This article develops theory to address a dilemma experienced as "resistance" to a conflict transformation process among Jewish and Arab nursing students in Israel. This dilemma is analyzed from two theoretical perspectives: (a) the "postcolonial approach," which applies ideas of critical conflict theory and group dynamics to generate change in intergroup relationships, and (b) the "negotiating reality approach," which applies ideas of social constructionism and action science to enable participants to jointly shape a space in which they feel free to express their complex individual and group identities. We propose that the postcolonial approach offers a powerful interpretive framework but would likely engender greater resistance. We present a negotiating reality intervention model designed to offer a way out of the dilemma and increase cooperation in critical reflection, learning, and change. The discussion compares the implications of the two approaches, setting forth propositions for guiding further research and practice.