Although the stele is significant for being a non-biblical reference to King David, it is not indisputable evidence that he existed. In The New York Times, Dr. Jack M. Sasson, a former religious studies professor at UNC-Chapel Hill, argued David may still only be a mythical ancestor for those who created the stele, a figure they used to legitimize their rule.I haven't seen the NYT article, but, yes, this is possible. Also, if there was an actual King David, which is how I think I would bet, it does not necessarily follow that the stories about him in the Deuteronmistic History have much basis in fact. Maybe, but we have too little information and too few external controls in our data to know.
Background on the Tel Dan Stele, a fragmentary Aramaic inscription from roughly the late ninth century, see here and links. It is currenly on display at the Jewish Museum in New York.
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