"I am officially the most oppressed person in the world," Maysoon Zayid recently told an audience in California. "I'm a Palestinian Muslim with cerebral palsy." Zayid, the first female standup ever to perform in Palestine and Jordan, added that her shaking often caught the eye of airport security staff, who think: "That chick's nervous!" It's a situation not helped by the fact her dad likes to drop her off – and he looks like Saddam Hussein.

Zayid, co-founder of the New York Arab-American comedy festival, is a rising star in both the US and Middle East. "Comedy is pain plus time," says the 33-year-old from New Jersey, of the formula she has used to turn her disability and the trials of being a female American born to Palestinian parents into ironic, irreverent and often bawdy humour. "I'm the first shaking comedian without a drug problem," she likes to tell audiences.

Zayid's lampooning of Arab-American relations in the aftermath of 9/11 has had crowds from New York to LA rolling in the aisles; her comic jabs at both Israeli and Palestinian politicians win her packed theatres in the West Bank; and in Egypt, her standup regularly sells out 4,000- capacity venues. If she appears in the Gulf, she switches to a "halal show": no swearing; no religious jokes.

Although she tours the US, Canada and the Middle East with a band of Arab-American comedians under the banner Arabs Gone Wild, there's more to Zayid than comedy. In between Middle East performances, she visits the children that her charity, Maysoon's Kids, works with across the occupied West Bank. It is here that we meet, at one of her comedy workshops at Aida refugee camp, on the outskirts of Bethlehem.

"Who can tell me what standup comedy is?" Zayid asks a group of teenagers. They look at her blankly.

"Is it like theatre, a play?" a tall boy suggests solemnly.

"Are you going to teach us how to act?" asks a hesitant young woman.

Aida is home to Palestinian refugees who fled or were forced out of what is now Israel in the 1948 war. Its children grew up amid gunfire, Israeli army raids and curfews. Then, in 2002, they watched a concrete wall, the Israeli separation barrier, rise up to enclose Bethlehem. Zayid, who spent summers with her family in the West Bank, is teaching these teenagers to turn their raw experiences into comedy skits.

"During the second intifada," says Zayid, "when Jenin and Nablus were attacked and the Bethlehem Church of the Nativity was under siege, I saw these images [on TV] of crushed wheelchairs. I was concerned that a whole generation of children were being disabled, in a society that didn't know how to deal with that."

Maysoon's Kids runs welfare programmes as well as training sessions for parents and teachers of disabled children. A firm believer in art as therapy, Zayid initially ran drama workshops with refugee camp kids, but soon switched to comedy. "These children are so strangled here. They have no way to express themselves. With comedy, they can take the pain and channel it, get if off their chests."

The switch from drama to comedy follows the arc of Zayid's own career. A classically trained actress, she swiftly realised that there were few roles available to "a disabled, ethnic chubby girl", and that she would need an edge. Following the examples of successfully offbeat actresses such as Whoopi Goldberg and Rosie O'Donnell, Zayid switched to standup. By the third show, her act took off.

Now she has gone full circle, appearing in the recent Adam Sandler movie Don't Mess With the Zohan and currently working on a film of her own. "It's the first American feature film with a Muslim female lead – and the first time someone with a noticeable physical disability is in that role, too." She also has a brief part in Sex and the City 2, now filming.

At Aida camp, Zayid specifically asked for teenagers who were "the hardest to work with, the ones that every other instructor has had problems and struggled with". Her confidence in her ability to turn these teenagers into standups stems from her observation that the craft of comedy is part of everyday Palestinian life: "Society here is about sitting and talking to each other all the time. Having lived in Palestinian society, I know they tell jokes about the most horrifying things. I find the ability to do that really amazing."

In the course of three days, the workshop participants race through some standup basics: character development, audience empathy, the structure of simple routines. They are asked to take their saddest story and turn it into something funny. Zayid mentions one teenager from the camp who turned a stint inside an Israeli prison into a hilarious comedy sketch.

"He had just got out of jail after two years," says Zayid of the 19-year-old she describes as "prison skinny". Asked to recall his worst memories of his time inside, the boy was soon ranting about bad prison food, dreadful smells and even worse cellmates. "You can see the transformation," says Zayid, as his routine came together through a combination of comic timing and skilful storytelling. "From fear, to bonding with the audience, to getting more open. That's what standup is. It humanises you."