The Islamic Republic of Iran officially endorses the creation of a Palestinian state, regarding Palestine as a state. Ayatollah Khamenei, the Supreme Leader of Iran, rejects a two-state solution and implies that Palestine is inseparable, while Iran's former President Mahmoud Ahmadinejad called for a free referendum for the entire Palestinian population, including Arab citizens of Israel, to determine the type of government in the future Palestinian state, while reiterating that establishment of a Palestinian state alongside Israel would "never mean an endorsement of the Israeli occupation".
Prior to the 1979 Iranian Revolution, the Palestinian Liberation Organization (PLO) held close ties with Iranian opposition groups. Following the revolution, Iran ended its alliance with Israel and started supporting the Palestinians, symbolized by turning over the Israeli embassy in Tehran to the Palestine Liberation Organization.
Iran was the first majority Muslim nation to grant (de facto) recognition of Israel, under the rule of Shah Mohammed Reza Pahlavi.
Before the 1979 Revolution, Iran and Palestine purportedly engaged in secret trade and military relations, unbeknown to Israel. Iran provided the Palestinian Liberation Organization with arms to combat Israeli forces in occupied territories. However, as Iran also maintained clandestine relations with Israel at the time, it had to keep its alliance with Palestine a secret from Israel, and its relations with Israel a secret from Palestine. During the 1967 war, Iran provided Palestinian militants with funds and ammunition. However, Palestine, as well as the Arab states, lost the war, and Palestinians asked to seek asylum into Iran. Iran, not intending to mar its relations with Israel, chose not to provide the Palestinian refugees with shelter. [References needed]
The PLO backed the 1979 revolution, and several days after the revolution, PLO chief Yasser Arafat led a Palestinian delegation to Iran. The Palestinian delegates were publicly welcomed, and symbolically handed the keys to the former Israeli embassy in Tehran, which later became a Palestinian embassy.
After the eruption of the second Palestinian intifada, in September 2000 after the collapse of Middle East peace talks at Camp David, Arafat released imprisoned Hamas and Islamic Jihad militants, a decision that restored the relations between Iran and the Palestinian National Authority. The renewed support became evident when Israeli commandos captured the Karine A in 2002, a ship carrying 50 tons of advanced weaponry from Iran to Gaza.
Hamas is a militant and political organization currently in power in the Gaza Strip. According to Mahmoud Abbas, President of the Palestinian National Authority, "Hamas is funded by Iran. It claims it is financed by donations, but the donations are nothing like what it receives from Iran. Iran also supplies Hamas with military weaponry. Technologies provided include Fajr-5, M-75, and M-302 rockets, as well as drones.
Aid to Hamas increased after Arafat’s death in 2004 and Israel’s withdrawal from Gaza in 2005. Following the Hamas victory in the 2006 Palestinian elections, foreign aid dried up, leading Tehran to send significant financial aid to support the nearly bankrupt, Hamas led Palestinian National Authority.
In July 2015, a senior Hamas official reported that the organization was no longer receiving aid from Iran, possibly due to Hamas's support for the rebels in the Syrian Civil War, as well as its improving relations with Saudi Arabia.
Palestinian Authority spokesman Nabil Abu Rudaineh has said of former Iranian President Mahmoud Ahmadinejad that "The one who does not represent the Iranian people, who falsified election results, who oppressed the Iranian people and stole authority has no right to speak about Palestine, its president or its representatives".
In September 2010, former Iranian President Mahmoud Ahmadinejad said that the peace talks in Washington would not achieve their goals, because Hamas is the true representative of the Palestinian people, among other reasons. PA officials responded to these Iranian statements with "unprecedented ferocity". Omar Al-Ghoul replied that the time had come to put an end to Iran's "regime of death and destruction." Fatah spokesman Osama Al-Qawasmi said that Iran is striving to divide Palestine, to spark civil wars and sectarian and ethnic strife in numerous Arab regions, and therefore it cannot benefit the Palestinian people.