The world didn't decide Palestine would be a land for the Jews--the Jews did. An early controversy in Zionist thought was whether or not a Jewish state anywhere was acceptable, or whether it had to be Palestine. Europe wasn't even on the table--the idea of a European country giving up territory to the Jews wasn't really a possibility. The main plan was a Jewish state in Africa, where the European-carved borders could easily be adapted without the local population having a say. Ultimately, this plan was rejected, despite the backing of prominent Zionists (such as Theodor Herzl. Despite his leadership and prominence in what people know of early Zionism, very little of his ideology actually made the cut).

I assume by referencing Germany you're talking post-WW2. By WW2, a Jewish nation-building effort in Palestine was well under way. By the outbreak of WW2, there were nearly a half-million Jews in Mandatory Palestine, far more than there were in Germany (which had roughly a quarter-million when the war broke out. It was in steep decline--when the Nazis took over, it was twice that). And there were already Jewish proto-state institutions in Mandatory Palestine.

By the time WW2 ended, there were no areas in Europe that had a substantially Jewish population. Even pre-war, while parts of Eastern Europe had substantial Jewish minorities, there wasn't an area of regional majority. There also wasn't a Jewish statehood movement in Europe. Bundism, a Jewish political movement of the early 20th century, which believed in Jewish autonomy within European countries (the closest you'd get to a movement for a Jewish state in Europe), didn't work out simply because most of its believers were killed.

So in short, there was no sensible location for such a state, nor was there a serious desire by anyone for a Jewish state in Europe. Palestine had substantial ideological backing, an organized Jewish community, and substantial pre-war statehood planning. The question's premise is flawed, though--Israel wasn't formed because the Western powers willed it. It was formed because there was a substantial Jewish movement to do so, which received the backing of the international community after WW2.

Palestine was very much in mind before even the 1880's.

Der Judenstaat, the Balfour Deceleration and the defeat of the Uganda Proposal all preceded the second world war. The world didn't decide to give land to the Jews. The Zionists decided to take land for a future Jewish home.

The problem for the Zionists was they couldn't get enough Jews to go settle in Palestine. Prior to WW2, emigration from Europe to Palestine was always a trickle and the immigration aims were always massively overstated and incredibly over-optimistic. Even as pogroms and severe persecution took place in Eastern Europe, the Zionists aim to achieve parity of numbers with the Arab population was a failure. WW2 and the holocaust served as the impetus for massive emigration to Palestine of European Jewry.

Just as the Balfour declaration gave international legitimacy to Palestine as a Jewish home (not state, as the word 'state' makes no appearance in the Declaration), the emigration of Jews in the post-war period gave "meat" to the Jewish community in Palestine.

Source: The History of Zionism by Walter Laqueur

Palestine was established as a Jewish home after World War I with the British Mandate for Palestine (as a consequence of the Balfour declaration), not in 1948 (the beginning of the State of Israel), as is commonly believed.