Lyric discussion by gabjopp 

Cover art for Holiday lyrics by Vampire Weekend

I think he's talking about the invasion on the Middle-East. Yes, honest.

"Holiday, oh, a holiday And the best one of the year Dozing off underneath my sheets While I cover both my ears"

Means bombs falling and protecting from it.

A vegetarian since the invasion She'd never seen the word "bombs" she'd never seen the word bombs blown up to 96 point Futura She'd never seen an A-K in a yellowy day-glo display A t-shirt so lovely, it turned all the history books grey

This girl who lived there didn't what boms were, and what AK47s looked like. And her t-shirt will be in all the history books forever, to show how bad the conflict was.

Half of me is the gasoline But the other half's the surf

Since the Middle East is basically oil, and the oil is shipped to the sea in those huge tankers, that's why it's such an importante place to have control over.