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stylin, you asked: "The question: if Israel was for the jews and was carved out of palestine, who\what were those that weren’t Jews and lived in the area known as Palestine?"

IT IS A VERY COMPLICATED HISTORY and I am NOT good at history, but this is what I find.

"What was Palestine called in Bible times?
the land of Canaan

From the time nations began, the Bible calls the Promised Land “the land of Canaan” until the days of Joshua around 1390 BC when that region took on the designation “the land of Israel.” The Bible never calls it Palestine."

Did the Israelites live in the land of Canaan?
The Israelites (12 Tribes) occupied and conquered Palestine, or Canaan, beginning in the late 2nd millennium bce, or perhaps earlier; and the Bible justifies such occupation by identifying Canaan with the Promised Land, the land promised to the Israelites by God.

"Whoever the ancient Canaanites were, their identity was lost in the successive invasions by foreign people interested in controlling an important hub of commerce. Whatever else Canaan may have been, a homeland to some and a 'promised land' to others, it was strategically located to facilitate trade. Control of the region, and the wealth it could generate, was therefore sought by numerous foreign powers. By the time the region was part of the Eastern Roman or Byzantine Empire in the 4th century CE, the land known as Canaan was no more than a narrow territory at the edge of the Mediterranean Sea approximating modern-day Lebanon."

"The Palestinian Declaration of Independence formally established the State of Palestine, and was written by Palestinian poet Mahmoud Darwish and proclaimed by Yasser Arafat on 15 November 1988 (5 Rabiʽ al-Thani 1409) in Algiers, Algeria. It had previously[1] been adopted by the Palestinian National Council (PNC), the legislative body of the Palestine Liberation Organization (PLO), by a vote of 253 in favour, 46 against, and 10 abstaining. It was read at the closing session of the 19th PNC to a standing ovation.[2] Upon completing the reading of the declaration, Arafat, as Chairman of the PLO, assumed the title of "President of Palestine."[3] In April 1989, the PLO Central Council elected Arafat as the first President of the State of Palestine.[4]"

SO BASICALLY THE PALISTINIANS JUST DECLARED THEMSELVES A STATE.

"While the U.S. does not recognize the State of Palestine, it recognizes the Palestine Liberation Organization (PLO) as the legitimate representative entity for the Palestinian people; following the Oslo Accords, it recognized the Palestinian National Authority as the legitimate Palestinian government of the Palestinian ..."