NAZARETH — During the Christmas season, Nazareth briefly appeared to be a city recovering. Holiday celebrations returned, visitors arrived, and businesses saw movement they had not felt in years.

But as the holidays ended, so did the illusion. In mid-morning, the Old City lies silent — green shutters bolted over market stalls, trash piling up in the alleys — and the deeper political and economic crisis facing Israel’s largest Arab city remains unresolved.

“It used to be alive,” says Sami Jabali, owner of the Liwan Café — one of the few businesses still open in the maze of arched stone lanes. “Now almost everyone has closed again. No tourists, no locals — nothing.”

After Israel’s founding, Nazareth transformed almost overnight from a quiet pilgrimage town into the political heart of Arab society inside the new Jewish state — the city where Arab citizens first built independent political institutions and asserted a measure of self-rule. But this summer, after years of friction between the Nazareth municipality and the Interior Ministry, the government dissolved the city’s elected council and appointed a state-run committee in its place.

Officials said the move was needed “to stabilize and rehabilitate” the municipality, citing financial crisis, administrative paralysis, and rising crime. For many residents, though, it symbolized more than municipal failure — it marked a retreat from the experiment of Arab self-governance within a Jewish state, sharpened by a climate of fear and polarization in the shadow of the October 7, 2023, Hamas atrocities and the subsequent war in Gaza.

Jabali gestures toward the shuttered Old City market where his café doubles as a small cultural center.

“This market used to be the soul of the city,” he says. “It never fully recovered after years of reconstruction and neglect.”

When he opened the Liwan Café in 2011, a brief period of revival took root — art studios, craft shops, and visitors returning to the Old City. But the pandemic’s hit to tourism and the October 7, 2023, Hamas-led massacre and subsequent two years of war have quietly undone that fragile revival.

“Most of the shops that reopened after COVID have closed once more,” Jabali says. “Only a handful of us are still holding on.”

The Christmas season offered a partial and temporary change. According to Suheil Diab, former deputy mayor of Nazareth, the holidays brought a surge of activity unlike anything the city had seen in the past three or four years, which were disrupted by the COVID-19 pandemic and war. On peak days, he........

© The Times of Israel