The Provençal Rabbi and scholar, Rabbi Abraham ben David, wrote in anno 1161: “A tradition exists with the [Jewish] community of Granada that they are from the inhabitants of Jerusalem, of the descendants of Judah and Benjamin, rather than from the villages, the towns in the outlying districts [of Palestine].”  When exactly these Jewish immigrants first settled in Spain is not clear, as there are references to two Jewish influxes into Spain, one following the destruction of Israel’s First Temple and the other after the destruction of the Second.
The earliest mention of Spain is, allegedly, found in Obadiah 1:20: “And the exiles of this host of the sons of Israel who are among the Canaanites as far as arfat (Heb. צרפת), and the exiles of Jerusalem who are in Sepharad, will possess the cities of the south.” While the medieval lexicographer, David ben Abraham Al-Alfāsī, identifies arfat with the city of arfend (Judeo-Arabic: 2],(צרפנדה] the word Sepharad (Heb. ספרד) in the same verse has been translated by the 1st century rabbinic scholar, Yonathan Ben Uzziel, as Aspamia. Based on a later teaching in the compendium of Jewish oral laws compiled by Rabbi Judah Hanasi in 189 CE, known as the Mishnah, Aspamia is associated with a very far place, generally thought of as Hispania, or Spain.
According to Rabbi David Kimchi (1160–1235), in his commentary on Obadiah 1:20, arfat and Sepharad, both, refer to the Jewish captivity (Heb. galut) expelled during the war with Titus and who went as far as the countries Alemania (Germany), Escalona, France and Spain. The names arfat and Sepharad are explicitly mentioned by him as being France and Spain, respectively. Some scholars think that, in the case of the place-name, arfat (lit. arfend) – which, as noted, was applied to the Jewish Diaspora in France, the association with France was made only exegetically because of its similarity in spelling with the name פרנצא (France), by a reversal of its letters.
Spanish Jew, Moses de León (ca. 1250 – 1305), mentions a tradition concerning the first Jewish exiles, saying that the vast majority of the first exiles driven away from the land of Israel during the Babylonian captivity refused to return, for they had seen that the Second Temple would be destroyed like the first. In yet another teaching, passed down later by Moses ben Machir in the 16th century, an explicit reference is made to the fact that Jews have lived in Spain since the destruction of the First Temple:
“Now, I have heard that this praise, ‘emet weya iv’ [which is now used by us in the prayer rite] was sent by the exiles who were driven away from Jerusalem and who were not with Ezra in Babylon, and that Ezra had sent inquiring after them, but they did not wish to go up [there], replying that since they were destined to go off again into exile a second time, and that the Temple would once again be destroyed, why should we then double our anguish? It is best for us that we remain here in our place and to serve God. Now, I have heard that they are the people of ulay ulah (Toledo) and those who are near to them. However, that they might not be thought of as wicked men and those who are lacking in fidelity, may God forbid, they wrote down for them this magnanimous praise, etc.”
Similarly, Gedaliah ibn Jechia the Spaniard has written:
“In ,252 anno mundi (= 1492 CE), the king Ferdinand and his wife, Isabella, made war with the Ishmaelites who were in Granada and took it, and while they returned they commanded the Jews in all of his kingdom that in but a short time they were to take leave from the countries [they had heretofore possessed], they being Castile, Navarre, Catalonia, Aragón, Granada and Sicily. Then the [Jewish] inhabitants of ulay ulah (Toledo) answered that they were not present [in the land of Judea] at the time when their Christ was put to death. Apparently, it was written upon a large stone in the city’s street which some very ancient sovereign inscribed and testified that the Jews of ulay ulah (Toledo) did not depart from there during the building of the Second Temple, and were not involved in putting to death [the man whom they called] Christ. Yet, no apology was of any avail to them, neither unto the rest of the Jews, till at length six hundred-thousand souls had evacuated from there.”
Don Isaac Abrabanel, a prominent Jewish figure in Spain in the 15th century and one of the king’s trusted courtiers who witnessed the expulsion of Jews from Spain in 1492, informs his readers  that the first Jews to reach Spain were brought by ship to Spain by a certain Phiros who was confederate with the king of Babylon when he laid siege to Jerusalem. This man was a Grecian by birth, but who had been given a kingdom in Spain. He became related by marriage to a certain Espan, the nephew of king Heracles, who also ruled over a kingdom in Spain. This Heracles later renounced his throne because of his preference for his native country in Greece, leaving his kingdom to his nephew, Espan, by whom the country of España (Spain) derives its name. The Jewish exiles transported there by the said Phiros were descended by lineage from Judah, Benjamin, Shimon and Levi, and were, according to Abrabanel, settled in two districts in southern Spain: one, Andalusia, in the city of Lucena - a city so-called by the Jewish exiles that had come there; the second, in the country around ulay ulah (Toledo).
Abrabanel says that the name ulay ulah (Toleo) was given to the city by its first Jewish inhabitants, and surmises that the name may have meant טלטול (= wandering), on account of their wandering from Jerusalem. He says, furthermore, that the original name of the city was Pirisvalle, so-called by its early pagan inhabitants. He also writes there that he found written in the ancient annals of Spanish history collected by the kings of Spain that the 50,000 Jewish households then residing in the cities throughout Spain were the descendants of men and women who were sent to Spain by the Roman Emperor and who had formerly been subjected to him and whom Titus had originally exiled from places in or around Jerusalem. The two Jewish exiles joined together and became one.
Finally, in the Midrash Rabba (Leviticus Rabba 29:2) there is a reference made to the Jewish exiles in Gallia (i.e. Austria and France, as well parts of Belgium) and in Aspamia (i.e. Spain), saying, that these Jewish exiles will eventually return to their own land. May G-d quickly bring back the dispersed of our nation!