Rabbi Meyasha the grandson of Rabbi Yehoshua ben Levi said (Kesuvos 75a): This verse is applicable to any Jew that was born in Zion and one who yearns to see her. Even Jews who were born elsewhere will be considered children of Zion, provided that they learn to return there.
I began writing the following incident when I was shown that it was already printed in Daf Digest link, so I am writing their version (with a comment or two of my own).
During World War I, Palestine was under Turkish jurisdiction and the Ottomans made life very difficult for the citizens. Press gangs would roam the streets arbitrarily drafting anyone in their wake. The conditions of these forcibly drafted soldiers were exceedingly difficult. They were subjected to hard labor, and since food was exceedingly scarce they were severely underfed.
These circumstances could all be circumvented by paying bribes to officials. However, there was one decree that was exceedingly difficult to avert. The Turks declared that anyone not born in Palestine would be deported. This was more difficult to deal with than forcible conscription, since the only way someone born out of the country could get around this was to lie on the government forms.
Since everyone knew that Rav Yosef Chaim Sonnenfeld, zt"l,(where I saw this story brought down, it was with Rav Yosef Rogotchovi from Petach Tikva, but see below)was very careful to avoid falsehood in any form no matter what it might cost, people were afraid that he would forbid people to lie on the forms. During those difficult times, simple honesty would result in the sundering of many homes. When someone ventured to ask the Rav's opinion about this issue, he surprised everyone in the Old Yishuv. "It is certainly permitted!"
"But why is this different from any other falsehood which the Rav prohibits?" the questioner asked.
Rav Sonnenfeld explained, "This is explicit in Kesuvos 75 on the verse, 'And of Tzion it shall be said, each and every man is born therein.' The Gemora learns from the redundancy of the word "man, each and every man" that one who yearns for Tzion is as one who was born there. We see clearly that any Jew who yearns for Tzion is actually considered as one who was born in Tzion! So to write of those who came up to Tzion out of longing for her holiness that they were native citizens is no lie at all: it is a declaration of the absolute truth!"
I saw this ruling from Rav Sonnenfeld in a slightly different context. It was a question regarding people who were not born in Eretz Yisroel and they were seeking permission from the courts to emigrate to Eretz Yisroel. The courts were only granting visas to those who were born in Eretz Yisroel. Rav Sonnenfeld ruled, based on our Gemora that not only is it permitted to testify that you were born in Eretz Yisroel, but one is obligated to do so. It is not regarded as a lie at all, since one who yearns to return to Eretz Yisroel is regarded as if he was born there.
The Kloizenberger Rebbe zt"l added the following: It is written that the lifespan of a person is seventy years. The Gemora in Shabbos (89b) states that the Heavenly courts do not administer punishment for the first twenty years of one's life. Consequently, it can be said that the seventy years do not begin until one is twenty years old. So too, it can be said regarding one who emigrated to Eretz Yisroel. The seventy years of his life begins only after he lives in Eretz Yisroel.
This can be proven from Rashi's commentary on the following verse [Breishis 16:3]: So Sarai, Avram's wife, took Hagar the Egyptian, her handmaid, at the end of ten years of Avram's dwelling in the land of Canaan, and she gave her to Avram her husband for a wife. Rashi writes: This tells us that the time they dwelled outside of Eretz Yisroel does not count in the calculation.