Peace and Tolerance in Palestinian Education Act This bill directs the Department of State to report annually to Congress on the school materials used by the Palestinian Authority or the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) in the West Bank and Gaza. Specifically, the report shall address (1) whether the materials used encourage violence or intolerance toward other nations or ethnic groups, (2) the steps the Palestinian Authority and UNRWA have taken to reform such materials, and (3) whether U.S. foreign assistance is used to fund the dissemination of the offending materials. The State Department shall make such reports publicly available.