Urban and regional planners tend to recommend spatial mix of socially diverse populations as an appropriate strategy to achieve social equity and improve inter-group relations. However, the actual impact of such a mix on social relations in general, and inter-ethnic attitudes in particular, has been subject to on-going, yet inconclusive, debates among social scientists. This paper adds to the study of these issues by examining the inter-ethnic attitudes of residents in Jewish 'new settlements' (elsewhere termed 'community settlements', or 'mitzpim'), which were established some 15 years ago among the Arab villages of Israel's central Galilee region. We found that despite certain strands of ethnocentrism, most Jewish settlers hold significantly more moderate views on Arab-Jewish issues than: (a) the general (non-Galilee) Jewish public in Israel; and (b) the region's Arab population. The influence of the socio-spatial mix on the moderation of hostile attitudes, at least among the Jews, is analyzed and explained by comparing our data with the findings of previous research on the topic. On the basis of that comparison we conclude that the Arab-Jewish mix in the Galilee, along with socio-economic characteristics of the Jewish population and the existence of a 'penetrating group phenomenon', have combined to moderate Jewish attitudes in the study region. Planners are called upon to use this knowledge.