For years, it had been assumed that since the end of the Second World War and up until the Eichmann trial in 1961, Hebrew culture in Israel tended to repress the Holocaust or narrate it according to the Zionist ideology's viewpoint – to accentuate the events of the rebellion against the Nazis and to infer from them a lesson of national revival and restoration. The consensus concerning children's literature, in particular, maintained that it had been utterly committed in the early decades of statehood to extracting out of the Holocaust a 'fortifying tale' bearing a national lesson. This paper, however, argues the existence of a developed Holocaust discourse in children's literature written in Jewish Palestine during the war years, and suggests that children's literature even predated adult literature in setting the Holocaust theme at centre stage. This article aims to shed light on a rare narrative in the Israeli public discourse of the Holocaust: the literary story told to Jewish children in Palestine during the years of the Holocaust. At the time, this new narrative for children was extensive and diverse. For the first time in the history of Zionist children's literature, it challenged the Diaspora-negating code that had been dominant since its beginning. Nevertheless, only a few years later, with the founding of the State of Israel, this new narrative was rapidly 'forgotten' by the Israeli collective memory and proceeded to be neglected by literary and educational research as well. Although it spanned a short time period and failed to leave a literary impact on writings for children in Israel, this Holocaust narrative is tremendously important, having evoked the unique voice of the Jewish settlement in Palestine (the Yishuv) during the Second World War. It also serves as a case study of the crucial function of children's literature within the public discourse during traumatic times, illuminating the advantages of children's literature as a marginal and peripheral form of communication in the public domain.