One thousand one hundred and ninety six Palestinian adults living in the West Bank, Gaza Strip, and East Jerusalem were interviewed beginning in September 2007 and again at 6- and 12-month intervals. Using structural equation modeling, we focused on the effects of exposure to political violence, psychosocial and economic resource loss, and social support, on psychological distress, and the association of each of these variables on subjective health. Our proposed mediation model was partially supported. Exposure to political violence, psychosocial resource loss, and social support were related to subjective health, fully mediated by their relationship with psychological distress. Female sex and being older were also directly related to poorer subjective health and partially mediated via psychological distress. Greater economic resource loss, lower income, and poorer education were directly related to poor subjective health. An alternative model exploring subjective health as a mediator of psychological distress revealed that subjective health partially mediated the relationship between resource loss and psychological distress. The associate between female sex, education, income, and age on psychological distress were fully mediated by subjective health. Social support and exposure to political violence were directly related to psychological distress. These results were discussed in terms of the importance of resource loss on both mental and physical health in regions of chronic political violence and potential intervention strategies.