Tel Aviv is the most expensive city in the Middle East, an annual survey reported Monday, naming Moscow the costliest city in the world.

Tel Aviv ranked 17th in the study of 143 cities on six continents, coming in just two places behind New York.

Mercer Human Resource Consulting's 2007 Cost of Living report, which measures the cost of 200 items such as housing, clothing and food, showed that Middle East cities in the United Arab Emirates such as Dubai and Abu Dhabi slumped largely because their currency is pegged to the ailing US dollar.

New York remained the most expensive city in North America. But it dropped five places to 15th on the overall list.

The authors of the study cited the high cost of accommodation and a favorable exchange rate against the US dollar as the key factors behind Moscow's continued dominance of the annual cost-of-living survey. London rose from fifth place in 2006 to second place on similar factors, the weakening of the dollar and property rental prices.

The significant changes in the 2007 study were "primarily due to exchange rate fluctuations - in particular, the weakening of the US dollar and strengthening of the Euro," said Mercer senior consultant Rebecca Powers.