There is a paucity of research examining street-level bureaucracy in cities affected by ongoing ethnopolitical conflict. This study addresses this limitation by exploring the work of social workers in the public services of mixed cities in Israel. It shows the interconnection between ambiguous institutional policies, varying workers’ views of the role of social services, and changing discretion patterns. Findings also suggest that episodes of conflict escalation intensify staff ethnic sectarianism, as well as increase workers’ own ethnic biases, which affect the ways in which they act as a liaison between the welfare system and citizens through their use of discretion.