This paper analyzes the relationship between Palestinian suicide bombings and economic and political conditions. Labor market conditions can affect the frequency of attacks because when the economy worsens, the opportunity cost of being a terrorist decreases. An alternative explanation is that suicide bombings are responses to changes in the political environment. This paper examines these alternative explanations by estimating count data regression models of the occurrence of Palestinian terrorist attacks from 1993 to 2004. Contrary to the previous literature, this paper finds that economic conditions are correlated with suicide terrorism. Specifically, deteriorating local labor market conditions during the al-Aqsa Intifada account for nearly half of the increase in suicide bombings during that time.