Minority groups are very common throughout Western society, mainly as a result of massive immigration during the last century. These groups have developed their own identities due to a variety of social factors. Even though ethnic identity plays an important role in evoking many human perceptions, rarely have ethnic identities been analyzed for their effects on attribution of responsibility to terrorism. Drawing on attribution theory, we argue that the way people understand ethnic relations and analyze causal relationships plays a crucial role in their willingness to denounce or support violent acts of terrorism. Members of minority groups tend to approve of terrorism more often than not. Perpetrators who are members of the majority tend to be seen as more detestable. We test these hypotheses using evidence from an original experiment involving 308 adult Israelis (166 Jews and 142 Arabs) conducted in 2005 at the height of the Palestinian uprising. Respondents were randomly assigned to three groups, each of which was presented with a terror attack scenario: a) a Jewish perpetrator; b) a Palestinian perpetrator; c) a neutral perpetrator (Asian). Arabs tended to denounce terrorist acts less than Jews; Jewish perpetrators were perceived to be abhorrent. These findings suggest that ethnic identity plays a crucial role in the way one attributes motivations and values to terrorism.