Drawing on empirical data from the two Palestinian Arab villages of Abu Ghosh and Umm al Fahem, this dissertation assesses the nature of relationship between the Israeli state and its Palestinian Arab citizens from a Gramscian perspective. In this respect, a particular emphasis is given to the analysis of impact of local socio-economic and political structures on the relationship between the villagers and Israeli state and dominant classes especially following a hegemonic crisis during post-al Aqsa Intifada. Based on Gramscian methodology and empirical data, it is concluded that hamula structures could act as an agent of hegemony in internalization and reproduction of of consent based Israeli hegemony. Conditions, dynamics and consequences of this agent-structure relationship is also assessed in detail.