By 1948 the US and the UK were already deeply invested in re-arming and recruiting ex Nazis in Germany to fight against the Soviets. Creating a new Jewish state there would have interfered with that project.

Moreover, I think that the Jews themselves - especially those from Eastern Europe and Russia - would not have felt comfortable with Germany as a neighbor.

By contrast, having a well-armed and well-financed capitalist "ally" in the oil-rich Middle East was greatly in the US's strategic interests, as it gave them access to the region and a bulwark against the Arab states, many of which were already aligned with the USSR.