Combining several social-psychological and sociological perspectives to examine the relative importance of diverse social identity components in Israeli and Palestinian societies, this study uses identity as a key concept in understanding how diverse social orders can simultaneously exist within a single societal entity. Analysing a sample of over 3,800 Jewish, Arab, and Palestinian high school students we find that family identity is the most salient among Jews and Arabs today, while the civic (Palestinian) identity is the most salient among Palestinians. Moreover, each social identity entails a different attitudinal and demographic profile. The findings seem to indicate that the value systems (according to which the collective is more important than the individual) that prevailed among Jews in Israel in the state's formative years are declining, while such value systems are currently prevalent in Palestinian society. Implications for the conflict between the two societies are also discussed.