An important political and economic reality of the Israeli occupation of the West Bank is the employment of Palestinians by Israelis (individually or through Israeli-owned corporations), within the Israeli settlements and outside them. Despite their legal status as foreign territory, the settlements and their adjacent industrial areas are socially and politically perceived by many Israelis as incorporated within Israel. Consequently, employment relations maintained in the settlements are regarded largely as an intra-Israeli matter insofar as concerns Israelis, with the presence of Palestinian parties constituting a foreign element, even though legally, the situation is the exact converse. This chapter explores the juxtaposition of different areas of law which regulate this reality, namely labor law, international law and conflict of laws. We demonstrate how it gradually emerging erects a jurisprudential Wall between Israelis and Palestinians in the West Bank. The chapter traces the evolution of Israeli jurisprudence on the terms of employment of Palestinians working in Israeli settlements and their adjacent industrial zones, focusing on the Israeli High Court of Justice’s Workers’ Hotline ruling of 2007 and its aftermath. In Workers’ Hotline, the Court attempted to give legal expression to the social reality according to which the settlements are part of Israel, by refusing to attach weight to the difference in nationality between employees, and applying to all of them the same legal order, the Israeli one. However, in doing so it disregarded the economic incentives which underlie the employment of Palestinians by Israelis. The sustainability of the Court’s ruling was therefore subsequently challenged through diverse legal constructs. This chapter traces the evolution of the 2007 ruling in the practice of employers and other economic actors and in related jurisprudence, and examines its ramifications. We suggest that the interpretation and application of the 2007 ruling by relevant actors, as it has been confirmed in subsequent decisions of the lower labor tribunals, has followed the letter of Workers’ Hotline but at times diverged so greatly from the latter’s spirit, that it may pave the way to results that are the opposite of the approach which the HCJ was advocating.