Sponsored by the Palestinian Culture Ministry and the Barenboim-Edward Said Foundation, the concert was held on Sunday to honour the Palestinian-American intellectual who died in 2003 and to boost understanding towards peace in the Middle East.
The orchestra of young players performed Mozart's Sinfonia Concertante and Beethoven's Fifth Symphony to rapturous applause and a standing ovation from the mixed Israeli and Palestinian audience.
One of the world's most famous classical musicians, Barenboim has for years championed efforts to improve Israeli-Palestinian understanding in the Middle East and is widely admired by people on both sides of the conflict.
"We like not only Barenboim's music, but also his ideas. And this is a particularly special concert because it's in memory of Edward Said," said Eesa Shihabeh, whose 16-year-old granddaughter Tala was playing the violin.
"Music can speak by herself if you listen," said his wife Suad. "Music is one of the solutions to the situation," added her husband.
An American Palestinian, Jamila Abed Bakr, who also lives in Ram Allah, complained about Israeli restrictions but similarly praised Barenboim's vision.
"His philosophy is universal. Everyone of my friends admires him because he's working towards justice and peace all over the world not just for Palestinians and Israelis," she said.
Barenboim (L) and Edward Said
jointly founded the orchestra
Members of the West-Eastern Divan Orchestra, which is based in southern Spain, are travelling on diplomatic passports issued by Madrid to limit hold-ups at Israeli checkpoints in and out of the occupied territory.
Barenboim and Said jointly founded the orchestra comprising around 100 mainly Arab and Israeli young musicians as a means of fostering friendship between Palestinians and Israelis.
Speaking on Saturday, Barenboim said his orchestra was in the West Bank to convey a message of solidarity and of mutual understanding.
The Ram Allah concert is the climax of a tour that has taken the orchestra to cities including Buenos Aires and London, and comes with Israel in the process of dismantling its 38-year occupation of the Gaza Strip.
A similar concert due to be played in Ram Allah in 2003 while it was surrounded by the Israeli army was cancelled at the last minute because of security concerns.