Sorry just to correct you there, Muslims, Jews and Christan's lived there in peace for centuries. Which some exception notably the crusades when all these groups were killed by the invaders. During the mandate there was still some peace but the mandate rulers did crush several rebellions by the people.
The reason why the county is in such a mess is because of what happened during the mandate. This is not unique in history or Islam, many Jews and Christans live in Islamic lands now, like they did then. Lets not forget Spain under Islamic rule.