We examine the hypothesis that children’s exposure to ethnic-political conflict and violence over the course of a year stimulates their increased aggression toward their own in-group peers in subsequent years. In addition, we examine what social cognitive and emotional processes mediate these effects and how these effects are moderated by gender, age, and ethnic group. To accomplish these aims, we collected three waves of data from 901 Israeli and 600 Palestinian youths (three age cohorts: 8, 11, and 14 years old) and their parents at 1-year intervals. Exposure to ethnic-political violence was correlated with aggression at in-group peers among all age cohorts. Using a cross-lagged structural equation model from Year 1 to Year 3, we found that the relation between exposure and aggression is more plausibly due to exposure to ethnic-political violence stimulating later aggression at peers than vice versa, and this effect was not moderated significantly by gender, age cohort, or ethnic group. Using three-wave structural equation models, we then showed that this effect was significantly mediated by changes in normative beliefs about aggression, aggressive script rehearsal, and emotional distress produced by the exposure. Again the best fitting model did not allow for moderation by gender, age cohort, or ethnic group. The findings are consistent with recent theorizing that exposure to violence leads to changes both in emotional processes promoting aggression and in the acquisition through observational learning of social cognitions promoting aggression.