In a sample of 9th-grade Jewish (n = 118) and Arab (n = 100) students in Israel who participated in planned binational encounters, the author examined in-group biases as a function of (a) their perceptions of the encounter between the groups as interpersonal or as intergroup contact and (b) their views of the status of their respective national groups in Israel as legitimate and stable. In comparisons of the 2 encounter groups (of equal status), both groups showed in-group biases. In comparisons of the national groups at large (of unequal status), the Arab students considered their group similar to the Jewish group, whereas the Jewish students rated their group more favorably than they rated the Arab group. For the Jewish, but not the Arab, students, in-group bias was contingent on simultaneous ratings (legitimate-illegitimate; stable-unstable) of the binational situation in Israel. The data support a 2-dimensional model rather than a 1-dimensional model of intergroup-interpersonal definition of the encounter.