A Mideast Valley of Peace

Itzhak Tshuva was born into a poor family of 11 who crammed into a single room after immigrating to Israel from Libya in the 1940s. He went on to build a global real estate empire that includes New York's Plaza Hotel, as well as a recently announced $8 billion luxury hotel, retail, residential, and casino complex on the Las Vegas Strip. Now the 60-year-old billionaire, one of the world's richest men, is spearheading an ambitious plan to bring another desert project to life.

This time Tshuva has set his sights on the Arava, an arid valley along the southern portion of the border between Israel and Jordan. If his vision comes to pass, the private sector will build a $3 billion canal that not only connects the Red Sea to the Dead Sea but also links Israelis, Jordanians, and Palestinians—possibly helping bring about peace through greater economic integration.

This so-called Valley of Peace is part of a 520-kilometer (323-mile) corridor being proposed by Israeli President Shimon Peres for regional economic development. About 420km of the corridor runs along the Jordanian border—with no fences, walls, or minefields—and another 100km touches on the Palestinian territories. Other projects envisioned by Peres involving the German, Japanese, and Turkish governments are meant to create up to a million new jobs in Israel and the West Bank. "People are sick and tired of peace conferences because they don't see the results," says Peres. "Here they can have jobs and make a living."

An Ambitious Vision

The 166km (103-mile) Red-Dead Sea canal is only the beginning. Both sides of the waterway would be developed to include convention and cultural centers, up to 200,000 beds of hotel space, restaurants, parks, artificial lakes and lagoons, waterfalls, and one of the largest botanical gardens in the world. Greenhouses would produce winter fruits and vegetables to be sold in the region and abroad. A high-speed train line and highway would run along the canal, transporting people and goods between the Dead and Red Seas within an hour. The area also could be made into a free-trade zone, attracting investment from around the world.

It's an audacious vision, to be sure, but the question is whether it will ever happen. Engineers have talked about building a canal from the Dead Sea to the Red Sea since as far back as 1858. Some 30 years ago when Menachem Begin was Prime Minister, plans were floated to link the Dead Sea to the Mediterranean, and in the 1990s, after Israel and Jordan signed a peace treaty, a Red-to-Dead Sea canal plan blossomed again. But progress has been excruciatingly slow.

The difference this time is the private sector is getting on board in a big way. Peres has long championed the project as a path to peace through regional economic cooperation. Now people like Tshuva—who owns the El-Ad Group real estate empire and a controlling interest in Delek (DELKG.TA), Israel's second-largest oil and gas company—and Carnival (CCL) cruise line heiress Shari Arison are throwing their support behind it.

Arab Support for the Project

Joining them are Nochi Dankner, chairman and chief executive of IDB Holding, which has interests in telecommunications, real estate, and insurance; Stef Wertheimer, founder of Iscar Metalworking, which sold 80% of its shares to Warren Buffett's Berkshire Hathaway (BRKA) in 2006 for $4 billion; and Israeli businessman Benny Steinmetz, who owns interests in diamonds, high tech, real estate, and African mines.

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