While Arab Jerusalem lags far behind the western half of the city, suffering from unequal municipal services and the lack of a zoning plan leading to widespread illegal construction, two new commercial projects along the downtown's main drag Salah a-Din Street suggest that reality is changing. The first is a nine-story east Jerusalem eyesore that has stood derelict since the 1967 Six Day War and which will now finally receive a building permit allowing the structure to be finished - much to the delight of the hotel project's owner, Muhammad Nuseibeh. At a recent meeting at Kikar Safra with Shlomo Eshkol, the Jerusalem municipality's chief engineer promised the hotelier that a permit would be issued shortly, pending paperwork, for the unfinished building at the corner of Salah-a-Din and Isfahan streets in downtown east Jerusalem. "It was a very constructive meeting. The city finally agreed to accept the Jordanian [construction] permit," smiles Nuseibeh, the scion of a prominent Jerusalem clan. His father, Zaki, served as a member of Jerusalem's Mandate-era city council until his death in 1938; his late brother Anwar was the director of the East Jerusalem Electricity Company; and his nephew Sari is the rector of al-Quds University. Now named the Addar Panorama - Nuseibeh owns the nearby Addar Hotel - the project will include a 20-room boutique hotel on the upper floor, a three-level shopping mall, five floors of offices and a 32-car underground parking garage - the first in east Jerusalem, explains Samer Nuseibeh. The project's general manager and son of its owner studied to become a construction engineer at University College, London. "I had to wait 42 years so my son could help me," jokes Nuseibeh Sr., who studied civil engineering at Britain's Sheffield University. The Addar Mall is hardly a conventional construction project. The landmark ruin, which one of Nuseibeh's nephews calls "the unfinished symphony," will be completely retrofitted to meet current safety codes. As well, the building's distinctive curved balconies will be replaced by a glass curtain wall with Jerusalem stone masonry. But its McDonald's-esque arch will be preserved as a touch of Sixties style. In the future, the project may apply to the district planning committee for a variance permitting a roof garden, adds Samer. As the building was nearly completed when the Six Day War broke out, the Nuseibeh family planned to name the hotel The Dome in reference to the striking view of the Old City and Haram ash-Sharif from its upper floors. "The infrastructure was done. The interior had been partitioned into rooms. The windows were in. The plastering had even been done," Nuseibeh recalls, sitting in his office at the Addar Hotel. "And then the  war started." After the Israeli conquest of Jerusalem, the Jordanian administration was disbanded and Nuseibeh found himself dealing with a newly amalgamated municipality. He made some efforts to complete the project, but once again warfare got in the way. After the 1973 Yom Kippur War, tourism plunged and Nuseibeh put the project on hold. "At the urging of [then mayor] Teddy Kollek, we tried to get the zoning of the building changed to a hospital," he relates. The structure would have replaced the facility in the Austrian Hospice in the Old City, which was established as a military hospital in 1948 by King Abdullah's Arab Legion. Later converted to a civilian hospital by the Jordanian government, in 1985 it was closed on sanitation grounds and handed back to its Austrian owners. "But this [hospital] didn't go through because funding was not forthcoming from Amman and the Arab world," continues Nuseibeh. During the first intifada in 1987, the building became a sanctuary for stone-throwing youth, who would attack police and then retreat inside. As a result, the Border Police removed all the interior partitions. Later, junkies turned the gutted structure into a different kind of shooting gallery. Nine years ago Nuseibeh decided to again try to complete the project. Together with architect Dan Izraeli and lawyer Arieh Toussia-Cohen, he entered the bureaucratic labyrinth of trying to obtain a municipal building permit. "I had a Jordanian building permit, but now I was told that I needed one from the Jerusalem municipality," he says. "However, my application for a new permit was rejected." "My client was asked to produce his Jordanian permit," states Toussia-Cohen. "Unfortunately, his office burned down, and with it his copy of the permit. The municipality took over the east Jerusalem city archives in 1967 and should have a copy of the permit. But the municipality claims that it can't find the records and keeps asking my client to produce his copy. In addition, the city has said that the area is not zoned. If it is not zoned, then Jordanian law applies. According to Jordanian law, the project is complete the minute the skeleton is finished. So my client should be able to finish it. It would take him less than a year to complete the hotel at a time when the city is crying for hotel rooms," says the lawyer. The Addar Mall and boutique hotel constitute the first major commercial enterprise in east Jerusalem since its annexation to Israel in 1967. Together with the Alhambra Palace, the two neighboring projects reflect the growing prosperity in Jerusalem's 250,000-person Arab sector. "Jerusalem needs stability," says Nuseibeh. Reflecting on his four-decade long struggle, he notes, "It can never be hopeless. We love Jerusalem too much to lose hope." While Muhammad Nuseibeh can blame war, Israel's sclerotic bureaucracy and discriminatory zoning policies for holding up his Addar Panorama hotel project for 42 years, the Alhambra cinema has a more prosaic reason for sitting empty for two decades - changing consumer tastes. But the stories of the Alhambra and the nearby Addar Mall and boutique hotel share an equally happy ending. Built on Salah a-Din Street in 1952 as the only purpose-built movie theater in Jordanian-ruled east Jerusalem, the Alhambra quickly became a cultural fixture in the divided city, screening both Egyptian and Hollywood films. The building's distinctive two-story atrium lobby and soaring glass faÃ§ade were the epitome of modernity for their era. But just as classic cinemas in downtown Jerusalem such as the Chen and the Edison were driven out of business by the mass marketing of videocassette recorders and DVD players, so too the popularity of the Alhambra succumbed to home entertainment. Boarded up in 1989, the landmark fell into ruin. Restoring the derelict building proved to be an irresistible challenge for Jerusalem entrepreneur Munir Kurt, who remembers going to the Alhambra as a child. After a $2.35 million renovation - all raised from private investors without an agora of government or foundation funding - the abandoned movie theater reopened recently as the Alhambra Palace events hall. "It will be like what they call in Beirut 'dinner theater,'" says Kurt, who envisions the state-of-the art facility as a 24-hour culture hub, serving both locals and tourists. The Alhambra's elegant main multi-purpose hall, which can seat up to 420 dinner guests depending on the configuration of the stage, includes an 8x6 meter computer-controlled screen. The stage can be raised 1.4 meters, while theater and special-effects lighting allow for events as varied as a disco, convention or business meeting. A second hall can accommodate 150 people. Both facilities are equipped for video conferencing and simultaneous translation, Kurt notes. Valet parking accommodates 50 cars. A coffee shop is slated to open this weekend. "We've been in a soft opening since June," he adds. Indeed, workmen are still adding the finishing touches to the events hall. Kurt, who studied chemical engineering at Clemson University in South Carolina and lived in the United States for 15 years, decided to return to his native Jerusalem after the signing of the 1993 Oslo Accords. Arriving the following year, he discovered limited opportunities for a chemical engineer. Instead, he ended up working at Vienna Florists on Salah a-Din Street, a flower shop owned by his family. Kurt remembers that Nina Katzir used to order flowers weekly for the President's Residence in Talbieh from 1973 until 1978, when her husband, Ephraim, was president. Though decidedly apolitical, Kurt ran afoul of the Israeli government when one of the Alhambra Palace's first events - an exhibition sponsored by the Arab Hotel Association - printed invitations mentioning pro forma the PA's minister of tourism Khuloud Deibes. "There are enough people talking politics in Jerusalem. We're a legitimate private sector business - and that's all," he says.