You fail to understand history. Before Israel was created there were no Israelis. All the people who lived in Palestine were Palestinians. There were arabs, Jews and Christian Palestinians.
What we now call Palestinians considered themselves part of the large Arab Umah, they didn't see themselves as Palestinians. Only after 1967 they began calling themselves Palestinians. This People is new, that is why they never had a state of their own. But because they are new and afraid that as new people they will not be illegible for their own state, they began changing their history and tell all kinds of fantasies. There is no need to invent history, if they are people they are entitled for their own state.