Kassem says he was excited by discussions with Israeli business executives about cooperation and the possibility of working together on joint projects.
But on the very same day, Ariel Sharon, who was later elected as Israel's prime minister in February, visited the Temple Mount, a site sacred to both Jews and Muslims in Jerusalem, and made comments that enraged Palestinians. While Israelis dispute that the visit was the catalyst, it was one of the events that has fuelled months of violence between Palestinians and Israelis--including a suicide bombing by the Islamic militant group Hamas that killed at least six people at an Israeli shopping mall earlier this month.
Regardless of who is to blame, Kassem says that since the violence erupted "everything has collapsed." His company, Arab Technology Systems, has seen its business go south. Potential investors have backed off, the company is having trouble soliciting new customers, and employees face difficulties travelling to and from the company's office in the West Bank town of Al-Bireh.
"It was an excellent idea, bringing people together, cooperating, opening new markets," Kassem says in reference to his meetings at Comdex. "But unfortunately, things went in the wrong direction."
Nearly eight months of violence in the Middle East is taking an economic toll on the region. While Palestinians appear to be suffering the brunt of the economic effects, Israeli government officials are beginning to worry about the potential impact on the country's vaunted high-tech sector, and are taking steps to reassure investors that the business environment is safe.
It certainly didn't help that the US Department of State issued a warning at the beginning of the year urging Americans to defer travel to Israel, Gaza and the West Bank. The warning forced some foreign business officials, who must adhere to such warnings, to avoid visiting Israel.
Most Israeli industry and government officials insist the impact so far has been marginal, and that the downturn in the US economy is having a greater effect. They say business goes on despite the violence, which for the most part is confined to the Palestinian-controlled areas of Gaza and the West Bank. The attributes that have attracted billions of dollars in foreign venture capital to Israeli technology companies, such as a skilled work force, remain intact, says Ron Chaimovski, Israel's economic minister for North America.
"One may ask a reasonable question: Is Israel still a good place to do business in? The answer is definitely yes," Chaimovski says. "Our high-tech economy is still booming... Life is not as is seen on CNN. Our economy continues."
And yet business leaders also say some investors--particularly first-time investors--have expressed some reluctance to invest in Israeli companies, given the political instability. Last month, Israeli Finance Minister Silvan Shalom acknowledged during an interview with the Associated Press that the government is concerned that "foreign investors no longer want to come and invest here because of the intifada," the Palestinian uprising.
