No, Western diplomats did not create the state of Israel.
The United Nations Special Committee on Palestine (UNSCOP) studied the issue in 1947 when Britain announced its intention to terminate the Mandate for Palestine and withdraw from the area. They recommended partition. This plan was accepted by the Jews but rejected by the Arabs for a number of understandable reasons. The partition was never implemented. Civil war broke out in 1947 between Arab and Jewish militias while the British, whose obligation it was to keep the peace, basically did nothing. The British withdrew on May 15th 1948 and Israel declared its existence on the same day. The Arab League invaded and the 1948 war began.
When did this become "Palestinian land?" Palestine was under the control of the British in 1948 based upon the Mandate for Palestine. Prior to that Palestine was part of the Ottoman Empire. At no time was Palestine under the political control of the Palestinian Arabs.
The legal basis for the claim that Palestine was supposed to be an Arab state was a series of letters between Sharif Husayn of Mecca and Sir Henry McMahon in which agreement was reached about Arab aid against the Ottoman Empire in exchange for British recognition of an independent Arab state. But there was some confusion about the boundaries of the Arab state. In a letter dated July 14th, 1915 Sharif Husayn laid out the Arab conditions including the anticipated boundaries of the Arab state.
"Firstly.- England will acknowledge the independence of the Arab countries, bounded on the north by Mersina and Adana up to the 37th degree of latitude, on which degree fall Birijik, Urfa, Mardin, Midiat, Jezirat (Ibn 'Umar), Amadia, up to the border of Persia; on the east by the borders of Persia up to the Gulf of Basra; on the south by the Indian Ocean, with the exception of the position of Aden to remain as it is; on the west by the Red Sea, the Mediterranean Sea up to Mersina. England to approve the proclamation of an Arab Khalifate of Islam."
However McMahon placed some limits in a letter dated October 24th, 1915.
"The two districts of Mersina and Alexandretta and portions of Syria lying to the west of the districts of Damascus, Homs, Hama and Aleppo cannot be said to be purely Arab, and should be excluded from the limits demanded."
As late as 1939 Palestinian Arab representatives and the British were arguing as to whether Palestine was included in the "portions of Syria lying to the west of the districts of Damascus, Homs, Hama and Aleppo." Of course the British won the argument.
A partition of Palestine was first recommended by the British Peel Commission of 1936-1937. The recommendation would have created a small Jewish state in the northwest and then merge the remaining Arab areas with Jordon to create an Arab state. The idea was rejected by the Palestinian Arabs because they believed they were promised an independent state and not one to be controlled by the Hashemite dynasty. The British Woodhead Commission found the partition plan impractical anyway because it would involve too much population displacement.
Then WW 2 interrupted and the British finally announced their intention to terminate the Mandate in 1947 because they considered the terms of the Mandate to be irreconcilable. The UN took over the problem and created the United Nations Special Committee on Palestine (UNSCOP) in May 1947 in response to a British government request that the General Assembly "make recommendations under article 10 of the Charter, concerning the future government of Palestine".
