That is not what he is claiming, and that is not a logical claim.
The Kingdom of Israel definitely existed, and therefore its inhabitants, the Israelites, definitely existed. There are a lot of things that are extremely questionable, but that is not. The Israelites definitely existed.
Their origin story is up for debate. Is the Exodus story from Egypt real, or did they drive the Egyptians out of Canaan? No one doubts they were in Israel, and had carved a kingdom out of the old Canaan, but where they came from is in question.
And where they went to is also in question.
There was definitely a Kingdom of Judah with Jews in it to the south of the Kingdom of Israel. There is little evidence that it was ever united with Israel, like the Old Testament claims. When the Kingdom of Israel was destroyed, possible well educated refugees came south to Judah and spread their origin myth of an Exodus. That might have become the origin myth of the Jews.
But the Jews were definitely in the area around Jerusalem before the Babylonian Captivity. The Babylonian Captivity definitely happened in some form. And the Jews definitely repopulated Judah.
Jews expanded out to almost all of Israel, and the West Bank(but not so much Gaza) by the time of Jesus. That is without doubt. What is in doubt is whether the actual Jewish People expanded out, the surrounding peoples were converted into being Jewish People, or whether they were conquered and forced to be Jewish People. Jesus, as a Jew, felt comfortable in both Bethlehem(West Bank to the south of Jerusalem), and Nazareth(today Northern Israel). In fact, he is most identified with North Israel.
Finally, we know that Jews live in Israel now.