AbstractThe Israeli government's decision to remove settlers in the Gaza Strip forcibly produced a situation of traumatic stress, resulting from confrontation and conflict for settlers. The authors examined the effects of the Gaza disengagement, that occurred following prolonged terrorist exposure, on rates of probable major depressive disorder (MDD) and posttraumatic stress disorder (PTSD) diagnosis in a representative sample of Gaza settlers (N = 190). Predictors of probable MDD in multivariate models were being female, and experiencing greater economic and psychosocial resource loss. Predictors of probable PTSD were being older and experiencing greater psychosocial resource loss. Posttraumatic growth was significantly related to a reduction in the odds of having probable PTSD. This latter finding is interpreted within our conceptualization of action‐focused growth.