Objective: To examine the relationship between exposure to political violence and posttraumatic symptoms, future orientation, and attitudes toward peace. Method: A total of 740 boys and girls aged 11.5-15 years from Jerusalem, Gilo, and the Jewish settlements in the disputed territories were assessed in the summer of 2001 using an exposure to terror questionnaire, Child Posttraumatic Stress Reaction Index, Children's Future Orientation Scale, and a question regarding the future of peace talks. Results: A substantially higher percentage of youths in the settlements (27.6%) than in Jerusalem (12.4%) or Gilo (11.2%) reported moderate to very severe levels of posttraumatic symptoms. Children's Future Orientation responses were moderately optimistic. About two thirds of the adolescents in the settlements rejected the idea of peace talks at any time, whereas around half of the youths in Jerusalem and Gilo supported the continuation of peace talks. Exposure was related to both PTSD symptoms and attitudes toward peace but not to future orientation. Conclusions: Our findings present the complex interrelationship of political violence, posttraumatic stress disorder, and attitudes toward peace and raise the need for a combined mental health and peace education intervention to prevent the often overlooked vicious cycle of violence and traumatization.