Well, if we start from the 'living in relative peace' part during during the latter century of the Ottoman empire, one can get quite a clear picture on how we arrived here today. It takes around 3 minutes.
During the Ottoman empire, jews were a small and dispersed minority living under laws that were, in large, inspired on islamic sharia. Although there were regions and periods of time where this was less enforced, it still meant that they would always be second class citizens, or worse. For example: they weren't allowed to build or repair synagogues, could not carry guns or ride horses, had to pay a special tax, etc...
So they were living in relative peace as long as they put up with the systemic discrimination (and the occasional local sectarian massacre but hey, it was the 19th century after all).
So we jump forward to the 1850-1870's and reforms are ongoing to modernize the empire and this came with a lot of the systemic discrimination being removed, moving towards a more secular state with the different religious communities given self-government wrt religious laws. Finally light at the end of the tunnel for the Ottoman jews, right? Well, sucked to be them as in 1876 Turkish nationalists seized power, abolished parliament and installed a new sultan which was a pan-Islamist and sought to re-consolidate the people of his empire under islam. (Btw, the Turkish nationalists would later go on to purge their land by doing multiple genocides, some still ongoing).
So this is where zionism picks up, with Ottoman jews seeing the future darken and the idea growing that they should unite in one place. This led to a lot of jewish immigrants moving into (modern day) Palestine starting around 1880 towards this goal, with the zionist idea picking up around the world, gaining more and more steam and here we are, 2024 and jews and muslims are still fighting over it.