Form value not submitting for a function called from ajax

I have created a form for creating some beaches. In that I have to give the value of continents,country ,name of beaches. Names of the countries and continent are stored in the taxonomy table. so if the user selects the continets, by using ajax it displays the list of countries belonging to the continent. my code look like..

function iks_beaches_create($node, &$form_state) {


drupal_set_breadcrumb(array(
    l('beaches', 'beaches'),
    'Add New Beaches'
));   
    $form['iks_beaches_continents'] = array(
    '#title' => 'Continents',
    '#description' => 'Taxonomy vocabulary defining Continents',
    '#type' => 'select',
    '#options' => iks_beaches_getTerms(variable_get(IKITESURF_BEACHES_CONTINENT, '')),
    '#required' => true,
    '#ajax' => array(
    'callback' => 'countryDisplay',
    'wrapper' => 'countryDisplay',
    'event' => 'change',
     ),
     );
    $form['countryDisplay']['iks_beaches_country']= array(
     '#type' => 'select',
     '#options' =>iks_beaches_getTerms(variable_get(IKITESURF_BEACHES_REGIONS, '')),
     '#title' => 'Country',
     '#required' => true,
     '#description' => 'Taxonomy vocabulary defining Country',
     );
     $form['regionDisplay']['iks_beaches_regions'] = array(
     '#title' => 'Regions',
     '#description' => 'Taxonomy vocabulary defining Regions',
     '#type' => 'select',
     '#options' => iks_beaches_getTerms(variable_get(IKITESURF_BEACHES_REGIONS, '')),
     '#required' => true,
     );

     $form['countryDisplay'] = array(
     '#type' => 'markup',
     '#prefix' => '<div id="countryDisplay">',
     '#suffix' => '</div>',
     );

the corresponding ajax function is

 function countryDisplay($form, &$form_state){
    $city = isset($form_state['values']['iks_beaches_continents']) ?        $form_state['values']['iks_beaches_continents'] : 'default';
    $query = new EntityFieldQuery();
    $entities = $query->entityCondition('entity_type', 'taxonomy_term')
                      ->propertyCondition('vid', variable_get('iks_beaches_countries'))
                      ->fieldCondition('field_continent', 'tid', $city)
                      ->execute();
    if(isset($entities['taxonomy_term']) && count($entities['taxonomy_term'])) {
    $countries = taxonomy_term_load_multiple(array_keys($entities['taxonomy_term']));       
    foreach($countries as $coutry){
   $options[$coutry->tid]=$coutry->name;
   }       
    }
    $form['countryDisplay']['iks_beaches_country'] = array(
         '#type' => 'select',
         '#options' => $options,
         '#title' => 'Country',
         '#required' => true,
         '#description' => 'Taxonomy vocabulary defining Country',        
        );
return  $form['countryDisplay'];
}

But countries value is not displaying on form submit

function iks_beaches_create_submit($form, &$form_state) {
echo "<pre>";print_r($form_state['values']);echo "</pre>";exit; }

Array
(
    [iks_beaches_continents] => 673
    [iks_beaches_regions] => 783
    [location_name] => hdnffgh 
    [description_location] => fgdh fgh fg hrt yry bnmbv mbcsd rty
    [travelling_details] => fh ty vcrsw t ytrywswe5
    [location_facilities] => ry  yuf d sdaf sa warewe svbvcber
    [tags] => e
    [longtitude] => 23.536343
    [latitude] => 45
    [images0] => 13803
    [images1] => 0
    [images2] => 0
    [images3] => 0
    [images4] => 0
    [images5] => 0
    [images6] => 0
    [images7] => 0
    [images8] => 0
    [images9] => 0
    [submit] => Publish Beach
    [form_build_id] => form-ZpuHlTPwSjJ2ElN_nPlSTsmHdQC6mmvSyKQOfMy4xvM
    [form_token] => n6vBuvZLJJNdcjdYERIsOm2REge8JoJMOSMmEuzpom8
    [form_id] => iks_beaches_create
    [op] => Publish Beach
)