I am generally sympathetic to the author's POV, but this is a non-starter as an argument.
There was no such thing as an "Israeli" until 1948, at least as the definition of a nationality. There was no such thing as an "American" until 1776, or as a Kenyan until 1964.
The date of origin of a "nationality" is pretty comprehensively irrelevant. What matters is that the members of this nationality identify themselves with it, which seems to apply to both the Palestinians and the Israelis.
The term “Israeli” may be modern (since 1948), but there have been Israelites throughout history since the children of Israel (Jacob), whose forefathers had inhabited Canaan (pertaining to roughly the same piece of dirt) from the days of Abraham.
“Israelite” is the historic name for a member of that nation, which existed a far piece before 1948.
The Old Testament is an accurate record of these things.
What about the Israelis in the Old Testament? They might take exception to your statement.