The State of Chile has always and consistently supported the right of the Palestinian people to establish itself as an independent state coexisting in peace with the State of Israel. It has also fully endorsed the right of Israel to exist within secure and internationally recognized borders.It says nothing about the borders of the state.
Chile was heavily lobbied by its large Palestinian Christian community to recognize "Palestine" on the other side of the Green Line - and it evidently refused, instead echoing the wording of UN Security Council Resolution 242 which imply that the 1949 armistice lines are not going to be the final borders of Israel.