This research examines the immediate effects of losing one's home and witnessing the demolition of others' houses on the mental health of Palestinian adults and children. The loss group consisted of 47 adults whose homes were demolished, the witness group of 24 adults who witnessed the house demolition, and the control group of 33 adults. The groups were compared for their anxiety, depression, and paranoiac symptoms. In addition, 38 children in the loss group, 36 children in the witness group, and 50 children in the control group were compared for their psychological symptoms. The results showed that adults who were exposed to house demolition showed a higher level of anxiety, depression, and paranoiac symptoms than the witness and control groups. The children in the loss group showed a higher level of psychological symptoms than the children in the witness and control groups. The witness group differed from the control group in having more depression among women and more psychological symptoms among children. Women suffered more from anxiety, depression, and paranoiac symptoms than men in the loss and witness groups but not in the control group.