How does Israeli capitalism’s need for cheap, exploitable labor conflict with the state’s settler-colonial drive to create a homogenous ethno-state? Much of current scholarship on the history and nature of settler colonialism has tended to emphasize the “eliminationist” nature of settler-colonial projects, arguing that, whereas extractive colonial regimes have sought to control and exploit a captive colonial labor force, settler-colonial regimes have sought to eliminate and replace indigenous populations, freeing up land for settler occupation and labor. The experiences of the Palestinian citizens of Israel from the village of Jisr al-Zarqa complicate this neat typology, forcing us to re-consider our understanding of the relationship between capitalism and colonialism in settler-colonial contexts. Jisr al-Zarqa is the last remaining Palestinian fishing village within the Israeli state. Its survival is no accident: while the Alexandroni brigade was systematically ethnically cleansing the central Israeli coastline between Tel Aviv and Haifa, the leaders of the Jewish Zichron Yaakov settlement intervened to spare Jisr al-Zarqa and the nearby village of Fureidis from destruction. This was done not out of mere sympathetic altruism but to preserve the availability of low wage village laborers for settler capital. These laborers had both drained the nearby swamps in the early twentieth century (freeing up land for Jewish agricultural settlements) and provided necessary labor in settler farms. While the land surrounding Jisr al-Zarqa – once populated by other Palestinian villages – has been converted into wealthy Jewish kibbutzim and suburbs, the village itself remains one of the poorest municipalities in the country, with villagers continuing to play a dependent economic role for nearby Jewish communities as custodians, clerks, line chefs, sanitation workers, security guards, and other forms of precarious labor. My paper analyzes how these villagers’ lives have been shaped by the intersection between the Israeli state’s imperative for ethno-nationalist exclusion and the Israeli economy’s imperative for racial capitalist labor exploitation. I draw on a combination of archival research, oral history interviews, ethnographic observations, and political-economic mapping of Jisr al-Zarqa and the surrounding areas gathered during seventeen months of dissertation fieldwork between 2021 and 2023. I argue for more class-based analyses of Palestinian life within Israeli society in order for us to better understand not only how Palestinians are economically exploited under Israeli settler-colonialism but also how, given this exploitation, they continue to survive and strive for improved rights and living conditions.