The new lefty government of Sweden recently decided to recognize the "state" of Palestine, despite the fact that this "state" has neither defined borders (they are subject to negotiations which are currently stalled),
Neither does Israel, by the same token.
nor a capital (they want Jerusalem which is the capital of Israel),
Jerusalem is
claimed by Israel as its capital, but most countries do
not recognise that claim, which is why you'll find almost all embassies in Tel Aviv. Even the US, one of Israel's closest allies, does not recognise its claim to Jerusalem as its capital and has its embassy in Tel Aviv.
nor any degree of sovereignty over most of the territory it claims.
That is true, but that has historically been the case for many countries. For example, the US recognised the Republic of China (i.e. Taiwan) as the sole legitimate government of all of China up until 1979, a full thirty 30s after its de facto sovereignity had been restricted to Taiwan.
But that is by far not the worst thing. A social democratic (i.e. the new ruling party) politician claims that
IS is a product of Mossad.
The mind boggles.
That is indeed a weird conspiracy theory, but you failed to mention two things to put this in context:
A) he's a city council member, not a politician of national profile.
B) he's been called out for it by members of his own party.
If we compare this with the conspiracy theories put forward by right-wing politicians (some of them with much higher profile), it's still sad but fairly unremarkable.