"I'm working on something really big," Ilan Elkayam, the CEO of Plug Productions Generator, told Haaretz at the end of July. Attempts to get more out of him simply produced an even more mysterious answer: "We're not talking about a performance by Bruce Springsteen in Israel, but something much bigger than a Springsteen, Red Hot Chili Peppers or Madonna concert. In another week the entire world will know."

A week passed and the official announcement hit the world press: The American Lollapalooza music festival is coming to Israel next summer. Lollapalooza Israel will be held on August 20-22, 2013, in Tel Aviv's Yarkon Park. It will be the first international music festival held in Israel, and dozens of foreign artists and musicians, some very famous, others not, will take part. The list of acts will be released toward the end of the year.

Lollapalooza was founded in 1991 in Chicago by singer Perry Farrell as a farewell tour for his band Jane's Addiction (which later got back together and appeared in Israel last year ). Farrell said he was excited about how the event had expanded around the world. The festival ran every year from 1991 to 1997, took a break for five years and restarted in 2003. Israel will now join Chile and Brazil as the event's third location outside the U.S. festival's site - Chicago's Grant Park.

Lollapalooza Israel is being produced and promoted by Plug Productions Generator and NMC United, an Israeli home entertainment and music distributor and publisher. The Israeli producers say they expect the festival to be more than a one-off; they plan on it becoming an annual tradition.

The Brazilian and Chilean versions are limited compared with the Chicago original; still, appearing in Chile in 2011 were acts like Kanye West, Jane's Addiction, 30 Seconds to Mars, the National, the Drums, the Killers, Los Bunkers, Deftones, Cypress Hill and the Flaming Lips. This year Bjork, Foo Fighters and Arctic Monkeys appeared in Chile.

Lollapalooza tries to offer a wide mix of genres including alternative rock, heavy metal, punk and hip hop, as well as dance, comedy and crafts. It also provides a platform for nonprofit and political groups.

When the announcement that the world's third largest music festival was coming to Yarkon Park hit the media, it sailed a bit under the radar. The news came as the newspapers were filled with speculation about an attack on Iran - a media frenzy that reached its peak last month and added to the feeling that the Lollapalooza news was too good to be true.

2012 will probably be remembered as one of the best years for Israeli music fans. A number of artists canceled shows for political reasons, but compared with previous years these were few and far between. The offering of foreign artists was impressive: Big names such as the Red Hot Chili Peppers, Morrissey and Chris Cornell; and smaller indie and non-mainstream performers such as Of Montreal, the Walkmen, Brian Jonestown Massacre and the Afghan Whigs. And don't forget Madonna.

But all these names don't add up to a real music festival, which Israelis have had to fly to Europe or America to experience. If Lollapalooza does come off next summer, it will set a precedent for the Israeli music scene, notes Marc Geiger, a vice president of William Morris Endeavor Entertainment and one of the festival's founders.

But some here have their doubts about whether NMC and Plug can pull off the enormous enterprise. The two companies have little experience in concerts and festivals with tens of thousands of fans. And Lollapalooza has its own special culture: Most performers are considered alternative rockers.

Industry sources say the announcement was made this summer because it would let the promoters start looking for sponsors. This would give the producers time to gauge the reaction of the public and investors - and see whether a profit could be made from Lollapalooza Israel. An industry executive said such an event would need huge sponsorships, and in the end would not prove profitable. He said the organizers needed around $4-5 million in sponsorships, and a ticket would cost about NIS 500. "I don't think these amounts will draw a big crowd," he said. "For the festival to make a profit, they need about 30,000 people to come every night to Yarkon Park. I can't see that happening."