Judaism developed in Mesopotamia in the vicinity of Palestine, although Babylon does figure prominently in their history. They were originally known as Hebrews, and traced their lineage back to Abraham, who was born in the city of Ur in Mesopotamia. Many Jewish traditional stories have roots in Mesopotamia, such as the Tower of Babel, which was most likely a Ziggurat; and the story of Noah and the Flood, which bears a striking resemblance to the Epic of Gilgamesh.
The Hebrews were later called Israelites, and settled in the area of present day Palestine. Because of a political dispute, the nation of Israel divided into two kingdoms; the northern Kingdom of Israel, and the southern Kingdom of Judea. Those who lived in Judea eventually became known as Jews. Both kingdoms were destroyed by the Babylonians and many were carried away as slaves, a period known as the Babylonian Captivity. This period had a distinctive influence on Jewish religion, and the period is discussed in some detail in the Old Testament (for Jews, the Holy Scriptures.) However, the religion did not originate there.