Highly dispersed Pd-Cu on silica was synthesized under sonication and used as a catalyst for the hydroxylation of benzene using air, O-2 and H2O2 as oxidants. Air was found to be better oxidant for phenol yield (225 mu mol/g catalyst) and selectivity with neat benzene. However, when aqueous H2SO4 and CH3CN mixture was used as solvent there was a remarkable increase in the phenol yield (129 mu mol/0.1 g catalyst). The catalyst was recycled 5 times without any significant loss in its activity.