The study aimed at identifying the relationship between the competencies of Palestinian university graduates and the needs of the Palestinian labour market from the perspective of graduates and employers. The study adopted the descriptive analytical approach (quantitative). It found that the level of suitability of the competencies of Palestinian university graduates to the needs of the labour market from the perspective of the graduates was very high, with a total scale mean score equal to 4.42, while the level of suitability of the competencies of university graduates to the needs of the labour market from the employers' perspectives was high with a total scale mean score equal to 3.66. The study found significant statistical differences at the level of significance ([alpha] = 0.05) about the suitability of the university graduates' competencies to the needs of the labour market according to the total score of the domains (organisational competencies, specialised and technical competencies) from the graduates' perspectives, referring to the variables (age, years of experience and specialisation). The study recommended working on designing supportive policies in the higher education sector, such as promoting social responsibility and involving labour market institutions in developing academic plans for universities. In addition, this study recommends conducting further studies to provide research-based evidence regarding the relationship between higher education graduates' competencies and the needs of the Palestinian labour market.