Before a vociferous and flag-waving crowd at Al-Ahli's packed stadium in the town of Hebron, a goal from a direct free kick in the second minute of stoppage time broke a deadlock between the champions of their respective territories.
In a first leg in the Gaza Strip, Shejaiya and Al-Ahli played out a goalless draw on August 6 and the two sides were locked in a 1-1 draw in Hebron before the red-and-black striped West Bank club finally triumphed 2-1.
Shejaiya were sportingly cheered at the start and finish of the encounter even though the thousands of Hebron spectators drowned out the modest 35-member delegation of players and staff that Israel allowed to cross its territory and travel to the West Bank for the historic match.
Al-Ahli will now represent Palestine, a member of football's world governing body FIFA since 1998, in international competitions.
Israel strictly controls the Gaza border, and the second leg, originally scheduled for last Sunday, had been postponed over a dispute involving security checks on some of the Shejaiya players.
Gaza, ruled by the Islamist movement Hamas, is separated from the West Bank, which is run by its bitter rival, the Palestinian Authority of president Mahmud Abbas, by 60 kilometres (36 miles) of Israeli territory as well as politics.
West Bank and Gaza Strip teams play in separate leagues, in which Al-Ahli and Shejaiya are the current champions.
The showdown was seen as a symbolic victory over both the bitter political divisions within Palestinian ranks and Israel's blockade.
A devastating Gaza war last summer between Israel and Hamas killed more than 2,200 Palestinians and 73 people on the Israeli side, while the Islamists evicted Abbas's Fatah party in a week of deadly street clashes in 2007.