The Egyptians are stressing that they are not going to go through Israel to get to the match and are not getting any Israeli visas. They want to help the morale of the Palestinian Arabs and make them feel less isolated.
The article mentions that this is the first meeting between the two teams since a match in Jerusalem in 1934, in a World Cup qualifying match, where Egypt beat Palestine 4-1.Here is the Palestine Post account of that game. It seems that it wasn't in Jerusalem, but in Tel Aviv, at the stadium used by the Hapoel Zionist team. Could it be that the players in that earlier game were - gasp - Jewish?
In fact, it appears that there were other games between the Egyptians and the Zionists in the 1930s. In this game later that year, the Alexandria team lost to Hapoel (note the names of the players at the end of the article, click to enlarge:)
And Hapoel met the Egyptian team in 1935 as well, as this article says that Egyptian football is what gave the impetus for Zionist teams to grow and compete. This article seems to imply that it these are the same teams that played in 1934:
There was even an earlier game, in 1933:
So, indeed, Egypt did play Palestine before in football. But the Palestine that they played has nothing to do with the "Palestine" team that they plan to meet later this month.
Now, why would Al Arabiya try to imply that Egypt played an Arab Palestinian team in 1934?