL. JERUSALEM WAS NEVER AN ARAB CAPITAL. Arab claims on Jerusalem are egregious and not the way to achieve peace.
from the article: Abbas: I choose Netanyahu as my partner for peace