This is in accordance with unanimous UN resolutions (even agreed by the USA) - such as resolution 242, which state that Israel in particular (and any other country in general) cannot gain territory by war. Therefore the land captured in 1967 by Israel (and therefore never was part of the country set up in 1947/8) is occupied territory that needs to be handed over to the conquered inhabitants. (And let us not forget that this is only 22% of the country of Palestine - as defined by the British authorities in official documents, such as the Hope Simpson report of 1930 - which describes in detail where the borders of Palestine with Jordan, Syria, Lebanon and Egypt are.)
What will be predictable is that the pro-Israeli lobby (who want Israel to keep some to all of the land captured in 1967 - depending on how extreme the view is) - will say that Brazil's legal move is not helpful, and some may even argue that Brazil and the UN are wrong and that Israel is entitled to keep some of the occupied land.
Now, if the Palestinians agree to swap some land in exchange for peace - then that is totally their right (and I'd hope they will be gracious enough to do this), but we should recognise that this is giving up what they are legally entitled to - a withdrawal of the occupation forces from land captured in 1967.
Anyway - enough of the historical and legal facts.. here's the story from Haaretz (by AP):
Brazil recognizes Palestinian state
Brazilian foreign ministry says it hopes that the recognition will help lead to peaceful and secure coexistence with Israel.
By The Associated Press
Brazil says it has recognized the state of Palestine based on borders at the time of Israel's 1967 conquest of the West Bank.
The Foreign Ministry says the recognition is in response to a request made by Palestinian President Mahmoud Abbas last month to President Luiz Inacio Lula da Silva.
Silva sent a letter to Abbas on December 1, saying Brazil recognizes Palestine and hopes that the recognition will help lead to states of Israel and Palestine "that will coexist peacefully and in security."
The Brazilian foreign ministry says that the recognition is "in line with Brazil's historic willingness to contribute to peace between Israel and Palestine."
The announcement was posted Friday on the Foreign Ministry's website.
http://www.haaretz.com/news/internation ... e-1.328840