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Suddenly Umm al-Fahm, the Arab town which since October 2000 has been mentioned exclusively in relation to security matters, has found a new way into the public limelight - "Route 65 is jammed in both directions from Umm al-Fahm junction up to Megiddo junction," Israel radio reported last Saturday night.

Such reports have become typical.

The Eron exchange from Route 6, which opened a few months ago, has breathed new life into Route 65, the Wadi Ara highway, and during these summer months, the route is often packed solid with cars.

Yet the changes have not been wrought entirely by Route 6, the new Trans-Israel Highway.

The separation fence, which has been built over the past year in the east, has created a quiet revolution in the daily life and economy of Wadi Ara.

The facts seem simple - during the months since the fence's construction, the local stretch of the separation fence has brought quiet to the area, a region rattled by the events of October 2000 and by subsequent suicide bomb attacks.

In Israel, as elsewhere in the world, the most elementary rule of sound economics is security - where there is no terrorism, economic activity starts.

And for places of business located on the both sides of Route 65, such as El-Babor Restaurant at the entry to Umm al-Fahm, the separation fence and Route 6 are a welcome mix, bringing new customers and increased business.

Signs of economic recovery in Wadi Ara are not the fruit of a strategic plan to reduce poverty, or a development plan for the Arab sector.

While the level of economic activity in Arab towns continues to lag behind that in Jewish ones, there have of late been clear signs of economic upsurge in Arab communities.

New businesses are primarily replacements for Palestinian markets which, after 1967, served Israeli Arab residents from the Triangle. Now such markets have slipped out of reach, behind the separation fence.

Helmi Kittani, Director of the Jewish-Arab Center for Economic Development, relayed had encouraging data yesterday.

He said 260 to 280 places of business have been established since the end of 2000 in Arab towns between Umm al -Fahm in the north, and Tira in the south.

Most of these - up to 80 percent of the businesses - were opened in the past 18 months.

The new businesses, Kittani said, derived from the separation fence.

Ties with Palestinian markets started to unravel in 2000, he said, "but in the beginning there was a belief that this [separation from Palestinian products] would disappear. When they started to build the separation fence, people saw the barrier was here to stay, and they decided to capitalize on economic opportunities."

A year after the completion of the northern stretch of the separation fence, economic experts and leaders from local Arab communities are divided as to whether the separation of Israeli Arab communities from Palestinian counterparts will necessarily stimulate long term growth in Triangle towns and villages.

Some skeptics claim that economic decline continues among Israeli Arabs, and the data about the opening of new businesses merely reflect a situation in which a few entrepreneurs have found a way to make a living in a stagnant, depressed setting.

For their part, local Jewish residents do not appear to frequent many of the new businesses that have opened in the past 18 months.

Whatever the level of recovery in the local Arab economy, it remains foreign to Jewish residents.