Interesting post at Opinio Juris asking Does the Palestinian Authority Enjoy Sovereign Immunity? which points to Biton v. Palestinian Interim Self-Government Authority where the District Court had to address that very issue.
At what point is a governing authority of a territory sufficiently recognized as a state for it to enjoy immunity? If the Palestinian Authority is not a state why not? And if it is not a state what is it? The more comical (but nonetheless interesting) variation to this question is if the Palestinian Authority is not a state, is it an instrumentality of the state of Israel?
I'm not sure I'd say “comical” was the exact word, but these are interesting questions.
The court, incidentally, said the answer to the question, at this moment anyway, is “no sovereign immunity.” Which means in some cases the PA can be sued in US courts….