In countries with an ongoing violent conflict, aid donors are confronted by four sets of issues: how the volume as well as the orientation of the program can influence a peace process; whether development efforts can be undertaken in rebel-controlled territories; and how an early rehabilitation program can affect the long-term process. This paper analyzes the strategies applied in Sri Lanka by donors undertaking a traditional development approach and those following a more comprehensive approach. Dilemmas are generated vis- à -vis both the government's and the rebels' policies and interests. Four general conclusions underline the political nature of development aid programs during a violent conflict.