Since the establishment of the Palestinian National Authority in 1994 on parts of the West Bank and Gaza, considerable developmental efforts have been observed. New neighbourhoods have evolved in order to cope with lifting the zoning restrictions put previously for decades by the Israeli occupation authorities, overcome the shortage in dwelling stock, and satisfy the demand for providing residential space for citizens and hundreds of thousands of Palestinian returnees from abroad. In the emerging State of Palestine, there are considerable limitations of land that could be used for development, scarcity of energy, water, and material resources, in addition the environmental pollution, persistent economic challenges, and new lifestyle trends. These factors need to be considered in planning and developing of the neighbourhoods. This paper aims to identify the strategic framework that will guide the efforts that will assist in achieving the goal of having sustainable neighbourhoods in Palestine. Sample regional and international sustainable neighbourhood planning and development efforts have been investigated. Strategic planning approaches have been utilized as related to neighbourhood development in Palestine, where SWOT analysis has been conducted to derive the strengths and weaknesses, as well the opportunities and threats, in order to lay the foundation to identify the most important issues that should be tackled in the strategic framework. Moreover, the focus group approach has been adopted and case study has been conducted in order to evaluate the ability of the stakeholders to set policies, plan, design, and implement sustainable neighbourhoods. Consequently, the strategic goals and objectives and the strategic framework highlighting the strategies and actions that need to be implemented over the medium term, whether related to setting policies, regulations, planning guidelines, and design standards, are set, where responsibilities have been proposed. The resulting strategic planning framework would guide the efforts to realize sustainable neighbourhoods in Palestine.