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The economy of the Palestinian Territories (PT) is small, poorly developed, and highly dependent on Israel; at the same time, the land is limited, Israel controls 80‐85 per cent of the Palestinian water, and there is large‐scale unemployment. Faced with this situation, small and micro‐enterprises have come to play a critical role in the economy of the PT. Donors, the Palestinian Authority (PA), and UNRWA have recognised that many of the managers suffer from managerial weaknesses, and training is one of the long‐term keys to promote the development of small and micro‐enterprises and alleviate the problem of persistent unemployment in the PT. To support the peace agreement, the International Community promised to support the Palestinian economy. Part of this aid has been spent for small and micro‐enterprise development, and for establishing managerial training programmes. These programmes aim to encourage economic development of the PT, through supporting small business education and entrepreneurship training. These programmes suffered from various problems, such as lack of professional trainers, the majority of the managers did not attend the training programme courses, some of these programmesmissed funding. Therefore, some training programmes were closed during the last two years. On the other hand, the managers of small businesses still suffer from various managerial problems. However, this article presents a description of the current situation in PT. Especially, the economic and managerial situation, particularly for the SMEs and TPs in the PT.