This study assessed the effects of the ongoing violence on the mental health of Palestinian and Israeli youths. Parallel instruments were developed and adapted, as part of a collaborative project, in order to assess, in each society: (1) differential rates of exposure to the conflict, (2) the association between exposure and the severity of posttraumatic symptoms (PTS), and (3) the inter-relationships among PTS, functional impairment, somatic complaints, and coping strategies. Participants were 1,016 Israeli and 1,235 Palestinian adolescents. A self-report questionnaire assessed exposure. PTS was measured using the UCLA PTSD Reaction Index, functional impairment and somatic complaints were measured with the DISC, and coping strategies were assessed with Brief Cope. In both societies, greater exposure to conflict-related violence was associated with more PTS and more somatic complaints, with girls reporting more distress than boys. A total of 6.8 per cent of the Israeli students and 37.2 per cent of the Palestinian students met criteria for Post Traumatic Stress Disorder (PTSD). In both societies, but more pronounced in the Palestinian Authority, adolescents reported significant levels of functional impairment, mainly in the area of school functioning. Students with PTSD reported more somatic complaints as well as greater functional impairment.