The former Governor of Alaska, who was Senator John McCain's running mate in the 2008 general election, was singled out by Banks as she was responding to a satirical news article that jokingly reported Palin saying that black people "accepted (slavery) willingly."
The 24-year-old shocked fans when she appeared to suggest Palin should be sexually assaulted on camera in a series of since-deleted tweets, but she later returned to social media to clarify her comments, stating, "I would never wish a woman to be raped.
"I said 'BANG' as in bang some sense into that h*," Banks wrote."
She also shared a link to a Huffington Post article about Palin, and a video clip of comedienne Tina Fey performing as the politician on Saturday Night Live.
Palin has since taken to Facebook to fight back, calling Azealia "little darling" and writing: "No one has any idea what you're wigging out about in these bizarre, violent rants against me, but you're obviously not exercising enough intelligence to acknowledge you've been sucked into believing some fake interview in which I supposedly offered comments representing the antithesis of my truth."
She then urged the rapper to "focus on working together to create something worthwhile", adding, "Like condemning racism, along with empowering young women to defend themselves against a most misogynist, degrading, devastating assault perpetrated by evil men - rape."
Palin then explained she would be removing Banks' music from her daughter's playlist, but ended the spat on a positive note, writing: "God bless you Ms. Banks, as you consider a change of heart."