What is occupied Palestine?
Israel has three different governments in its territory. There is sovereign State of Israel territory, there is sovereign Palestinian Auhtouty territory, and there are co-administered territories.
Because Israel is responsible for security in co-administered areas by the Palestinian Authority is not, these are called the occupied territories in reference to the presence of Israeli security rather than Palestinain security.
Also, although Israelis (whether Jewish or non-Jewish) are extradited to the Israeli civil court system in cases of arrest, non-Isrealis are tried in-place using a court system administered by a department of the Israeli military. However, in the sovereign Palestinian territories, there is of course an independent court system.