Arabs do not want Jews to own or control land in the Middle East.
Everything else - pretending to care about Palestinian refugees, or about "war crimes", or "international law" or "UN resolutions" - are all lies, window dressing to cover the naked bigotry that stands behind all the bluster. Arab Muslims cannot stomach the weak dhimmi Jews owning any tiny bit of land that was ever under Muslim control. No matter how legally it is acquired, Arabs would be just as livid at the thought of Jews owning land as they are today about "occupation."
Jews are OK as long as they subject themselves to living as second-class citizens in Arab countries, paying their jizya. But once they actually try to act as if they have any real rights, well, that is not acceptable to the mentality of the vast majority of Arabs.
The root of the conflict is pure bigotry against Jews.
It is not even clear if any Jews were interested in leasing (not buying!) the land mentioned in this article, or if it was only a rumor. This doesn't slow down the vitriol, as thousands of Arabs rally against the possibility of Jews controlling any land in sacred Muslim territory.
Notice how at that time the Arabs are not shy in saying their opposition is to Jews, not Zionists; that they call the legal transfer of land "robbery" when it is to Jews; and the now familiar method of subtly threatening the West (in this case, Britain) if they don't cave to the Arab demands.
To understand the Middle East today, read this article from 72 years ago very carefully.
In an ironic footnote, one can find one other mention of Ghor Al Kabad in Transjordan in 1939, where Jews help out the Emir who owns land in the controversial area:
Yes, it truly is awful to let Jews touch "sacred Arab land."