(the above description is not what I think is best, it is what is in the Atlas my son just got, 'My Picture Atlas' by Roger Priddy.)

It is an interesting point. I think its fair to expect an Atlas to include a line between Israeli and Palestinian territory. I also think that a dotted line rather than a nation line is more appropriate.

I think its worth pointing out that Gaza and the West Bank are de facto independant. Although officially Palestinian Israel is not an independant country it is an important territorial line. Not as important as one between two nations but much more important that the line between two states/provinces/whatever. Whether or not you should include it really depends on how detailed you want to get.

This is a bit political, but I think that other factors worth taking into consideration if you want to go into what is 'right' are; is Taiwan portrayed as part of China? Is Kosovo independant? and so on. All are considered part of a larger neighbouring country by that larger country but accepted by a large portion of the international community. Its also worth taking into account to a lesser extent whether or not England, Scotland, Wales and Northern Ireland are divided within the Atlas. As Palestine is recognized by a huge portion of the Muslim world though not by the UN and the US (I'm assuming the country where the Atlas is from?) its worth noting that it is considered independant by many people but not officially independant.

I'm assuming you don't agree but I thought the selection from 'My Picture Atlas' was rather tactful.

I'm not sure that the Muslim states have recognized Palestine as an independent country. Doing so would recognize the borders and give a defacto recognition of the state of Israel, which most have not done.

And no, I didn't agree with the atlas's word 'within'. Since no one has recognized that territory as part of Israel and Israel has not annexed it either, saying 'within Israel' does not appear to be factually correct, regardless of what side of the issue you take.

In my oppinion, the best way to write up a map would be to include in the legend the following information:

What date the map's design was finalized.
If a political map, what country's point of view is being used, or what technique is being used to differentiate De-facto soverign entities.

I'd be nice to have all of this on the same page as the map, but that might be asking for too much. If it's an atlas, I suppose a notation to reference in the back of the book would suffice.

As for a children's atlas, honestly that's probubly the best way to explain the situation to someone without some political theory under their belt.

If I'm not mistaken the majority of Muslim countries recognize all of Israel as Palestine. As such the territories mentioned within the state of Israel are part of Palestine.

Basically each individual government, person or organization can choose to accept any idea of Israel/Palestine as fact. The concept of a nation in that sense is entirely arbitrary and there is no 'correct' way unless you're representing a specific country/organization's view - as Helmethead pointed out. An Israeli map would never identify Palestinian territories as independantly governed. An Iranian map would identify Israel as Palestine. A Russian/Serbian map won't recognize Kosovo...

I also believe that most 'neutral' observers identify Israel as the nation but also consider the geographical and political divides worth noting. Not as a separate nation but essential to really understand the political geography of the region.

A children's Atlas simply needs to be a quick reference point and really doesn't need to explain who recognizes Israel as Palestine and who doesn't. I'm also guessing adult oriented Atlas would be detailed enough that it would obviously be neccessary to draw the political lines between Gaza/Israel/West Bank.

What does it say about the Golan Heights?

It's ultra-simple: Just outline the disputed area with dotted line, fill it with a different color, label it "Disputed Area", and have a brief explanation somewhere else in the atlas, like in the atlas' appendix.

The Golan is unmentioned. I believe the Golan would fall into the same category as South Ossetia...occupied by an outside force but not recognized by anyone other than the occupier Tmaybe a couple of others is the South Ossetia case.