The second part of the 1937 Palestine League was held in autumn 1937, starting with a Tel Aviv derby, played on 9 October 1937, after the league schedule was disturbed by a disagreement between Hapoel and Maccabi factions in the Eretz Israel Football Association.

The competition's final matches was played on 27 November 1937, and the league was won by Maccabi Tel Aviv[1] For the first time, a second division was operated, called Mahlaka Bet and was split to north and south divisions.

League matches started early in 1938 and continued until the summer season break.

[3] The EIFA entered a team to the 1938 World Cup, and was placed in Group 6 of the qualification rounds, along with Greece and Hungary.

First, the national team faced Greece in a two-legged tie, with the winner advancing to meet Hungary for a sport in the finals.