The study blames Israel's siege of Gaza and closure of the West Bank, for increasing food prices and poverty levels.
It also notes the devastating effects of suspending salaries of public sector employees and the international sanctions imposed on the Palestinian Authority for the past year.
"The land of Israel belongs to both Jews and Palestinians - as long as there are people who reject this fact, the conflict will never be solved"
Iskander, Boston, US
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Arnold Vercken, WFP country director, said: "Nearly half of the Palestinian population is thought to be food insecure. It is at an alarming level."
Currently, 1.1 million of Gaza's 1.4 million residents depend on outside food assistance, placing the Palestinian territory on the list of WFP's hunger global hotspots.
The WFP is a principal food aid provider to Palestinians, serving 640,000 primarily non-refugee Palestinians, over a third of them in Gaza.
Although al Jazeera could visit food distribution centres, speaking to the recipients proved difficult.
Some shied away and even those who initially agreed to be interviewed eventually couldn't bear the perceived shame of having their extreme poverty exposed.
Um Mahmoud Al-Hilu is a mother of eight and three months pregnant.
She said she can't remember the last time she cooked meat for her children.
Malnutrition indicators include patients being underweight, wasting, and stunting.
These are all slowly rising despite the increase of food aid from organisations such as the WFP, which raised its assistance by more than 20 per cent in the past year.