Yehoshua is an Israeli Peace Movement activist. He attended the signing of the Geneva Accord and freely airs his political views in essays and interviews. He is a long-standing critic of Israeli occupation but also of the Palestinians. He and other intellectuals mobilized on behalf of the dovish New Movement before 2009 elections in Israel.
According to La Stampa, before the 2008–2009 Israel-Gaza conflict he published an appeal to Gaza residents urging them to end the violence. He explained why the Israeli operation was necessary and why it needed to end: "Precisely because the Gazans are our neighbors, we need to be proportionate in this operation. We need to try to reach a cease-fire as quickly as possible. We will always be neighbors, so the less blood is shed, the better the future will be. Yehoshua added that he would be happy for the border crossings to be opened completely and for Palestinians to work in Israel as part of a cease-fire.
Yehoshua was criticized by the American Jewish community for his statement that a "full Jewish life could only be had in the Jewish state." He claimed that Jews elsewhere were only "playing with Judaism.""Diaspora Judaism is masturbation," Yehoshua told editors and reporters at The Jerusalem Post. "Here," meaning, in Israel, he said, "it is the real thing."