It is said of Israel that she is a mini-cosmos. A country of immigrants hailing from more than 120 countries: fair-skinned and dark-skinned, Chinese and Indian, haredim and atheists. An 80 percent Jewish majority that lives alongside an Arab minority, mostly Muslims, an island in an Islamic sea in the throes of a power struggle between Shi'ite and Sunni hegemony, and counting a population of 7 million spread over an area (sovereign Israel) that measures a mere 20,770 kilometers. The world, led by the United States, is facing a number of challenges that are undermining its very existence and threatening its social fabric: the destabilization of homeland security at the hands of Islamist terrorism and the failure of efforts to democratize the Arab world, in addition to ecological issues and global warming, dwindling water reserves in parts of the world and the risk of their becoming polluted in others, as well as the steep price being paid for dependency on oil and the spiraling prices of this commodity as a result. DUE TO its composition, size, location and borders, Israel constitutes an incubator or, more precisely, a model, which can serve to find solutions for global issues and implement them. Take democratization and modernization: Some 1.5 million Arabs live in Israel. Given that ever since its establishment Israel has been a democratic country that accords full rights to all of its citizens regardless of gender, religion, race or nationality, this has had an impact also on its Arab minority. Israel's Arab sector is tangible proof that there is no in-built contradiction in terms between democracy and Islam. Israel counts over 100 local authorities in the Arab sector: municipalities and local and regional councils that are voted in by democratic elections, with the participation of over 60 percent of the Arab electorate or more. Most of these authorities are situated in northern Israel (the Galilee), where the population is 50 percent Jewish and 50 percent non-Jewish, and southern Israel (the Negev) with a 25 percent Bedouin population. Aside from democratization, the Arab sector is also on the path towards modernization. Over 19,000 Arab students enroll every year in institutions of higher education; a large percentage of doctors and nurses in northern Israel hospitals are Arab, and the Jewish patients have no misgiving in consigning their lives to their hands. Industrial zones are being founded in the Arab sector and at present the Vice Prime Minister's Office (Shimon Peres) is advancing the establishment of joint Jewish-Arab industrial zones. Arab Nazareth and nearby Jewish populated Nazareth Ilit are promoting an initiative to establish a joint academic research complex, and a considerable number of projects are being implemented with government funding to stimulate outstanding achievements among the Bedouin population of the Negev, as are also vocational programs for Arab women. THEN THERE is homeland security: Israel is possibly the only country in the western world that has never requested the American army to fight on her behalf. Not one American mother or father needs to worry about the fate of a son fighting on Israeli soil for its protection. Despite the serious disadvantage of being small in number, Israel is nevertheless able to produce from its ranks brave and highly trained soldiers equipped with state-of-the-art technologies and, above all, motivated by a spirit of justice and moral values. Today, Israel is developing anti-terrorist weapons based on nano-technology (sensors, miniature batteries and communication networks, to name just some) that will at the end of the day be of service to the whole of the enlightened world in its fight against the madness of those who employ terrorism seeking to kill for the sake of killing and destroy for the evil pleasure of destroying. Ecology and alternative energy represent another area where Israel has something to offer the world. Israel has decided to fight waterway pollution and the Ministry for Environmental Protection together with the Vice Prime-Minister's Office are funding extensive initiatives in this field. The latest and most important project is a plan to clean up the Jordan River. Shared by Israel and Jordan, this is a river which, by the way, is richer in public relations than water, and its rejuvenation calls for dialogue between former enemies and a great deal of good will. It can therefore serve as a model of ecology in the service of peace for many a country around the world. Israel's efforts, in cooperation with the Hashemite Kingdom of Jordan and the Palestinian Chairman's Office, are testimony of the advantages emanating from the determination to overcome political obstacles through environmental leverage. ISRAEL, A country that lacks natural resources, invests considerable assets in developing alternative sources of energy, such as solar energy - a whole settlement in the Negev, Darijat, enjoys a supply of electricity generated by a grid of solar heaters deployed on the village roof-tops - and pursues R&D on other energy approaches, among them shale and giant chimneys. Because Israel is to all intents and purposes an island operating within confined borders because of its neighbors, the country constitutes an exceptional experimental site to test electric-generated vehicles. The greatest distance one can drive in Israel is a few hundred kilometers, ideal conditions for the usage of vehicles operating on rechargeable batteries. Israel's meager water resources have turned it into a development center for desalination plants, reducing the cost of water production. Israeli desalination installations have been erected in neighboring Cyprus and similar plants can serve as a solution for the shortage of water in some of the dry Islamic countries. The government has recently erected a special center for water technologies in the Negev which is developing the means of safeguarding water, reducing wastage and leakage, maximizing effective water usage and making other water-related advances. This center is a dream project for every potential investor in this field. ISRAEL THUS constitutes the definitive model for addressing, and finding solutions to some of the major challenges on the global agenda. Israel can serve as a Garden of Eden in identifying advanced solutions for homeland security, ecological issues, rising energy prices and the fight against desertification and water shortages. Our little "mini-cosmos" can benefit humanity as a whole. That's the role we'd like to play and that's the role we should be playing with the right kind of backing from those who share our vision. The writer is the senior strategic adviser to Shimon Peres.