The State of Israel not only doesn’t include all of Eretz Yisroel, of course, as parts of Eretz Yisroel is in Lebanon, Jordan, Syria and Egypt, but the State of Israel also includes part of chutz la’aretz, for example Eilat.
What this all amounts to is that the State of Israel, the Hashemite Kingdom of Jordan and the Lebanese Republic all have the same status and category. All three have some parts of Eretz Yisroel and all three have some parts of chutz la’aretz.
People can live in Eretz Yisroel in Lebanon or Jordan and other people can live in chutz la’aretz in the State of Israel.