By 1936 the increase in Jewish immigration and land acquisition, the growing power of Hajj Amin al Husayni, and general Arab frustration at the continuation of European rule, radicalized increasing numbers of Palestinian Arabs. Thus, in April 1936 an Arab attack on a Jewish bus led to a series of incidents that escalated into a major Palestinian rebellion. An Arab Higher Committee (AHC), a loose coalition of recently formed Arab political parties, was created. It declared a national strike in support of three basic demands: cessation of Jewish immigration, an end to all further land sales to the Jews, and the establishment of an Arab national government.

The intensity of the Palestinian Revolt, at a time when Britain was preparing for the possibility of another world war, led the British to reorient their policy in Palestine. As war with Germany became imminent, Britain's dependence on Middle Eastern oil, and therefore the need for Arab goodwill, loomed increasingly large in its strategic thinking. Jewish leverage in the Foreign Office, on the other hand, had waned; the pro-Zionists, Balfour and Samuels, had left the Foreign Office and the new administration was not inclined toward the Zionist position. Furthermore, the Jews had little choice but to support Britain against Nazi Germany. Thus, Britain's commitment to a Jewish homeland in Palestine dissipated, and the Mandate authorities pursued a policy of appeasement with respect to the Arabs.