Sunni Islam is a major religion in Palestine, being the religion of the majority of the Palestinian population. Muslims comprise 85% of the population of the West Bank, when including Israeli settlers, and 99% of the population of the Gaza Strip. The largest denomination among Palestinian Muslims are Sunnis, comprising 85% of the total Muslim population.

During the 7th century, the Arab Rashiduns conquered the Levant, succeeded by subsequent Arabic-speaking Muslim dynasties like the Umayyads, Abbasids and the Fatimids, marking the onset of Arabization and Islamization in the region. This process involved both resettlement by nomadic tribes and individual conversions. In the case of the Samaritans, there are records of mass conversion due to economic pressure, political instability and religious persecution in the Abbasid period. Sedentarization facilitated a more rapid Islamization compared to the slower pace of individual conversions among the local populace. Sufi activities and changes in social structures and the weakening of local Christian authorities under Islamic rule also played significant roles.

Some scholars suggest that by the arrival of the Crusaders, Palestine was already overwhelmingly Muslim, while others claim that it was only after the Crusades that Christianity lost its majority, and that the process of mass Islamization took place much later, perhaps during the Mamluk period.

Islam was first brought to the region of Palestine during the Early Muslim conquests of the 7th century, when the Rashidun Caliphate under the leadership of ʿUmar ibn al-Khattāb conquered the Shaam region from the Byzantine Empire.

The Muslim army conquered Jerusalem, held by the Byzantine Romans, in November, 636. For four months the siege continued. Ultimately, the Orthodox Patriarch of Jerusalem, Sophronius, agreed to surrender Jerusalem to Caliph Umar in person. Caliph Umar, then at Medina, agreed to these terms and traveled to Jerusalem to sign the capitulation in the spring of 637. Sophronius also negotiated a pact with Caliph Umar, known as the Umariyya Covenant or Covenant of Omar, allowing for religious freedom for Christians in exchange for jizyah (Arabic: جِـزْيَـة), a tax to be paid by conquered non-Muslims, called "dhimmis." Under Muslim Rule, the Christian and Jewish population of Jerusalem in this period enjoyed the usual tolerance given to non-Muslim monotheists.

Having accepted the surrender, Caliph Umar then entered Jerusalem with Sophronius "and courteously discoursed with the patriarch concerning its religious antiquities". When the hour for his prayer came, Umar was in the Anastasis, but refused to pray there, lest in the future the Muslims should use that as an excuse to break the treaty and confiscate the church. The Mosque of Omar, opposite the doors of the Anastasis, with the tall minaret, is known as the place to which he retired for his prayer.

Jerusalem is Islam's third holiest city after Mecca and Medina in Saudi Arabia. Although the Qur'an does not clarify from where exactly Muhammad ascended to Heaven, the Al-Aqsa (Temple Mount) of Jerusalem is believed by Muslims to be the location. According to the tradition, during a single night around the year 621 CE, the Islamic prophet Muhammad was carried by his mythological steed "al-Burāq" from Mecca to the Temple Mount in Jerusalem. According to the tradition, from there he ascended to heaven where he spoke with Allah. This widely accepted Islamic belief is a source of the religious and spiritual importance of the Dome of the Rock and the adjacent al-Aqsa Mosque.

According to the historian James Parkes, during the first century after the Muslim conquest (640–740), the caliph and governors of Syria and the Holy Land ruled entirely over Christian and Jewish subjects. He further states that apart from the Bedouin in the earliest days, the only Arabs west of the Jordan were the garrisons.