To many Western observers, the behavior of people in the Middle East is a mystery. The area is the scene of brutality and seemingly senseless acts of violence. Why has there been so much turmoil there for so long? This article contains a brief review of past events in the Middle East, which helps to establish the context of the problem. Sections include: Partition of Palestine; Other Events Affecting the Turmoil in the Middle East; An Economic Analysis; How Were the Terrorists Organized and Financed?; Rational Behavior; Economic Analysis of Criminal Behavior; Why the World Trade Center Buildings and the Pentagon?; The Economic Impact; A Teaching Suggestion; and Conclusions and Further Resources.