Is it permissible (halal) for Palestinian Muslims to sign a peace treaty with Israel? Would this be legitimate according to Shariah? Nearly fifteen years ago, the leading Saudi scholar Bin Baz ('Abd al-'Aziz b. 'Abd-Allah b. Baz) (d. 1999) issued a famous fatwa affirming the permissibility of such a treaty. In response, the ever-prominent Egyptian jurist Yusuf al-Qaradawi issued a counter-fatwa proclaiming peace with Israel to be impermissible (haram). What followed was a back-and-forth debate that captured the attention of the Arab and Muslim world. Bin Baz would make his case by appealing to the concept of maslaha (public interest), the example of the Prophet at the Treaty of Hudaybiyyah, and the Qur'anic statement, "But if they incline toward peace, incline toward it as well, and put your trust in God" (8:61). Qaradawi would reject the maslaha and Hudaybiyyah arguments, and would respond with another Qur'anic commandment: "So [believers] do not lose heart and cry out for peace. It is you who have the upper hand: God is with you" (47:35). In the present paper, I shall examine each scholar's legal methodology, specific arguments, and assessment of the facts on the ground. I shall also situate this discourse in relation to classical and modern doctrines of Jihad, including those articulated by contemporary scholars of Islam, particularly Sherman A. Jackson (in his article "Jihad and the Modern World"). I shall demonstrate that while Bin Baz might have been the peacemaker of the two in this particular case, his "just war theory" - as presented in this debate and elsewhere - would be more likely to sustain the institution of aggressive Jihad (and the dar al-harb/dar al-islam worldview that undergirds it). Finally, I shall explore the implications of this debate for Shariah, the Arab-Israeli conflict, and global relations.