This is a losing argument. You're trying to play semantics about what is a "country." If Palestine is not a country, then to which country does the land belong? If the land belongs to no other nation, and the people of that land organize their own government, hold elections, and have a self-identity as a nation, and appoint ambassadors who are received by the world governing body and other nations, is that not a de facto nation?

If de facto status- the fact that no one else claims the land is part of their country, and the people there have a functioning government which speaks for the people- isn't enough, how about diplomatic recognition? More nations on this planet than not have formally recognized Palestine as a country. http://en.wikipedia.org/wiki/International_recognition_of_the_State_of_Palestine

I say yes, Palestine should be regarded as a state. Only most of the western world tries to pretend otherwise, and the US has directly worked to prevent UN-recognition.

Take this argument at face value, I am not extending it beyond what I have wrote to make any arguments about Israel, or "occupation" by Israel, etc. I am only arguing that the semantic definition of a "country" is ridiculous given that Palestine functions as an country and the land is not claimed as part of another nation, and the US seems to be the only reason it's not recognized by the UN as a nation.