Try creating an account directly on the website
Instead of sign in click register and you should be able to create a new gamertag
I'm not really sure what could of caused the problem, maybe its the information you entered , maybe Xbox Live is not available in your area (i dont know where you're from)
As of december 2010 Xbox Live is available in the following countries:
If yours is not listed then I am sorry to say you cannot create an Xbox Live account
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