The purpose of this study is to examine the impact of the development of the health sector on economic growth in Palestine, through investigated the causality and co-integration relationships between health expenditure and GDP per capita. Data collected from the Palestinian Central Bureau of Statistics and The Ministry of health. Time series data has been taken on the above these variables for Palestinian ranging from 1997 to 2015. The impact of health on the GDP per capita is examined by using Co-integration, and Granger Causality techniques. The result of cointegration showed the existence of a long-term relationship between economic growth and spending on health. Granger casualty test indicate there only unidirectional relationship from economic growth to health expenditure in long and short run, but no casualty from health expenditure to economic growth, the study found the lack impact from health on economic growth. One of most important recommendations in this paper, increase investment in the health sector, by giving preliminary to spend more from GDP on health sector to enhance health situation in Palestine, and the government should also continue its leadership role in creating an enabling environment that encourages better investment in health by the private sector.