A commentor wrote (hey, we love comments!) in response to R. Nati's post:
I don't really get it. With the Jewish state of Israel, how can Jews be in exile? Are you saying that those who do not return are in exile because of their own desire for luxuries? It's an interesting thought. Is the idea that Hashem will cause something to happen which will ignite a return to the promised land?
(Remember, this is a kabbalistic web site, so some of this answer is oriented towards that.)
We learn that G-d desires to manifest a presence in this world. In the story of Genesis and the Garden of Eden, we see that G-d was 'physically' there, he spoke to Adom, there was a manifest presence of G-dliness. We refer to this presence of G-d as the Shechina (which describes G-d with a certain relationship to this world and certain attributes, it's a particular 'aspect' of G-d).
But, as the inhabitants broke the rules, G-d could not continue this presence without moving to an aspect of severe judgment and destroying the world. Therefore, this presence was withdrawn. G-d went in to exile from the physical world, entering a minimum presence mode.
We learn that Avraham Avenu (Abraham our father) began the process of drawing this presence back in to the world. Step by step (10 steps) until the time of Moshe Rabaynu (Moses our teacher), the righteous brought back the presence, until the Shechina manifest in the Mishkan (the portable Temple or Sanctuary build in the time of Moses).
The portable sanctuary was converted into the permanent Jewish Temple which stood on the mountain in Jerusalem, the Temple Mount, Har HaBayit (which was prepared by King David and constructed by King Solomon). The divine presence took up permanent residence. Until...
A level of national sin forced it to depart, step by step. Subsequently, the nation was conquered, finally leading to the destruction of the Holy Temple. The Jewish people refer to this as the first exile.
The Jewish people in exile received permission to return to their land and rebuild their temple. Only a minority of the exiles chose to follow their leader and do this. The great and Holy Temple was rebuilt. The miracles of the Temple returned, but the divine presence did not fully return. Until...
A level of national intercene hatred pushed it farther away. Subsequently, the nation was conquered, finally leading to the destruction of the 2nd Holy Temple. The Jewish people refer to this as the second exile, which continues until today.
The prophecies (written during the time of the portable sanctuary or the first Temple) refer to the destruction of the first and second Temples, the ultimate returning to Israel, rebuilding of the 3rd holy Temple, and the complete return of the divine presence, the Shechina, to this world.
The Jewish people began returning seriously to Israel in the mid-1800's, but the land had a very limited ability to support a population, so a real opportunity was not there. In the early 1900's, Jewish presence grew, but the land was pulled in to World War I (with the forests being stripped to provide wood to the Ottoman Empire). It fell and came under control of the British, who severely limited Jewish immigration to keep the Arab population happy.
During World War II, the British kept Jewish immigration to Israel locked down while Jews were slaughtered during the Holocaust (as did most countries in the world, with the notable exception of Mexico [yes Moshe Meir, this is from your comment :-)]. After Israeli independence (1948) some remaining Holocaust survivors came to Israel as well as a portion of Jews living in Arab lands. In the 50's (if I have my history correct), the Arab nations started preventing Jews from leaving, until the 6-day war , after which almost all the Arab nations expelled almost all their Jews.
During this same time, Russian Jews were also locked in, prevented from leaving. This continued until the late 1980's.
About the only Jew's that were able to freely immigrate to Israel were American and British Jews (most other Western European Jew's were dead).
Today, most Jew's are free to immigrate to Israel (though Indian Jew's are currently having problems, as are the remaining Jew's in Iran who are instantly imprisoned for even speaking of Israel).
However, the Temple Mount, the site of the holy Temple, is still in Arab hands. The politics of this are interesting, weird and disturbing, but essentially the Israeli government was terrified of upsetting 1 billion world Muslims, so after retaking Jerusalem in 1964 they returned the holy site to the Muslims since they (the Muslims) had built a series of mosque's there hundreds of years ago.
So today the Temple is not rebuilt, the divine presence remains in exile, and the Jewish people have no access to the most holy Jewish spot in the world.
BS"D - בסיעתא דשמיא