In 1936, in partial response to the ongoing Arab disturbances, the British appointed a royal commission led by Lord Peel, to recommend a solution to the problems in Palestine. The Peel Commission undertook extensive hearings to come up with a solution to the problem. After considerable deliberation, the commission recommended the partition of Palestine into a small Jewish and a larger Arab State. The commission posited that Jewish settlement had been beneficial for Palestine as a whole, and that the Jews had taken some of the most arid, unmanageable parts of Palestine and brought them to life.

The Jews of Palestine deliberated on whether to accept the plan, for the State being promised was much smaller than anything the Jews had envisioned. On the other hand, this was a concrete opportunity for a Jewish State. Most importantly, this new Jewish State would have control over its immigration policies, and would thus be able to ensure a homeland for the mass of European Jewry. With this last point in mind, the Jews reluctantly decided to accept the plan. The Arabs, on the other hand, categorically rejected it. The British initially promised to implement the plan, but soon backed off due to Arab pressure.

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