Political exclusion, violence, lack of civic engagement and leadership have become a real threat to coexistence and democratic values. It is even more prominent in the reality of divided societies suffering from protracted conflicts and ethnic or religious diversity. Within such societies, such as Israel, Northern Ireland, South Africa, Cyprus and others, these rifts are evident in major cities where rival groups live side by side.This doctoral dissertation examines these issues through the perspective of community leadership in the city of Jerusalem. The questions at the center are threefold: (1) Do community leaders in divided societies influence the tendency of their group members to be politically involved with the other side? And if so, how? (2) How do intermediatory institutions promote urban citizenship in divided cities? (3) How do community leaders explain their controversial decision to take on the role of a mediator between groups? These three perspectives — of the residents, institutions, and leaders themselves — offer new theoretical knowledge and explanations concerning the major problems of such cities.