The term Palestinian territories (or occupied Palestinian territories) is frequently used to describe the West Bank and the Gaza Strip: territories which are sought by Palestinians as a new nation-state.
Bipolar claims to the same lands have been made, based on exacerbated political and ethnic distinctions. While a neutral observer may view these distinctions as minor, the conflict is in fact an ethnic one, with claims to sovereignty and divinty embellishing the underlying political and territorial issues.
Various meanings of the term
Not all users of the term intend to convey the same meaning, which can lead to confusion. The term "Palestinian territory" is often obfuscated for political reasons--centrally that Israel naturally does not want to unilaterally compromise its own interests, by politically legitimizing any Palestinian claims to land within the boundaries of Israel. At times the term "Israeli territory" will include the very land where Palestinian refugees currently live. Thus not all users of the term intend to convey the same meaning, which can lead to confusion:
- Many advocates use the term Palestinian territories to imply that these ought to belong to the Palestinian people -- or that they already do so, either by right or by international law. In particular, the Palestine Liberation Organization has declared West Bank and Gaza Strip as such territories, following the Oslo Accords.
- Some journalists use the term merely to indicates lands where Palestinian Arabs dwell, outside the "green line", or Israel's border prior to 1967.
- Some Palestinian nationalists consider the land within Israel's de facto boundaries to be de jure part of "Palestine". Some advocates have claimed that maps used in schools under the jurisdiction of the Palestinian Authority depict "Palestine" as consisting of all the territory between the Mediterranean Sea, Lebanon, Syria, the Jordan River and Egypt -- including Israel, the West Bank and Gaza Strip -- though it has been argued that the maps referred to are geological and historical maps (which show regions and geographical features), rather than political maps (which show countries); many of them, however, are political maps, they show the Arab nations while not displaying Israel.
Historical status of West Bank and Gaza Strip
The only natural geographic boundaries for the West Bank and the Gaza Strip are the Jordan River and the Mediterranean Sea, respectively. The rest of their boundaries were defined as cease-fire lines of the 1948 Arab-Israeli War. Following the war, West Bank was annexed by Jordan, though the annexation was recognized only by the United Kingdom and Pakistan. The Gaza Strip was occupied, but not annexed, by Egypt.
Israel captured these territories in the 1967 Six-Day War; since then they have been under Israeli control. The UN Security Council Resolution 242, passed after the war has introduced the "Land for Peace" formula for Israel's normalization with its neighbors. (See discussion
Since the early 1990s, the Palestine Liberation Organization has negotiated with Israel the creation of a Palestinian autonomous administration, and in the perspective - the establishment of an independent Palestinian state on these territories.
The Oslo Accords led to creation of the Palestinian Authority - which includes a Palestinian civil administration in the smaller towns and security presence in the bigger cities on the West Bank and the Gaza Strip. The Authority lacks full sovereignty, but it does possess an army-like police force (however see below for the current status).
Legal Status of the territories
Arab nationalists seeking to create a new Palestinian state in the West Bank and the Gaza Strip generally argue that the presence of Israeli settlements or military forces in them is a violation of international law.
Palestinians seeking to create a new Palestinian state in the West Bank and the Gaza Strip generally argue that the creation and the presence of Israeli settlements or military forces in them is a violation of international law as affirmed by a majority of members of the Geneva convention: "12. The participating High Contracting Parties call upon the Occupying Power to fully and effectively respect the Fourth Geneva Convention in the Occupied Palestinian Territory, including East Jerusalem, and to refrain from perpetrating any violation of the Convention. They reaffirm the illegality of the settlements in the said territories and of the extension thereof. They recall the need to safeguard and guarantee the rights and access of all inhabitants to the Holy Places." 
East Jerusalem, captured in 1967, was unilaterally annexed by Israel. This annexation has not been recognized by the international community, although U.S. lawmakers have declared their intention to recognize the annexation. Other states and organisations have condemned this proposal by some United States lawmakers. Because of the question of Jerusalem's status, some states refuse to accept Jerusalem as the capital of Israel, and treat Tel Aviv as the de facto capital, basing their diplomatic missions there.
Israel claims that these territories are not currently claimed by any other state and Israel has the right to control them, at least temporarily. In other words, Israel's stance is that while Palestinians do have the right for self-determination (as confirmed by the Oslo Accords), it does not mean they should automatically receive these territories or other.
Israel's position, at least in the declarative plane, has not been accepted by most countries and international bodies. The West Bank, and the Gaza Strip have been referred to as "occupied territories" (with Israel as the occupying power) by Palestinian Arabs , the rest of the Arab bloc, the UK , the EU, (usually) the USA (, ), and both the General Assembly and the Security Council of the United Nations.
The international community did not declare any change in their perceived status of the territories as of the creation of the Palestinian Authority between 1993 and 2000. Although an 1999 U.N. document (see the link above) implied that the chances for a change in that status was slim at the period, most observers agreed that the Palestinian territories' classification as occupied was losing substantiality, and would be withdrawn after the signing of a permanent peace agreement between Israel and the Palestinians (see also Proposals for a Palestinian state).
During the period between the 1993 Oslo Accords and the al-Aqsa Intifada beginning in 2000, Israeli officials claimed that the term "occupation" did not accurately reflect the state of affairs in the Palestinian territories. During this time, the Palestinian population had a large degree of autonomy and only limited exposure to the IDF. Following the events of the al-Aqsa Intifada, and in particular, Operation Defensive Wall, most territories outside Palestinian cities (Area B) are under at least some degree of intermittent Israeli military control.
Following the events of the Second Intifada, most of those areas are now once again under effective Israeli military control, so the discussion along those lines is largely moot as of now (autumn 2002).