Introduction: The percentage of the Palestinian children considered “below level” – or “not on track” in their early childhood development is higher than their peers in neighbouring countries. This research presents a framework to explain pathways between water stress, child health, family wealth, parental support, and early childhood development in Palestine, and presents a different perspective in water stress and policies and services addressing children. Objective: To assess evidence of the link between water stress and vulnerability in early childhood development and to examine the implications of this relationship for services and policies in Palestine. Method and Results: Demographic and health data obtained from nationally representative surveys were merged and analysed. Descriptive analysis was used to investigate the features of household water stress and show its association with risk for delayed early childhood development in Palestine. Data on social, economic, health, and environmental conditions in 52 communities in Palestine were aggregated to develop a Child-Water Stress Index to be used as a single summary measure that captures the multidimensional influence of water stress. At the household level, a Mediation Model was developed and applied to investigate the pathways through which water stress interacts with child health, family care, and wealth level and in turn, influences early childhood development. An evaluation strategy is presented, with new perspectives for enhancing the effectiveness of early childhood programmes and policies in the Palestinian context. Qualitative data using focus group discussions with parents and semi structured interviews with practitioners were conducted to provide in depth analysis of the findings. Conclusion: Children experiencing water stress are more likely to not be on track in their early childhood development. Water stress is more likely to influence childhood development through indirect pathways by interacting with determinants of optimal early childhood development including disrupted family support, wealth level, and child health. Water stress exacerbates the impact of limited wealth and inadequate family support on early childhood health and development, suggesting the need for a holistic perspective in evaluating services and policies.