Palestine is passing through a transition period. Palestinians are in a need to build their national systems based on innovative basis. Palestine’s innovation system is still underdeveloped and not working efficiently. The innovation system still suffers from weak components and a lack of coordination and managed links between its components. In order to build a national innovation system in Palestine, there is a need to be opened up to global knowledge, imported massively capital goods and components, reform of universities and R&D organizations, establishing an incubation system at universities, induced FDI to set up large domestic research facilities, encourage expatriate scientists set up high tech industries, focus on premier universities as key knowledge institutions, learn from past policies/ review reports, consult with private sector, scientists, government officials and economists, develop human resource, up-grad R&D Infrastructure, and restructuring of R&D Institutions, promote ICT, and build knowledge network.