The name "Palestine" stems from the ancient Philistines, who formed an independent state alongside the ancient biblical kingdom of Israel. Greeks and Romans regularly used the term, and the Romans officially gave the name "Palestine" to the province of Judea around 135 C.E., after the second Jewish revolt. The name survived throughout the Middle Ages under both Arab and Ottoman rulers, who routinely referred to Palestine's residents as "Palestinians." Medieval and early modern Jewish writers also often called the Holy Land "Palestine."
A sense of Palestinian identity is clearly evident in the Arab-organized Syrian-Palestinian Congress of 1921 and was fostered by the establishment, under the League of Nations, of the "British Mandate for Palestine" in 1922. In 1927, more than twenty years before the founding of Israel, Palestinian coins were issued bearing the name "Palestine." Even the Palestine Liberation Organization (PLO) was created in 1964, thirteen years before Newt Gingrich's "1977."
Fourth, it's false to say that Palestinians were "invented" as propaganda. Palestinians have had a distinct and quite depressing history of their own for at least a century. It would be inexplicably bizarre if they had failed to develop a separate sense of identity. Moreover, their Arabic dialect is recognizably unique.
Fifth, it's misleading to suggest that Palestinian identity is merely a tool used by "the Arabs" to manipulate the West. Arabs themselves, though universally sympathetic to Palestinian grievances, perceive Palestinians as distinct. In fact, though this is seldom openly discussed, displaced Palestinians living in their "diaspora" have often been felt, and resented, as a foreign presence in the Gulf and elsewhere in the Arab world—including, even, in Jordan.
Newt Gingrich may or may not be a solid historian of America. With his dismissal of the Palestinians as an "invented people," however, he hasn't established his credibility on the Middle East. And Israel isn't helped by bad history.
Daniel C. Peterson is a professor of Islamic studies and Arabic at BYU, where he also serves as editor in chief of the Middle Eastern Texts Initiative and as director of advancement for the Neal A. Maxwell Institute for Religious Scholarship. He is the founder of MormonScholarsTestify.org.