Over the past two decades, state-building has developed into becoming an integral and even a specific approach to peacebuilding based on the dimension of security, politics and economy. The state-building approach has been the preferred strategy in a number of high-profile conflicts and although there is no universally accepted blueprint there is a great deal of converge around the idea of a liberal state-building strategy based on the principles of democracy, economic development and good governance. The aim of this thesis is to find an answer to how state-building can be used as a tool for peacebuilding. By performing a case study of the Norwegian contribution in building a Palestinian state, I exemplify how state-building has been conducted in a society that is still in conflict. State-building as an approach to peacebuilding functions as a conceptual framework for the empirical analysis of Norway s effort to building a Palestinian state in the years after the signing of the Oslo Accords, emphasizing the years after the second intifada. The research presented in this thesis is based on elite interviews with central Norwegian actors, written primary and secondary sources in the form of official documents and statements in addition to former research. The case of Palestine demonstrates that while international assistance can have both positive and negative effects, many of the positive effects of the state-building project has proven to be volatile and unsustainable as little has been done to address the fundamental obstacles for a sustainable Palestinian state. This thesis outline serious objections to the theory and politics that presents state-building as central- and crucial- to peacebuilding. I argue that the Palestinian state-in-the-making has been a technocratic success but a political failure and that in the absence of a peace agreement, the Palestinian state-building project has contributed to establishing an inherently deteriorating status quo that it cannot maintain, let alone reverse. I further argue that the blueprint framework should be revised, as this strategy can have fatal consequences if progress in the state-building effort leads the international community to overlook, or avoid, confronting the underlying long-term problems, especially in the case of a society still in conflict.