This paper is interested in presenting the status of rights of Palestinians working in Israeli settlements. Available reports suggest that these are subjected to discrimination, exploitation and human-rights violations both in terms of employment conditions and safety measures. In October 2007, the Israeli High Court ruled unanimously that Israeli labor laws applied equally to Israeli employers and their Palestinian West Bank workers. The decision signs a breakthrough for Palestinian workers, but raises questions with regards to the ruling’s enforcement and implications, given that Israeli settlements are illegal under international law. This paper argues that granting equal rights without discrimination based on nationality is an obligation for all states. Accordingly, it is inconceivable that we re-interpret international humanitarian law so as to allow the discrimination of local populations and the application of dual legal systems. Such a reinterpretation would lead to the system that was historically applied in several countries, i.e. “colonization,” and/or “apartheid,” and to the system that is currently applied in Israeli settlements.