I could have phrased the question as "why didn't Egypt and Jordan, who respectively occupied the Gaza and West Bank, grant Palestinian independence between 1948 and 1967" but I wanted to have a more neutral and open ended tone to the question.
Why wasn't Palestine an internationally recognized undisputed state before Israel eventually occupied it in 1967?
During the 1948 Arab-Israeli War the West Bank was occupied by Jordan. Then-monarch King Abdullah had designs on annexing it rather than establishing an independent Palestinian state. The annexation however was not recognized as legitimate by most of the world. Egypt occupied the Gaza Strip at the same time and they did make at least a nominal attempt to set up a Palestinian state under the so-called "All Palestine Government" but this regime lacked the means to govern and effectively the Gaza Strip remained an Egyptian protectorate until the "Six Day" War of 1967 when it, along with the West Bank and the Sinai, was occupied by Israel. (The Sinai was returned in the 70s.)