The study aimed to evaluate the Palestinian financial policy in light of the transitional phase agreements and explain its impact on the Palestinian economic activity, by identifying the determinants of the foreign and internal financial policy represented: the Israeli measures, foreign aid, weak economic structure, fragility of financial resources, and high levels of deficit and debt The year. The Palestinian Authority suffers from a severe crisis in the Palestinian public finances, as the level of public debt in 2018 reached the equivalent of $ 2.6 billion, and arrears amounted to $ 3.2 billion, and the total fiscal deficit reached $ 1.8 billion. And it relies on financing the deficit from foreign aid, which declined as a result of Arab countries failing to fulfill their financial obligations and the retreat of aid from some donor countries. The inability of the Palestinian economy to self-finance itself as a result of the endless transitional phase agreements. Which threatens the continuation of the work of the Palestinian Authority and the possibility of declaring it bankrupt. The study concluded with a set of recommendations, including the necessity of introducing fiscal policy reform programs to increase its effectiveness in order to achieve its economic goals, taking into account the need to push towards increasing development and private expenditures in the economic infrastructure, and the importance of reformulating economic relations with the Israeli side in light of interim agreements.