On The Beach

Nabil Kafarneh blames "mysterious elements" for the fire that destroyed his nightclub five years ago. Its location on the Gaza Strip's Mediterranean coast made the Appointment a popular spot for Arab tourists, raking in more than $30,000 a month, a fortune in Gaza. Then one morning in September 2000, Kafarneh showed up to find his place in flames--most likely the work of Islamists opposed to the free-flowing liquor and dancing women. "It's no fun without women!" he protests. "We're a democracy. We should have everything!"

"Everything," as Kafarneh sees it, should include tourism. "Gaza has 43 kilometers of the best beaches in the Mediterranean," says Israel's Deputy Prime Minister Shimon Peres. As Gaza tries to rebuild now that Israel's settlers are gone, a sparkling coastline and bath-warm waters are among the territories' few economic assets. At $722, per capita GDP is lower than Afghanistan's, and 65 percent of Gaza's 1.3 million Palestinians live below the poverty line. Yet according to a recent poll by Norway's Fafo Institute for Applied International Studies, 88 percent of Gazans now expect business to pick up. Could tourism possibly be the answer to these hopes? "It's not an impossible dream," says Nigel Roberts at the World Bank.

At first glance, it's hard to imagine a less appealing vacation spot. Fallujah, maybe? Just two weeks ago, in the middle of the night, gunmen burst into the home of Palestinian security adviser Moussa Arafat and executed him in the street. A surge of kidnappings and militia violence only confirms what Lt. Gen. William Ward, the American official in charge of reforming Palestinian security forces, told the U.S. Congress earlier this summer: the Palestinian Authority's ability to maintain peace and enforce the law "does not currently exist." With militantly Islamic Hamas increasingly gaining ground, Gaza hardly seems poised to become a new Club Med.

And yet, people like Nabil Kafarneh think otherwise. Why shouldn't Israel's 1. 3 million Arab citizens--300,000 of whom vacation annually in Jordan--prefer Gaza's beaches to Tel Aviv or Aqaba, Jordan? "There's a huge market," says Salah Abdel Shafi, a senior partner at Emerge Consulting Group in Gaza. "Before the intifada, our beaches used to be packed with Israeli Arabs. It's a cultural thing--they feel more at home here." And lately there's been concrete grounds for hope. In July, James Wolfensohn, the envoy to the Palestinian territories for the "quartet"--the United States, the United Nations, Russia and the European Union--secured pledges of up to $3 billion for reconstruction.

Some Israelis, meanwhile, are already eying business opportunities. Samuel Flatto-Sharon, a Tel Aviv entrepreneur, has been speaking with Palestinian officials about the prospect of building a 400-room hotel and casino in the former Israeli settlement of Elei Sinai, on the northern border of the Gaza Strip. Palestinians will man the gaming tables, he says: "In one month, these people will know how to deal blackjack. We can make a lot of money." After all, the Oasis Casino in the West Bank town of Jericho did a brisk business before the intifada broke out, employing 1,600 Palestinians and bringing in an estimated $15 million each month.

In conservative Gaza, that vision sits uneasily with realities on the ground. Western donors put up $14 million to buy greenhouses from Israeli settlers that could be turned over to Palestinians. Yet last week, news media were filled with pictures of Palestinians pillaging them--aggravating an already precarious situation where agriculture accounts for only 9 percent of the Palestinian territories' GDP, according to the CIA's World Factbook. (As top "industries," the book also lists "olive-wood carvings" and "mother-of-pearl souvenirs.") Amid warnings that Gaza is morphing into a sort of "Hamastan," as both Israeli and Palestinian officials put it, NEWSWEEK recently spoke with the terrorist group's cofounder, Mahmoud Zahar. Casinos, he said coolly, are "not our style." Nor is "corrupt tourism."

Such threats make the prospect of peeling tourists away from freewheeling Beirut or Dubai something of a pipe dream, at least in the near future. "To have tourism from abroad, people want to drink beer at night," acknowledges the Palestinian Authority's tourism minister, Ziad al-Bandak. Meanwhile, Gaza's beaches beckon, and Nabil Kafarneh dreams on. "I'll build it better than it used to be," he says, standing near the rubble of his seaside nightclub. He'll add a hotel, too. "Five stars." Of course, he has nowhere near the money to start construction. And if he did, what of those "mysterious elements?"