Objectives: Over the last 2 decades, the World Health Organization (WHO) has proposed a global strategy and initiatives to establish a Health Research System (HRS) focusing on Health Research Quality and Standardization (HRQS), Health Research Knowledge Transfer and Dissemination (HRKTD), and Health Research Translation and Utilization into Health Care Decisions and Policies (HRTUDP). Despite the increase in health research productivity over the past several decades, HRS Capacity (HRSC) in Palestine and in the Middle East and North Africa (MENA) region has rarely been objectively evaluated. This study aims at eliciting the perceptions of HRS performers in Palestine in order to understand the status of HRSC, identify gaps, and generate policies and solutions capable of strengthening HRSC in Palestine. Methods: Key informants from three sectors, namely government, academia, and local and international organizations, were selected purposively based on different sampling methods: criterion, critical case, snowball, and homogeneous sampling. Fifty-two in-depth interviews with key informants and a total of fifty-two individuals, participating in six focus groups, were conducted by the principal investigator in Palestine. Data were analyzed by using MAXQDA 12. Results: The overall pattern of the Palestinian HRSC is relatively weak. The key findings revealed that while HR productivity in Palestine is improving, HRQS is at an average level and quality guidelines are not followed due to paucity of understanding, policies, and resources. HRKTD is a central challenge with both a dearth of conceptualization of translational science and inadequate implementation. The factors related to inadequate HRKTD include lack of awareness on the part of the researchers, inadequate regulatory frameworks and mechanisms for both communication and collaboration between and among researchers and policy-makers and clinicians, and lack of availability of, and credibility in, systematized and reliable HR data. Despite the limited knowledge translation, in general, HRTUDP is not considered an essential decision-making methodology mainly due to the lack of interface between knowledge producers (researchers) and users (policymakers), understanding level, HR credibility and availability of applied research, and governance, resources, and political fluctuations. Recommendations to strengthen HRS in Palestine include: a consolidated research regulatory framework and an effective capacity strengthening strategy overseen by Palestinian authorities; the promotion of HRQS and concepts and practices of translational science; and, most importantly, the use of findings for evidence-based policies and practice. Conclusion: Strengthening HRSC is both an imperative step and an opportunity to improve the Palestinian health system and ensure it is based on research evidence and knowledge. Building a successful HRS characterized by capacities of high-quality research and well-disseminated and translated knowledge is a prerequisite to effective health systems and services. This can be achieved by political commitment to support such strengthening, a consolidated leadership and governance structure, and a strong operational capacity strengthening strategy.