Definitions of political violence as terrorism are often tainted by self–serving motivations. Groups in conflict in particular tend to justify the use of indiscriminate violent means by highly regarded political ends. This study explores such self–serving perceptions of terrorism in the context of the Israeli–Palestinian conflict. In two surveys during December 2001, Israeli Jews, Israeli Arabs and Palestinians were asked whether 11 local and international incidents were acts of terrorism in their view, and whether they were considered acts of terrorism by the international community. Self–serving judgments on both sides were expected, but their extent is striking, and they extend also to the international incidents. Israeli Arabs judge all acts of violence as terrorism in high percentages. Israeli Jews and Palestinians’ definitions present a mirror image; however, they do not project these definitions to the international community. Instead, they perceive an international norm largely divergent from their own point of view, inflating world judgment of their own acts of violence as terrorism and underestimating world judgment of the other side’s violence, in what amounts to a hostile–world phenomenon.