This paper explores several paradigmatic approaches to understanding the causes of the intractability of the Israeli/Palestinian conflict. It elaborates a perspective that illuminates how the traumatic histories of both peoples construct a victim state of mind, whose paranoid schizoid mechanisms are exacerbated by the ongoing traumatogenic environment of violence and war, thus foreclosing capacities for peacemaking. After critiquing the trauma paradigm’s assumptions of psychological symmetry and shared responsibility for the conflict, the paper develops an alternative social psychoanalytic model that situates the unconscious processes produced by trauma within the specificities of history, large group identity, ideological hegemony and power hierarchies that shape the psychological experience of both peoples and account for the complex systemic asymmetries that impede the possibilities for a just reconciliation of their tragic conflict.