Below is the text you quoted from UN resolution 242 passed in 1967 right after Israel won a defensive war against 5 Arab nations trying to genocide them. At the time it was passed, Israel was in full occupation of the Golan Heights, the West Bank, Gaza, and much of the Sinai peninsula. The UN declared that Israel had not been the aggressor, and because it was only defending itself, it had the legal right to continue to control lands seized in battle.

Israel was expected to give up its military and administrative control as soon as peace treaties could be negotiated and signed. BTW there was no "Palestine". No one talked of a Palestinian nation. That came later.

excerpt from UN Resolution 242

"Withdrawal of Israel armed forces from territories occupied in the recent conflict;"

HERE IS THE "REST OF THE STORY..."

(ii) Termination of all claims or states of belligerency and respect for and acknowledgment of the sovereignty, territorial integrity and political independence of every State in the area and their right to live in peace within secure and recognized boundaries free from threats or acts of force;

Note: it says "Of every state in the area" meaning that Palestine was not even considered since it wasnt a state in the area.

WHAT HAS HAPPENED SINCE UN RESOLUTION 242?

Israel has proceeded with negotiations with Jordan, signed a peace treaty, negotiated borders, and has mutual recognized sovereignty with the State of Jordan.

Israel has proceeded with negotiations with Egypt, signed a peace treaty with Egypt, given back 94% of the land it took over in 1967 (especially in the Sinai which had enough oil to supply Israel's needs forever), and has mutually recognized borders.

In 1994, Israel signed a peace treaty (the Oslo accords) with the Palestinians. Negotiated borders. turned over civil administrative control to a brand new, Palestinian Authority created just for this task.

But Arafat couldn't let Israel live in peace and security. He aided and abetted terrorist attacks to disrupt the peace process, and never abandoned his affiliation with terror groups whose true goal is the destruction of Israel. That is why Israel still occupies the West Bank and Gaza. It is because the Palestinian Arabs dont want peace. They want Israel. All of it.

No peace treaty will ever be good enough for these leaders. they will stop at nothing but the whole enchilada--- the destruction of the Jewish state of Israel. Palestinian violence didnt stop. It was accelerated.

So-until a peace agreement can be formed, Israel still LEGALLY occupies what may someday become Palestinian lands. And as it legally occupies the land, building on it is legal too.