Palladium Books, as written, has a very nice and very flexible combat system. Unfortunately, it is not very well laid out in most of the books and many important concepts are often hidden deep in the combat section. The situation becomes even worse when using an advanced form of hand-to-hand combat in any setting besides Ninjas & Superspies, which actually does a good job describing the combat system. What I will present in this section is an alteration of Palladium Book's combat system, but it will be very familiar to those that know the original combat system. A very important concern that I had is compatibility with the rest of the material published by Palladium Books. I did not want to create an excellent combat system that would require a complete rewrite of all O.C.C.'s and N.P.C.'s, so all published material should be compatible with the revised combat system as it is written.
Central to the revised combat system is the phases of an attack. Each time a combatant attacks, they begin with an offensive action, even something as simple as a punch attack. The target of the offensive action can then perform a defensive action, anything from a dodge to a Back Flip (Escape). Regardless of the success or failure of the defensive action, the target can then perform a deflection action. Although each offensive action requires a melee attack to perform, there are several defensive and deflection actions that do not. This process is repeated until all combatants have used all of their attacks during a melee round. The order in which combatants participate in combat depends on their initiative order. An alternative intitiative system is presented on this site here.
Splitting different combat terms, such as Body Block / Tackle, into the different combat action categories (offensive, defensive, deflection, or movement) provides a much more organized system that also maintains the traditionally strong ability in Palladium Books to modify and add to their published rules. For example, I believe it is easier to add new and more complicated combat actions to the system now that they can be more properly categorized into one of the four different types of actions. The revised system also specifies combat ranges, which was originally introduced in Ninjas & Superspies but never adopted outside of that system. Introducing a combat range allows for new combat actions that can only be performed at certain ranges and also allows for more dynamic combat, as two combatants continually try to dance around each other looking for an advantage.