Where the Hell Are You?

Hotels and souvenir shops in the mainly Arab Christian towns are suffering the most. "Nazareth hotels have a 96 percent decrease in room occupancy because all the big hotels are closed, even the three big hotels built for the pope's visit, the Marriott, the Renaissance, and Howard Johnson," Rosenthal says. "Now there are just a few little hotels."

There were 130,000 people working in tourism-geared industries last year—from guides, waiters, and souvenir vendors to diamond dealers and swimwear manufacturers. Some 60,000 have lost their jobs, adding to Israel's 9.4 percent unemployment rate in a workforce of 2.5 million. "Tourism is a big chunk of our economy," notes Rosenthal. "The problem is, we never experienced a crisis like this. We know where it began, but we don't see an end to it."

But the repercussions of the intifada are not only being felt in Israel. Unemployment has soared to over 50 percent in the West Bank and Gaza because Palestinians can no longer reach their jobs in Israel. Their economy is in deep recession, and experts predict it will shrink by at least 8 percent instead of the hefty growth forecast last year.

"Israel is one of the strongest tourist destinations in the world," Rosenthal insists. "It is the cradle of history, holy to three religions. The pyramids, Petra, and Jerusalem is a very strong package. We have the past and we have the future, but our problem is in the present.

"The Americans should understand what we have understood for years," Rosenthal adds."Life has to go on. We shouldn't let terrorists stop tourism, because that is what these people want."