Using recent data from three national-level surveys conducted in 1995, 2000, and 2004, we provide evidence that Palestinian fertility rates in the West Bank and Gaza Strip, historically among the highest in the world, began to slow especially in the West Bank, but stalled in Gaza during the recent Intifada. The TFR in the early 2000s was 4.6 per woman, down from 6.2 a decade earlier. However, most of the decline in Gaza’s fertility appears to have taken place during the early 1990s, before the onset of the second Intifada. In Gaza, the TFR decreased from 7.4 to 5.7 during the 1990s, but changed only slightly to 5.6 during the second Intifada period. Surprisingly, contraceptive prevalence has not changed during these years, and the transition to lower fertility was mainly due to changes in nuptiality. Demand for children remains high, although there is evidence of unmet need for contraception. The continuing conflict and worsening economic situation provide clues to the persistence of high fertility among Palestinian women.