This study is designed to research on the role of Islamic Fundamentalism in the conflict between Palestine and Israel from the establishment of Israel in 1945 to the Agreement of Wye River. In Chapter I , the purpose of this study is presented with some explanation of Intifada, the Road Map of Peace Process in the Israeli-Palestinian conflict, and the possibilities of a peaceful settlement between Palestinians and Israelis. This study is deeply concerned with the establishment of the Palestinian independent state and the nature of Islamic Fundamentalism in Israel. In Chapter II, the theory of formation of Islamic Fundamentalism and its application is described. The theories of Marty, Appleby, John L. Esposito, Daniel Pipes, John Obert Vol], John Obert Vol], and Gilles Keppel are presented. Marty and Appleby presented crisis theory. John L. Esposito and Daniel Pipes presented success theory. John Obert Vol] and Gilles Keppel presented evolution theory. But it is almost impossible to adopt only one theory to explain Islamic Fundamentalism. So it is important to understand exactly on the various movements of Islamic Fundamentalism and to analyse the Islamic Fundamentalism on the basis of evolution theory. In Chapter III, the history of the Israeli-Palestinian conflict and its background is presented. The history of the Jews in Europe, the emergence of political Zionism, the Balfour declaration, the Mandate for Palestine, British Administration, the Jew`s immigration, the Jewish community in the World War I and II and the birth of the State of Israel were described. In Chapter N, the activities of the Islamic Fundamentalism in Palestine are presented. The history of the Islamic Fundamentalism in Palestine, its process, the Intifada in 1987 and 1991, the internal competition and cooperation of the Islamic groups in Palestine, and their pragmatic attitude to establish the independent state of Palestine were mentioned. In Chapter V, the nature of Islamic Fundamentalism in Israel ie presented. It contains the political environments of Israel, historical background of Islamic Fundamentalism in Israel, the formation of the Duruzs, its activities, the Islamic movements in 1970s - 1990s, the attitude on the Israeli-Palestinian conflict, and their pragmatic line(the acceptance of a two-state solution). In conclusion, it is said that the pragmatic line to solve the Israeli-Palestinian conflict peacefully is witnessed both in the Islamic Fundamentalism in Palestine and in Israel. The Arab-Israeli peace process will influence the development of the Islamic Fundamentalism in Palestine and Israel. The main trend in the Islamic Fundamentalism in Palestine and in Israel will be characterized by pragmatism. And the birth of the independent state of Palestine might result in the weakening of the radical Islamic movements in Palestine and Israel.