"When they reached the threshing floor of Atad, near the Jordan, they lamented loudly and bitterly; and there Joseph observed a seven-day period of mourning for his father. When the Canaanites saw the mourning at the threshing floor of Atad, they said, 'The Egyptians are holding a solemn ceremony of mourning.' That is why that place near the Jordan is called Abel Mizraim.
So Jacob's sons did as he had commanded them: They carried him to the land of Canaan and buried him in the cave in the field of Machpelah, near Mamre, which Abraham had bought as a burial place from Ephron the Hittite, along with the field. After burying his father, Joseph returned to Egypt, together with his brothers and all the others who had gone with him to bury his father." (Genesis 50:10-14 NIV)
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The threshing floor of Atad was probably the largest cleared open area where the company who were accompanying Joseph could assemble together. The Canaanites who observed this seven-day period of mourning thought it was a group of Egyptians which had assembled nearby. That's why they called the place Abel Mizraim ('mourning of the Egyptians').
This is not surprising. No doubt most of the party were dressed in the Egyptian style of clothing, including Joseph, who had continued to work as Pharaoh's prime minister, and would have had to dress in a manner appropriate to his role. The Egyptian dignitaries likewise would be similarly dressed.
Joseph's brothers and relatives, living somewhat apart in Goshen, may have been dressed in more distinctively Hebrew attire, but the attention of the surrounding Canaanites was probably mostly focused upon the insignia of the Egyptian chariots and horsemen who accompanied the party. You can be sure that these Canaanites had noticed the chariots and the horsemen dressed in Egyptian garb and wondered why they had arrived in their territory. I imagine that they were somewhat relieved to see that the soldiers were only there to protect the mourners.
I do not know if professional mourners had been sent along as well, but if they were, the mourning was done in a dignified manner, for the observers noted that although these 'Egyptians' mourned loudly and bitterly, it was a solemn occasion (v.11). The Canaanites must have been duly impressed with these happenings, for they named the area Abel Mizraim -- 'mourning of the Egyptians'. How they must have wondered about who was being buried! Who was this great man who was being laid to rest in the cave of Machpelah?
I think Jacob himself would have been somewhat surprised at all the fuss. He may have smiled to see that although his own years did not attain to the same duration as his father and grandfather -- Isaac and Abraham, who live to be 180 and 175 -- (see Genesis 47:9), his name would forever be linked with theirs as followers of the true God, the God of Abraham, Isaac and Jacob. Jacob had changed dramatically over the years, but God had not: He was for Jacob what He had promised to be for Abraham in Genesis 15:1(NIV) -- "...I am your shield, your very great reward."