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In the middle of the conversation in the spacious CEO's office at the Palestinian National Beverage Company in Ramallah 10 days ago, Zahi Khouri's mobile phone danced on the table. It was M., from the Palestinian Standards Institute, calling for a worried consultation: He had to go to Jordan, but what should he do if they did not let him back into the country?

Khouri has received many similar calls over the past two months from finance and business people who have already been denied entry. These are individuals who were always encouraged to settle in the territories by organizations like the World Bank, the U.S. State Department and Department of Commerce, and donor countries.

Khouri is a Palestinian and a U.S. citizen. He was born in Jaffa in 1938. "We left during the nakba," he says. Since 1948, he has lived in Lebanon, Germany, South America, the Gulf States and the U.S. He returned to live in the country after the Oslo Accord, convinced that a state would be built through investment. Like tens of thousands of other Palestinians, he lives here as a tourist, renewing his visa every few months. It has been this way for years: Israel retains the sole authority to grant residency and identity cards for residents of the occupied territories. Until 2000, Israel issued permits only to a few hundred of the tens of thousands who sought to return to live in their homeland each year. After 2000, this too was halted. The renewal of visas every few months was a kind of compromise.

That never bothered Khouri. He is one of the biggest investors in the territories, whose business interests require frequent trips abroad. In the U.S., he invests in real estate and restaurants. He is a partner in the National Beverage Company, the franchisee for Coca-Cola in the territories. He is a partner in two of the most powerful Palestinian companies: the Palestinian Development Investment Company (PADECO) and the phone company Paltel. He is a member of the Palestine International Business Forum (PIBF), alongside Palestinian, Israeli and Swedish business people. The PIBF, of which Khouri is first in the list of founders that includes Israeli business giants Benny Gaon and Dov Lautman, hopes to improve the business environment in the Palestinian Authority and the region.

Silicon Valley or Mogadishu

Since Hamas won a majority in the Palestinian parliament, Israel has begun denying entry to Palestinians in the same situation as Khouri. No border official has yet denied entry to Khouri, but about a month ago on his return he was shocked to find he had been issued a visa for a week instead of three months.

Khouri knows who to call in the Civil Administration to set things right. "I am under the impression that there are people in the Civil Administration who sincerely want to see people involved here in economic development for a simple reason: These people create jobs, which is an important condition for reducing violence." Khouri's intervention helped in the case of a senior PADECO director who had invested some $300 million in the territories but was twice denied entry at the border.

According to Khouri, the Civil Administration said it was a matter of an "administrative misunderstanding." These procedures have always been on the books, they explained, and are only now being implemented. In other words, border officials were always meant to refuse the continual re-entries of Palestinian tourists or tourists heading for the West Bank.

Khouri does not welcome the special treatment he receives, "while other good Palestinians are being required to leave Palestine." According to Khouri, "when a Palestinian state is established alongside Israel, it will not be in Israel's best interest for Silicon Valley to have Mogadishu next to it. If the intention is transfer - that will not happen. If the idea is to leave poverty-ridden neighborhoods here, that will not help Israel. Israel must come back to its senses. The world is afraid to criticize Israel, that is why it gets away with any policy, even if it hurts its own interests."

Brain drain

Even if individual solutions have been found for a few Palestinian business people denied entry at the border, Khouri says the new Israeli policy hurts them. "It adds an element of demoralization, it makes things difficult for those whose spouses are not Palestinian and are denied entry," he says, adding that "Israel is chasing away all the moderate elements in the society, creating yet another obstacle for investors. People will pack up and leave. That's how Israel encourages a brain drain and radicalization." Khouri has warned senior Jordanian officials that the situation goes against the principle of reciprocity when Jordanian citizens are not permitted to enter while "every hooligan and Israeli businessman gets a visa to Jordan at the border."

Khouri wrote a letter to Secretary of State Condoleezza Rice, not only about business people but also about all the Palestinians with foreign citizenship who are being denied entry by Israel. He has spoken with American diplomats, who gave him the impression that Rice was shocked. As far as he knows, the U.S. Consulate is working on it.

He still has not spoken about the matter to Prime Minister Ehud Olmert, who he has met a few times. "Once his head gets clearer, I'll meet him and tell him. I'm sure he is unaware of this lack of logic," he says.