- The Washington Times - Sunday, November 5, 2006

DUBAI, United Arab Emirates

As Israelis and Arabs emerge from the war in Lebanon, a booming diamond exchange in this Arab country 1,300 miles away is hard proof that some Arab-Israeli ties have survived despite the region’s tensions.

The two-year-old Dubai Diamond Exchange has put the Gulf emirate squarely inside a global business dominated by Jewish traders. That inevitably means trade ties with Israel, another world diamond hub.

“There has been no visible platform for Arab-Jewish cooperation since the 1960s,” said Chantal Abboud, Beirut-based representative of Antwerp World Diamond Center, known by the acronym HRD. “Now, Dubai has created it.”

Israeli Diamond Exchange President Avi Paz said diamonds and hospitality flow freely between Israel and Dubai.

“We came there, they came here. There is no problem at all,” Mr. Paz said in Tel Aviv. “I wish that wherever I go, they’ll host me like they hosted me in Dubai.”

Officially at least, the Emirates still enforces some aspects of the Arab League’s boycott with Israel, although a government official said most restrictions were dropped long ago. There are no direct flights to Israel, and visitors traveling on Israeli passports are rarely allowed to enter.

Israel has peace treaties with only two Arab states, Egypt and Jordan. In the Gulf, Mrs. Abboud said, the Emirates is the only Arab country to allow Jewish diamond dealers to visit and trade openly, albeit on non-Israeli passports. Nearby Qatar also keeps discreet ties with Israel.

The 34-day war this summer between Israel and Hezbollah militants in Lebanon dulled sales in Dubai’s diamond markets but only temporarily, industry officials said.

“People don’t mix conflict with business. The war will not affect the diamond trade in any lasting way,” Mrs. Abboud said.

The relationship was highlighted in March when Dubai Ports World assumed the management of U.S. ports. Before American outrage scuttled the deal, the chairman of Israel’s merchant fleet told U.S. senators that his ships called often at DP World-owned ports in Dubai and worldwide, and faced no problems.

The Dubai Diamond Exchange, the Arab world’s first diamond exchange, seeks to serve the largely untapped but diamond-hungry Gulf market — the world’s third largest for diamond jewelry, traders said.

The exchange’s tax-free transactions have encouraged the membership of more than 250 diamond dealers, including Jewish-Americans, Belgians, Indians — even Israelis with dual nationality, said Noora Jamsheer, the exchange’s chief executive.

“Dubai is quickly growing to become a very important center for diamonds,” said Ernest Blom, president of the World Federation of Diamond Bourses.

The Arab-Jewish relations extend across the Atlantic. In June, the largely Jewish New York Diamond Dealers Club on Manhattan’s 47th Street feted Ahmed bin Sulayem, deputy chairman of the Dubai Diamond Exchange, for his contribution to the industry.

Last year, the Emirates became the fifth largest diamond importer from Belgium, with a 49 percent jump in demand. Belgium handles 80 percent of the world’s rough diamonds.

Only the United States, Hong Kong, Israel and Switzerland were ahead of Dubai, according to HRD, the organization representing Antwerp’s diamond industry.

Some view Dubai’s emergence on the diamond scene as a challenge to Antwerp, the traditional center of the world’s diamond industry.

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