I think the Europeans knew that these guys are going to create trouble anywhere in the world, so best to keep them far away from Europe and fighting with someone else so they don't turn towards Europe again. Isolated on Iceland or another island, they would've turned toward troubling Europeans spontaneously; Europeans occupiers in South Africa or other islands.
There was also the idea, initially, to create a Jewish homeland in Africa, known as the
Uganda Scheme, presented by the founder of modern Zionism, Theodor Herzl; as well as in Cyprus.