So, why build a glorious city like Jerusalem where it is? If you look at the surroundings then you will realise that it is built in completely the wrong place!
If you were to build a city then surely you would want to build it near the sea and build a port. What about a proper road and rail link, trade routes?, and certainly you would want to build where it is easy to defend. Well, Jerusalem - certainly in ancient history had none of these important qualities. It's also surrounded by hills making it hard to expand and difficult to get to from the lower coastal regions as you need to ascend at least 750 meters! Not so easy in the old days. So why is Jerusalem where it is?
Let's consider that Jerusalem is in the Holy Land and as such is central to all three major religions here:
Judaism
Christianity
Islam
As you see the list that is the proper timeline order, so let's start with Judaism,
We need to go back almost four thousand years to the story of Abraham and Isaac. Of God telling Abraham to sacrifice his son and of Abraham agreeing to do so. He does however ask "Where shall I do this?", and the answer was "At a place that I will show you for you will feel my spirit". This is identified as a mountain top called Moriah around which the Jewish Temple will later be built on the spot where Abraham was prepared to but did not sacrifice his son and is therefore considered to be the most holy of places in Judaism for it was here that God revealed his presence.
For Christianity, if you move forward almost two thousand years from the time of the Patriarch Abraham, you now meet the time of Jesus and his crucifixion and resurrection in Jerusalem making it a place of holiness and pilgrimage throughout the Christian world. It is a place for prayer and inspiration for many people particularly at Christmas and Easter where pilgrims from all over the world rub shoulders.
Let's now move on in our time line to about 1450 years ago and the era of the founder of Islam, Mohammed. For Muslims throughout the world Jerusalem is the third holiest place in Islam after Mecca and Medina for Jerusalem (or, Al - Quds) is where the tradition and story is told in the Quran of Mohammed ascending to heaven from Jerusalem to receive from God, the gift of prayer.