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"The Palestinian people does not exist. The creation of a Palestinian state is only a means for continuing our struggle against the state of Israel for our Arab unity. In reality today there is no difference between Jordanians, Palestinians, Syrians and Lebanese. Only for political and tactical reasons do we speak today about the existence of a Palestinian people, since Arab national interests demand that we posit the existence of a distinct “Palestinian people” to oppose Zionism.
For tactical reasons, Jordan, which is a sovereign state with defined borders, cannot raise claims to Haifa and Jaffa, while as a Palestinian, I can undoubtedly demand Haifa, Jaffa, Beer-Sheva and Jerusalem. However, the moment we reclaim our right to all of Palestine, we will not wait even a minute to unite Palestine and Jordan."
-- Zahir Muhsein, Palestine Liberation Organization executive committee member, from a 1977 interview published in Trouw (Netherlands) newspaper.

The name "Palestine" is derived from the term Philistine but the modern-day Palestinians have no connection to the biblical the Philistines. The Philistines were a seafaring tribe, likely originating from the area of the Aegean Sea. They also were Hamites, descendants of Noah's son Ham, not Semites, as are the Arabs and the Jews, who are descended from Noah's son Shem. In other words, the Philistines WERE NOT ethnic Arabs.

There have been several regions over the centuries up and down the Mediterranean coast that were called Palestine, usually because they were settlements of people known in the Bible as the Philistines. But the Kingdom of Israel was not one of them until about 70 AD when the Roman Emperor Hadrian sacked Jerusalem and destroyed the Second Temple of Solomon (which marked the beginning of one of many Jewish Diasporas). He also decreed that the Kingdom of Israel be renamed "Palestine" with the specific intentions of insulting the Hebrews, obliterating their history and erasing their hereditary claim to those lands.

The modern term came to use owing to events tangential to the First World War. In the run-up to The Great War, Britain and France colluded to divvy up control of the Middle East so that they might monopolize access to its oil supplies. And it wasn't because of automobiles, it was for strategic military reasons. One of the most prominent proponents of the plan was Britain's First Lord of the Admiralty Winston Churchill, who had seen not just the inevitability of war with the Kaiser, he also recognized how much faster/superior Germany's oil-powered warships were to Old Blighty's coal-powered war vessels. And he calculated that the evil of seizing Arab oil was a reasonable price to pay for the good of preserving his island nation's sovereignty, which since modern times always had hinged on its naval power. Which led to the British Mandate of Palestine.

There are no Palestinians, just like there are no "native" Americans. It's just a name they adopted for the sake of political expediency.

If you want to read a fascinating blow-by-blow account of how the the western powers jockeyed for position to gain control of as much of Arabia as possible once the Ottoman Turks were expelled, pick up a copy of Scott Anderson's "Lawrence in Arabia."