A special kind of associating polyelectrolytes, telechelic polyelectrolytes, composed of a flexible linear polyelectrolyte and short hydrophobic blocks at both ends, is investigated by means of Monte Carlo simulations ill aqueous media. It is found that the interplay between hydrophobic attraction and the long-range electrostatic interaction as well as the counterion distribution exerts a major influence on the chain conformations (two basic conformations: loop and nonloop), association behavior (loop association contributes to loop conformation; free, dangling, and bridge chains contribute to nonloop conformations), and the forming of clusters. At a concentration close to the overlapping concentration phi*, the Clusters are found to be further connected by bridge chains under strong hydrophobic interaction, forming a 3D network. In addition, increasing Coulombic interaction strength is in favor of the formation of a gel network. With increasing Coulombic interaction strength, first chains tend to extend and then tend to collapse due to the screening originating from the counterion condensation layer.