The overall purpose of this study is to assess the extent to which the Palestinian approach to state-building (under occupation), as envisaged by the Palestinian Authority in general and the Fayyad Plan in particular, contributed to achieving Palestinian statehood. The thesis uses the Westphalian-Weberian model of the state as its primary theoretical framework to point to the challenges that state-building faces in the absence of territorial sovereignty. It provides a historical re-analysis of the context within which the trajectory of Palestinian state-building was formed and implemented. During the past two years, 70 semi-structured interviews were conducted with primary actors who played a crucial role in the negotiation of the Oslo Agreements including veteran Palestinian and Israeli politicians, Palestinian Authority officials, foreign diplomats, international development actors as well as Palestinian social scientists and political activists. Secondary data used draws on an extensive review of literature on statehood and theories of post-conflict state-building, historical documents and historical accounts of the Palestinian-Israeli conflict, Palestinian Authority national development plans and analytical studies and articles published in Palestinian, Israeli and international journals, newspapers and by think tanks. An analysis of the Palestinian case argues that post-conflict state-building theories are insufficient to understand the particularities of the case and points to the need for a new theoretical framework that can better explain the nature of the Palestinian Self-Governing Authority. Not only does the analysis conclude that the assumption of state-building under occupation is flawed, since both concepts are inherently antithetical, but also that the presumed state-building endeavour was based on a flawed assumption: namely, that a de facto Palestinian state would emerge from within the Oslo Agreements and UNSC Resolution 242, none of which promises an independent Palestinian state. Therefore, the question emerges for the reason for Palestinian state-building in the first place.