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This paper explores the possibilities of intercultural dialogue as a means of peace building on the people‐to‐people level. With its focus on the Israeli‐Palestinian conflict the work assesses a number of efforts, which have utilized cultural dialogue rooted in religion to facilitate dialogue, relationship building, and perception change during the period subsequent to the signing of the Oslo Accord in 1993 and prior to the outbreak of Israeli‐Palestinian violence in September 2000. Utilizing an interdisciplinary theoretical framework and questionnaire‐based quantitative data collected from Israeli and Palestinian students, the work suggests that the religiously based dialogue has the potential to move mutual perceptions to more favorable positions based on the similarities between Islam and Judaism. Such dialogue can also clarify to both sides the identification which each side has with the same land. We believe that our exploratory data might encourage the further use and study of religious cultural elements to facilitate peace building in both the Israeli‐Palestinian context and in other acute interethnic conflict venues.