As'ad Halul, a garage owner from the Galilee village of Gush Halav (Jish), doesn't understand what people want from him. Two years ago, he decided to stop paying rent for the building which housed his garage, but instead bought land in the village to build a bigger repair shop there.

But council head Henri Alam began persuading him to build his new garage not in the village but in the Dalton industrial park, in which the Gush Halav local council is a partner. The lobbying went on for several months, until Halul finally agreed. Two weeks ago, "the bombshell was dropped," as Ghalem put it. At a meeting with representatives of the Industry, Trade and Employment Ministry, the Israel Lands Administration, and several northern industrial zones, it turned out the land belongs to the Jewish National Fund, and therefore, cannot be allocated "to anyone who is not Jewish, and any such allocation requires exchange between local authorities," as a letter sent to the local council stated.

"I was told they can't give to everybody," Halul said. "I didn't understand what they meant, Arabs? Gush Halav residents? I'm sick of this story. I've been in this for close to two years. I was pressured to move there, and I consented. I'm angry and disappointed... I planned to build a large garage, to develop. Now I'm told I have to wait for a solution. Till when?"

Ghalem said he was shocked by the decision. "This fell on me out of the blue. I was in shock," the council head said. "So many official bodies accompanied us in setting up the industrial zone... How come nobody drew the council's attention to this issue, and we find out only at the end of the process and by chance?"

He needs a solution fast. Gush Halav's master plan calls for factories and workshops to be relocated soon. The solution that is emerging is for the JNF to transfer the land to the ILA in exchange for other land. That would make the area part of state-owned lands. But this could take time, leaving Gush Halav's industrialists in the lurch.

The master plan, approved yesterday, portends change for the village - a change spurred partially by the thousands of hikers who visit the area every year. The village of 2,800 residents is nestled in breathtaking landscape. The area offers visitors the Gush Halav stream, nature reserves and forests, graves of pious rabbis, a synagogue, and the remnants of a Jewish community from the Second Temple period.

The close-knit ties between the village's two communities, 65 percent of whose residents are Christian (mostly Maronite) and the rest Muslim, add to the peaceful atmosphere. Hence the decision at the heart of the master plan to remove industry from the village and move it to the nearby industrial zone, making way for tourists.

The highly successful Dalton industrial zone was built in 1999 in a partnership of four local councils: Merom Hagalil, Safed, Gush Halav and Mevo'ot Hermon. The existence of this joint industrial part was a major factor in formulating Gush Halav's master plan, which was prepared with input from many bodies, including the ILA, Interior, Industry, and Tourism ministries, Israel Nature and National Parks Protection Authority, and the Antiquities Authority. The steering committee recommended basing the plan on moving industry to Dalton and rezoning the village's industrial area for housing and tourism.

"This is nonsense of the State of Israel. It's an outrage," said Salomon Vilensky, director of the Dalton industrial zone. "This type of thing is enough to drive you crazy. It's terrible. Guys from Gush Halav take entrepreneurship courses, suddely there's this nonsense and riling up feelings of anger and discrimination. They were the first to make a joint industrial zone with Jews, suddenly people come and destroy everything."

The Industry Ministry said the matter is under review.


The story of As'ad Halul is one of the reasons Attorney General Menachem Mazuz decided yesterday that all land managed by the Israel Lands Administration, including land owned by the Jewish National Fund, will be marketed without discrimination or limits including to non-Jews.

The revolutionary decision followed a discussion held in Mazuz's office attended by senior members of the state prosecutor's office and the legal advisers to the JNF and the ILA. The ruling was made in preparation for the state's response to High Court petitions filed on the matter.

The state prosecutor's office believes it will not be able to defend before the High Court the policy of allocating Jewish National Fund land to Jews only. Within the next few weeks, the state is supposed to inform the High Court of its position on petitions filed against the Israel Lands Administration, which prevents non-Jews from participating in tenders for JNF land.

Haaretz has learned that senior members of the state prosecutor's office believe that the policy is unreasonably discriminatory against non-Jews, and will be very difficult to defend in court.

In August and October last year, three petitions against the policy were filed with the High Court. The petitioners - the Arab Center for Alternative Planning, the Association for Civil Rights in Israel, and Adalah: The Legal Center for Arab Minority Rights in Israel - charge that the policy is flawed and runs contrary to the fundamental principles of Israel as a democratic state, and first and foremost, the principle of equality.

Mazuz said at yesterday's meeting that the state could not defend the discrimination against Arabs in the framework of the marketing of JNF land by the ILA. Nevertheless, in order to preserve the original designated purpose of the JNF, which is formally defined as an organization working "on behalf of the Jewish nation," and in the name of the interests of the Diaspora Jews, it was decided that if any ILA tender for land owned by the JNF is won by a non-Jewish citizen, the ILA will transfer alternative land to the JNF.

This arrangement, say Justice Ministry sources, will achieve two objectives. On the one hand, it will preserve the principle of equality and cancel the discrimination against Arabs. On the other hand, the JNF will retain its current quota - some 13 percent of state land - and this land will continue to come under the JNF's principle of using this land "for the purpose of settling Jews."

Yesterday's discussion culminated in a decision to set up a joint state-JNF team to work out the finer details of Mazuz's decision. The team is expected to submit its recommendations within 90 days, and the state prosecution will then submit its response to the High Court petitions.

Justice Ministry sources said that in light of the attorney general's decision, the state prosecutor's office is likely to argue that the petitions are superfluous and should be rejected, subject to the fact that from now on any citizen can participate in an ILA tender for acquiring land or purchasing a housing unit.

The JNF, which is wholly owned by the World Zionist Organization, was established in 1901 and has since been collecting donations from Diaspora Jews for the purpose of purchasing land in Israel. The JNF leases the land to Jews only, in keeping with the fund's regulations.

Since 1961 JNF land has been marketed by the ILA, a state-run entity that manages state land. In contrast to the practice with regard to other state land, non-Jews are currently prohibited from participating in ILA tenders for leasing JNF land.

After the petitions were filed, senior members of the state prosecutor's office informed the heads of the JNF and ILA that it would be very difficult to defend the policy in court.

JNF sources have accused the state prosecutor's office of giving in to post-Zionist trends, and too easily waiving the principle that the State of Israel is the state of the Jewish people.

The JNF published a survey last week that shows that more than 70 percent of the Jewish public in Israel is opposed to allocating JNF land to non-Jews, while more than 80 percent prefer Israel to be defined as the state of the Jewish people and not the state of all its citizens.