In countries with an ongoing violent conflict aid donors are confronted by four sets of issues: How the volume and orientation of the program may influence a peace process; whether development efforts may be undertaken in rebel controlled territories; and how an early rehabilitation program may affect the long term process. In this article we analyze the strategies applied in Sri Lanka by donors applying a traditional development approach and those following a more comprehensive approach. Dilemmas are created 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.