Midras Mazmur 132:14: Mekhilta DeRabbi Yishmael, Sifrei Devarim, Midrash Tanchuma & Shir HaShirim Rabbah

Before the Temple was chosen, all of Jerusalem was fit for (the reposing of)) the Shechinah. Once the Temple was chosen, (the rest of) Jerusalem was excluded. As it is written (Psalms 132:13-14) "For the L–rd has chosen Zion … This is My resting place forever."

Similarly, R. Yehudah expounded (Zechariah 9:1) "A burden (of prophecy) in the land of chadrach and Damascus is its resting place.": This ("chadrach") refers to the Messiah who will be "chad" ("sharp") to the Canaanites, and "rach" ("soft") to Israel" — whereupon R. Yossi b. Dormaskith said to him: Yehudah berebbi, why do you distort the verses for us? I testify by heaven and earth that I am from Damascus and there is a place called Chadrach there. And how do I understand "and Damascus is (its) resting place"? (As meaning) that Jerusalem is destined to extend until Damascus; "(its) resting place" is Jerusalem, as it is written (Psalms 132:19) "This (Jerusalem) is My resting place forever." R. Yehudah: How do you understand (Jeremiah 30:18) "And the city will be built on its foundation"? R. Yossi: (As meaning) that (though) Jerusalem is not destined to move from its place (i.e., from its foundation), it will expand from its sides). How do I understand (Ezekiel 91:7) "And there was an enlarging and a winding about upwards, etc."? Eretz Yisrael is destined to broaden and rise from all of her sides like a fig, which is narrow below and broad above, and the gates of Jerusalem are destined to reach until Damascus. And thus is it written (Song of Songs 7:5) "Your nose is like the tower of Levanon, which looks towards Damascus." And the exiles will come and rest therein, as it is written "and Damascus is His resting place," and (Isaiah 2:2-3) "And it will be in the end of days the mountain of the L-rd's house will be established in the top of the mountains and will be exalted above the hills, and all the nations will flow unto it. And many peoples will go and say: Come, let us go up to the house of the L-rd, to the house of the G-d of Jacob, and He will teach us of His ways and we will walk in His paths. For from Zion will go forth Torah, and the words of the L-rd from Jerusalem."

Why did the Shekhinah appear in the land of Egypt? To teach us that prior to the selection of the land of Israel, all lands merited the revelation of the Holy One, blessed be He, but that after the land of Israel was selected, all other lands were disqualified. Similarly, before Jerusalem was chosen, the entire territory of Israel merited the revelation of the Divine Word, but after Jerusalem was selected, the Divine Word forsook the remainder of the land. Likewise, before the Temple was designated, the city of Jerusalem was considered suitable for the words of the Shekhinah, but after the establishment of the Temple, it removed itself from the rest of Jerusalem, as it is written: For the Lord hath chosen Zion, He hath desired it for His habitation (Ps. 132:13). And it says also: That is My resting place forever; here will I dwell; for I have desired it (ibid., v. 14). Prior to the selection of Aaron, every Israelite merited priesthood, as it is said: It is an everlasting covenant of salt (Num. 18:19), but after he was selected the other Israelites were deemed unfit for priesthood, as it is said: And it shall be unto him, and to his seed after him, the covenant of an everlasting priesthood (ibid. 25:13). Before David was chosen, all Israelites were eligible for kingship, but after the selection of David, all Israelites lost the right of kingship, as it is said: Ye have nothing to do with us to build a house unto our God; but we ourselves together will build unto the Lord, the God of Israel (Ezra 4:3).