Shortly before the opening of the Trans-Iranian Railway in 1938, Krupp was tasked to design a 2-8-0 and a 2-10-0 locomotive. They had to be fired with oil, with the option to fire coal if necessary. Since the railway was still a new thing in the region, they were designed to be maintained in simple workshops and operated by inexperienced crews. The major part was made up of 49 2-8-0 locomotives.

24 were built by Krupp, 16 by Henschel and 9 by Esslingen. Designated class 41 due to four driving axles and one leading axle, they got the numbers 41.11 to 41.60. With the Anglo-Soviet Invasion of Iran in 1941, the procurement of German locomotives ended. The German locomotives were repaired, but at the same time British steam locomotives were introduced. It only took two more years until diesel traction was introduced with ALCO RSD-1 locomotives.

The Palestine Military Railway, operated by the British, needed new mixed traffic locomotives in World War I since their existing British mineral engines were not powerful enough for future needs. Since British manufacturers did not have enough capacities, the order went to Baldwin. In the short period in October and November 1918, they built 50 ten-wheelers.

In 1920, they came to the civil Palestine Railways and were designated class H. Due to missing turntables, six were brought to Armstrong Whitworth in 1926 to rebuild them into 4-6-2T tank locomotives which were designated class H2. Six others received copper fireboxes at the same company, while again others were fitted by the PR itself with Belpaire fireboxes. Between 1937 and 1938, the class H3 was created by the PR by rebuilding five to 4-6-4T tank locomotives. 

In World War II, when Palestine found it hard to acquire Welsh coal, they started to convert all to oil firing. This process was completed in 1943. With the founding of Israel in 1948, 44 remaining locomotives came to Israel Railways. These were 33 original class H locomotives, six H2 and five H3. The last ones were withdrawn around 1960.

The class P of the Palestine Railways consisted of six 4-6-0 locomotives built by North British in 1935 and numbered 60 to 65. They had been ordered to speed up traffic on the line between Haifa and El Kantara when it became clear that the older class H built by Baldwin could no longer keep up with the growing requirements on this line. Although officially being classed as mixed-traffic locomotives, their main task was to haul expresses which also had CIWL sleeping cars in them. The drivers of the class P were 4 3/4 inches bigger than those of the class H.

The locomotives with their Belpaire fireboxes looked British, but they had received American-style bogie tenders for greater capacity and better running characteristics. Built for burning Welsh coal, they were converted to oil burning in World War II when import of coal from Wales became too dangerous. All six survived this and the following conflicts and came to Israel Railways in 1948. After diesel locomotives had taken over the work on the main line in 1956, the class P still found some work elsewhere and was withdrawn in 1959 when steam service ended in Israel. Only the tender of 62 was preserved.