Transportation consumes for about 27% of total energy. Almost 100% of the energy used for propelling transport vehicles is derived from petroleum resources. In Gaza Strip and West Bank, transportation consumes about 60% of the total amount of imported fuel. The traffic congestion has a negative impact significantly on the environment because of the increased amount of fuel consumption and thus emissions of pollutants from vehicles. Serious traffic congestion is concentrated in the middle part of Gaza City, especially in major arterial roads such as Eljalaa Road. The congestion comes into view clearly in the segment of the street which consists of 5 consecutive signalized intersections. What makes the congestion even worse is the non-efficient traffic signal control; where each intersection is treated in isolation. The key solution to reduce the congestion and to save energy is to use signal coordination. Therefore, this study aims to redesign and coordinate the traffic signals along Eljalaa road using TRANSYT-7F Model. It aims also to compare between the traffic performance and the fuel consumption of the coordinated signals and the existing uncoordinated ones. The analysis and design are based on geometric data and manual traffic count. The results of comparison show a remarkable improvement of the traffic performance and energy saving of the studied area. There was a reduction of travel time, delay, stops and fuel consumption by 44%, 56%, 25% and 31% respectively. The level of service has been improved from F to D. Thus, it is recommended that signal coordination should be carried out at all arterial roads in Gaza city.