The only Palestinian league close to being active in 2002 was the Gaza league which was active from 1998 up until the Intifada in 2000, unlike the West Bank league which was all but dead at the time.
So for the 2002 Arab Cup Winners Cup, Palestine was represented by "Al-Aqsa" which was essentialy the national team at the time(i.e made up of domestic players, mainly from Gaza) rather than a club. The reasons for this are obvious: 2002 was the height of the Intifada and the tournament was a good opportunity to give the players some exposure before the Pan Arab Cup later that year. Ramzi Saleh was in goal, Saeb Jendeya captained and Ziyad Al-Kord spearheaded the offense.
Heres a highlights clip from the teams only win of the tournament against Al-Mal'ab of Tunisia(with Ziyad Al Kords bicycle kick).