The Council on American-Islamic Relations (CAIR) was founded in 1994 by several leaders of the Islamic Association for Palestine (IAP), an organization described by the U.S. government as part of "Hamas' propaganda apparatus."

Nihad Awad, IAP's public relations director and contributing editor of the IAP publication Muslim World Monitor, became CAIR's executive director. Rafeeq Jaber, IAP's president after 1994, also served as executive director for CAIR. Ghassan Elashi, an IAP co-founder, founded CAIR's Dallas chapter (Elashi is also the past chairman of the Holy Land Foundation {HLF}, which was closely associated with IAP). Omar Ahmad, IAP president between 1991 and 1994, became CAIR's founding chairman and board member. Ahmad remained on the board of the American Middle Eastern League for Palestine (AMEL), a non-profit organization that has been "operating as one and the same business" as IAP, according to the U.S. government. 

IAP was active in the U.S. from 1981 until about 2004, advocating an anti-Semitic ideology which categorically rejected a peaceful resolution for the Arab-Israeli conflict. An early IAP publication, The Road to Palestine, stated: "The era of crusader wars against our people is over and now starts the series of the children [of] apes and pigs," a reference to Jews. It further warned of "the stage in which Jews will do mischief…with mighty arrogance."

Immediately following the establishment of Hamas in 1987, IAP began to print and distribute Hamas literature, including Hamas communiqués and the Hamas Charter (an extremely anti-Semitic document that cites the Protocols of the Elders of Zion). The communiqués explained Hamas's position and called for a global Jihad against Jews.

IAP was closely associated with HLF, a Texas-based charity whose officers were sentenced to between 15 and 65 years in prison in 2009 for funneling over $12 million to Hamas.IAP not only encouraged supporters to donate to the HLF, but also shared leadership with the charity.

In December 2008, the United States Court of Appeals for the Seventh Circuit upheld a lower court ruling against IAP and other Islamic charities for complicity in the murder of a 17-year-old American citizen in the West Bank.