Many communities across the world are chronically exposed to extreme violence. Responses of residents from a city and rural community in Southern Israel, both exposed to 7 years of daily mortar fire, were compared to residents from demographically, socio-economically and geographically comparable non-exposed control samples to examine protective factors and predictors of vulnerability to chronic war-related attacks. Samples from a highly exposed city (Sderot) and a highly exposed rural community region (Otef Aza), along with a demographically comparable comparison non-exposed city (Ofakim) and non-exposed rural community region (Hevel Lachish), were obtained in 2007 using Random Digit Dialing. In total, 740 individuals (81.8% participation rate) were interviewed about trauma exposure, mental health, functioning and health care utilization. In the highly exposed city of Sderot, 97.8% of residents had been in close proximity to falling rockets; in the highly exposed rural community region of Otef Aza, 95.5% were similarly exposed. Despite exposure to chronic rocket attacks, residents of Otef Aza evidenced little symptomatology: only one person (1.5%) reported symptoms consistent with probable posttraumatic stress disorder (PTSD) and functioning levels did not differ from those of non-exposed communities. In contrast, posttraumatic stress (PTS), distress, functional impairment and health care utilization were substantially higher in the highly exposed city of Sderot than the other three communities. Lack of resources was associated with increased vulnerability among city residents; predictors of PTS across all samples included being female, older, directly exposed to rockets, history of trauma, suffering economic loss, and lacking social support. Increased community solidarity, sense of belonging and confidence in authorities may have served a protective function for residents of rural communities, despite the chronic attacks to which they were exposed.