Ofir Lipsky, 27, insists that he doesn't deal in porn, a somewhat strange statement, considering that he is one of the two owners of Hafuz (http://www.hafuz.co.il) one of the leading porn sites in Israel.

But Lipsky makes his own distinctions, and he divides the Israel sex market into mainstream and marginal. The mainstream sites supply surfers with links to foreign porn sites, but don't have anything to do with the people involved; whereas the marginal sites (like Parpar 1) produce the content themselves. "I want you to understand," says Lipsky, again and again, "we got to porn from the Internet, and not vice-versa. It's only a business for us. I have no connection to porn, nor do any of us. I have had a girlfriend for eight years, and I'm not some Tel Aviv gigolo."

He emphasizes that Hafuz will never create original material, but will only market the work of others. It's only a business - "we won't have any physical involvement with girls."

Lipsky and his partner established the site about two years ago, when, he says, there was a vacuum in Israeli porn on the Internet. Before that he worked for a start-up, which has since closed. Asked about the essential difference between the two jobs, his answer reveals that for him, the difference lies in Lipsky's higher status in the hierarchy of his new company.

The basic structure of the leading Israeli sex sites - Hafuz, Anat's world of sex (http://www.sex4free.co.il) and Peep (http://peep.co.il) - is very similar: All offer links to galleries of foreign films and pictures, which are packaged in more or less specific categories; all describe to the surfer what he will find; all boast of a "surfers" column to which local surfers can send their pictures; all preserve the same ethical code (no pedophilia and rape, but with animals and bondage), and all are based on a similar business model: income is derived from advertising, from erotic phone calls and from online commerce.

Lipsky claims that the dot-com crisis doesn't affect small businesses. Hafuz became profitable a year ago, he says, but still hasn't reached its goal. Hopes are high for a new store on the site, which was begun almost at the same time as a competing store at Anat's world of sex.

Erotic phone calls are the latest innovation in the local industry. Someone calling one of the numbers at a sex site is not charged for service as in the period of the 056- numbers, but only for air time for a call to a cell phone. The cellular phone companies, which understood that it would be good for business, were happy to cooperate, and the income from air time is divided among all of them. And the sums are not negligible: There are people who listen to the recorded moans of phone-sex girls for many hours each month.

The sites clearly are targeted for a male audience, as men watch much more porn than do women. Lipsky divides the gender use of his site "80 percent versus 20 percent."

The most popular categories on the site are "pictures of surfers," "gays," and "young girls."

"Porn promotes the Internet," Lipsky says, quoting a well-known economic fact, "and the industry, through the medium and through globalization, raises the stimulation threshold of the user. At one time, for example, there was no anal sex."

But the stimulation threshold, as high as it may be, has not yet caused any Israeli Web site operator to violate the taboo regarding pedophilia and rape. Site owners declare that they do not provide links to such sites. For the average surfer, it is not easy to find such sites on the Internet, because anyone who forces children to participate in porn film, or films snuff, doesn't put his wares on the Internet like everyone else, but as a member of an underground. Commerce in such films and pictures is done deep inside discussion groups with a protected password.