The mutation rate and genetic variability of hepatitis B virus (HBV) are crucial factors for efficient treatment and successful vaccination against HBV. Until today, genetic properties of this virus among the Palestinian population remain unknown. Therefore, we performed genetic analysis of the overlapping S and polymerase genes of HBV, isolated from 40 Palestinian patients' sera. All patients were HBsAg positive and presented with a viral load above 105 HBV genome copies/ml. The genotyping results of the S gene demonstrated that HBV D1 was detected in 90% of the samples representing the most prominent subgenotype among Palestinians carrying HBV. Various mutations existed within the S gene; in five patients four known escape mutations including the common G145R and D144E were found. Furthermore, a ratio of 4.25 of non-synonymous to synonymous mutations in the S gene indicated a strong selection pressure on the HBs antigen loops of HBV strains circulating in those Palestinian patients. Although all patients were treatment-naïve, with the exception of one, several mutations were found in the HBV polymerase gene, but none pointed to drug resistance. The study presented here is the first report to address subgenotypes and mutation analyses of HBV S and polymerase genes in Palestine.