There are 121 Palestinian municipalities: 96 in the Wes Bank, and 25 in Gaza. These exclude the UNRWA-administered refugee camps which instead have service committees.
Municipalities were once controlled and used by Israel as a means of administering its occupation until the formation of the Palestinian Authority (PA) in 1994. In response to the election of nationalist Palestinian mayors close to the Palestine Liberation Organisation (PLO) in 1976, Israel created what was known as the “Village Leagues”. This allowed Israel to administer the OPT through proxies that it appointed. Leaders and members of these groups were largely seen as traitors by the Palestinian population and became a target for assassinations during the First Intifada.
After the PA’s establishment, municipal elections became a significant arena for Palestinian political development. Municipal elections were held in 2004-05 in both the West Bank and Gaza – the first since 1976, and the first under the PA. Voting mostly followed party lines, but in some cases family and tribal relations also played a role. The second municipal elections were held only in the West Bank in 2012 without Hamas participation. The third municipal elections in 2017 – again held exclusively in the West Bank – saw lower participation and a shift away from factional politics. They highlighted internal divisions within Palestinian politics given the non-participation of Palestinian factions such as Hamas, the Popular Front for the Liberation of Palestine (PFLP), and Fatah-aligned supporters of Mohammed Dahlan.
Hamas boycotted PA elections until 2005, when it participated and had great success in that year's municipal elections. But Hamas boycotted the 2017 municipal elections after the Supreme Court ruled that the Hamas-backed court system in Gaza did not have jurisdiction to rule on electoral matters – a crucial element in ensuring Hamas buy-in and prompting accusations that Abbas had ignored agreements reached by Palestinian factions in Beirut in January 2017.
Municipalities fall under the authority of the PA's Ministry of Local Government and are primarily regulated by the 1997 Local Authorities Law, the 2008 Law by Decree No. 9, and the 2016 Law by Decree No. 8. While they are granted a degree of autonomy they are highly dependent on the PA central government for the bulk of their budget. It is the municipalities, rather than the PA, that is responsible for the provision of local electricity. As a 2010 French government report notes:
"The municipalities buy their electricity from the Israeli monopoly electric company, Israel Electric Corporation (IEC), except in Jericho. But they do not always have the means (or do not always show a desire) to pay their bills. In this case, the IEC does not cut off energy deliveries. Instead, it has the Israeli authorities deduct the unpaid amounts from the sums paid to the Palestinian Authority for the value added tax (VAT) and customs tariffs. In the West Bank, 80% of non-payment comes from the late payments of seven municipalities, including Nablus and Hebron. This situation generates inequalities between local governments. The Palestinian Authority has not yet managed to recover the full amount that the municipalities owe the IEC. It nevertheless attempts to replenish its coffers by blocking the transfers of funds to the municipalities that it is supposed to make under the 1997 law."