DAVOS, Switzerland - The Middle East was back at the center of attention at the World Economic Forum. Images of our president, Moshe Katsav, were splashed all over gigantic TV screens, courtesy of CNN, and no small amount of the chatter was about the series of investigations into Israel's leaders.

The consensus among the foreign businessmen seems to be that Katsav should have quit the moment the investigation into the rape allegations began. At Davos at least, shadowed by the scandals, Israel seemed to be seen as third-world, not a developed nation.

The Israeli business leaders seemed to have the same opinion: Katsav is disgracing the presidency and the nation, and the sooner he quits, the better, freeing the agenda for finer things.

And business leaders we did have there: hi-tech guru Yossi Vardi, big-business barons Idan and Eyal Ofer, real estate magnate Lev Leviev, Jacob Frenkel - former central banker and now vice-chairman at AIG, Eitan Raff of Bank Leumi, Avishay Braverman - academic and now parliamentarian for Labor, and the former Israeli Orit Gadish, who owns Bain & Company.

Voices for peace

But beyond gossip, the Davos participants were concerned with weightier things than Moshe Katsav. It began with a lengthy discussion with the vice president of Iraq, Adel Abdul Mahdi and with the Iraqi parliamentarian Adnan al-Pachachi, and continued in the preparations for the Great Debate between Israeli foreign minister Tzipi Livni and Palestinian chairman Abu Mazen, with the participation of Israeli vice-premier and Nobel laureate, Shimon Peres.

At mid-day an Israeli business repeated a rumor that Abu Mazen hadn't even arrived, but Livni maintained her cool: she evidently knew better.

Al-Pachachi sent pens scurrying when he said that if the Bush administration couldn't handle the burden of Iraq, it should be internationalized by bringing in UN forces, until the Iraqi government is stabilized.

The Iraqi vice president Abdul Mahdi hastened to step in, saying what the Middle East needed was a plan at the regional level that would encompass Iran and Syria as well. The countries involved would intervene in the internal matters of the other countries involved, he envisioned, and settle conflicts in peaceful ways.

Interview with Palestinian business leader

Ahead of the Palestinian-Israeli debate, Palestinian billionaire Munib al-Masri spoke with TheMarker.

The Palestinian economy is in its worst condition in a decade, he said: the proportion of families living below the poverty line has risen by 50% and business collaborations between Israel and the Palestinians are all but nonexistent. But he thinks the problem is political in nature: "It's time to stop missing the opportunities for peace," he says.

From his abode in Nablus, al-Masri runs the EDGO corporation (Engineering and Development Group) headquartered in Amman. The billion-dollar company engages in water, oil and gas, and operates in 21 countries. Al-Masri also chairs the Palestinian Development and Investment Co (Padico), which he estimates is worth half a billion dollars. It owns shares in Palestinian companies, including PalTel, and operates in tourism, property, industrial parks, assets, and services.

TheMarker: How does the business community cope with the chaos in the Palestinian Authority?

Al-Masri: "The situation in Palestine is terrible. We are barely hanging on. The main problem is the occupation, the curfews and the limitations on movement of people and goods. These problems have to be solved.

I meant the internal, political chaos between Hamas and Fatah.

"We hope that soon, an understanding will be reached after Abu Mazen meets with Khaled Mashal in Damascus, and with (Palestinian) prime minister Ismail Haniyah in Gaza. We have reached a line that must not be crossed in internal Palestinian relations.  We should be focusing more on removing the occupation than in internal power struggles, and we should be discussing how to improve the economic situation.

"I hope a unity government will arise. If personal interests are removed from the talks and the national interest takes precedent, it will work. I hope that everybody looks at the national interest. We need an independent country and  an arrangement in which both countries live in peace side by side."

Would a Hamas government, or at least top Hamas figures, recognize Israel?

"I am convinced that everybody would accept that. The Hamas would accept Israel if it sees Israel is serious. They say that Israel works with Abu Mazen as a partner. Israel should give what it has to give and then the Hamas will respond. At present the Hamas sees that Abu Mazen is not achieving a thing, so it is not reacting."