We empirically address the determinants of R&D performance in Palestinian R&D institutions using ordinary least square (OLS) regression analysis. The R&D performance index is measured by a set of indicators like number of research studies, patents, prizes from national and international bodies. The results show that the number of technicians holding a Ph.D. degree is one of the most important determinants of R&D outcomes measured by the number of research studies. We found that the increase in the number of researchers with a master degree will negatively impact the research outcomes. One of the important results is that part-time researchers (researchers with 51% to 70% full-time equivalent) have better research performance than full-time researchers (number of researchers with 91-100% full-time equivalent). Meanwhile, we find very weak performace of R&D sector in regards with patents, national and international prizes. We found that the funding mechanism for R&D in Palestine to be inefficient; neither of the research fund sources have a significant impact on the number of basic, applied and experimental research studies. Finally, we discovered no crowding-out effect from government funding and funds from NGOs to private investment. Meanwhile, we found that funding from higher education institutes motivates private investment in R&D.