Little is known about the impact of traumatic experiences and stressful life conditions on people in low-income countries who live in conditions of ongoing political violence. In order to determine the prevalence and predictors of post-traumatic stress disorder (PTSD) and major depression (MD) among Palestinians subjected to chronic political violence and upheaval, we used a stratified multi-stage cluster random sampling strategy to interview a representative sample of 1,200 Palestinian adults living in Gaza, the West Bank, and East Jerusalem. Prevalence of PTSD/MD for men living in the West Bank, Gaza, and East Jerusalem was 25.4%/29.9%, 22.6%/27.6%, and 16.1%/16.1%, respectively. For women, the prevalence of PTSD/MD was 23.8%/29.0%, 23.9%/28.9%, and 19.7%/27.6%. Among men, PTSD was significantly positively associated with age group, two or more incidences of political violence (compared to none), greater intrapersonal resource loss, and loss of faith in government. MD was positively associated with experiencing exposure to one, or two or more, incidences of political violence (compared to none), and greater interpersonal and intrapersonal resource loss. Among women, PTSD was positively associated with greater interpersonal and intrapersonal resource loss, and MD was positively associated with death of a loved one, two or more socio-political stressors (compared to none) previous to the past year, one or more socio-political stressors (compared to none) in the past year, and greater interpersonal and intrapersonal resource loss. Interpersonal and intrapersonal resource losses were consistently associated with PTSD and MD, suggesting potential targets for intervention and prevention efforts and thus provide important keys to treatment in areas of ongoing conflict.