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In East Jerusalem, the majority of Palestinians contest the legitimacy of the Israeli state’s claim to sovereignty. This contestation necessarily affects how Palestinians engage with the state in pursuit of goods, services, rights, and resources. But how? Using data from 55 interviews and original survey experiments from a representative sample of East Jerusalemites, I show that collective norms surrounding the acceptability of a particular state provided good, service, or institution (GSI) determines the extent to which individuals engage with the state in that sector. Where collective norms deem a GSI to be acceptable, there is widespread engagement with the state in that sector. By contrast, anti-normalization (Arabic: tatbiyye) norms surrounding the unacceptability of particular sectors have powerful deterrent effects and lead to lower levels of engagement in select sectors. As such, this paper adds nuance to the emerging research on individuals’ engagement with the state in ethnically diverse societies by showing that collective social norms drive out-group avoidance at the level of the sector. Further, these norm-driven preferences can outweigh pragmatic or quality concerns when choosing to engage with the state.