This paper aims at studying the changes in labor market demand for different educational attainment levels during Al-Aqsa Intifada, on the basis of the PCBS Labor Survey results. To cover all aspects of analysis, three different analysis methods were used. The first was based on a descriptive analysis. The second was based on the calculation of the rates of return on education through linking the wage levels with unemployment. And the third focused on the utilization of the Dynamic Probit Model to examine the probability for unemployment during the Intifada for four educational attainment levels. The results showed that educational attainment has a key role to play in reducing unemployment, and that the Palestinian Labor market is saturated with persons with low educational attainment.