This study investigates the factors driving low labour force participation (LFP) rates among Palestinian-Arab women in Israel relative to Jewish women, despite the recent increase in educational attainment among this group. We focus on five factors that could explain this pattern: (i) socioeconomic and demographic factors such as age, education, and marital status (ii) level of religiosity of the woman and her family, (iii) Human Capital Assets such as use of a computer, (iv) family structure and related public policies, and (v) the early retirement of Palestinian-Arab women from the labour market. We find that all five of these factors affect the probability of Palestinian-Arab women participating in the labour market. We conclude by discussing the implications of our findings for labour market policies.