| ACRE, Israel
ACRE, Israel Israeli President Shimon Peres called Monday for reconciliation between the Arabs and Jews of Acre, where five days of rioting exposed deep-seated tensions and raised fears of a nationwide chain reaction.
"Try to live together despite your differences. There are two religions but there is one law for all," Peres told Arab and Jewish religious and political leaders in the northern coastal city.
Trouble began in Acre last Wednesday when youths attacked an Arab who drove into a mainly Jewish neighborhood, disturbing the start of Yom Kippur, the holiest day in the Jewish calendar during which many Jews fast and abstain from driving.
When mosque loudspeakers spread word of Jewish youths beating an Arab, Arab crowds rioted, damaging cars and shops. Jews set fire to two Arab homes and damaged nine others.
"Fortunately, nobody was hurt, nobody was killed," said Peres, congratulating some 700 police who battled to restore calm while the rest of Israel held its breath.
Sixty years after Israel was established in what was then Palestine, one in five citizens is Arab. Many say they feel treated as second-class.
In Acre, Arabs make up 28 percent of the population, many living in separate districts but doing business daily with their Jewish neighbors. Some Arab families in Acre now demand to be relocated.
Despite the police presence, the marketplace in the ancient walled city, where Jews and Arabs usually mingle, was empty.
"I usually sell 30 baskets of fish a day. Since the riots started, I've hardly sold one," said trader Ahmed Zakkour.
The Arab driver who drove into the Jewish neighborhood on Yom Kippur, Tawfik Jamal, appeared Sunday before parliament's Interior Committee, saying he "just wanted to get home."
"It was a mistake and I want to apologize," he said.
But Aviva Gilad, a Jewish councilman, insisted that Acre "is a Jewish town and we want Arabs to respect our holiest day."
Israeli Prime Minister Ehud Olmert, who warned recently of mounting violence by Jewish hardliners, blamed extremists on both sides for the riots.
Israeli and Palestinian leaders have agreed in principle on a peace settlement for the Middle East which would create a state next door to Israel for the 4 million Arabs of the West Bank and Gaza. But hopes of any deal soon are dwindling.
Instead there is renewed talk of a single, "bi-national" state for both Jews and Arabs. Israeli leaders fear incorporating the Arabs would mean the end of the Jewish state.
Critics of Israel argue that its occupation and settlement of Arab land captured in 1967 give Palestinians little prospect of a real state, and poison relations with Arabs inside Israel.
"We managed to calm the Arab public and we expect Jewish leaders to do the same. But this has not happened," said Acre councilman Salim Najami.
"The riots were carried out by thugs. Of course there is coexistence in Acre," he added. "I live in an building where four apartments are owned by Arabs and four are owned by Jews."
By the Old City gate, Jewish scouts set up a peace tent and Arab pupils adorned it with slogans calling for co-existence.
"We came here to show that there aren't only extremists in Acre and that Jews and Arabs can live together," said Itay Yehudai, 26, of the Shomer Hatzair scout group.
But there are fears that extremists on both sides will try to exploit the violence for political gain.
The Islamic Movement, whose offices Israeli police recently raided over alleged ties to Palestinian militant groups, has offered financial support to Acre's Arab residents.
And on a main street in the Jewish neighborhood, posters of leaders of the far-right "Israel Our Home" party, which views Israel's 1.5 million minority Arab citizens as a threat to its Jewish character, could be seen dangling from verandas.
"When extremists fight, innocent people suffer," said Gilad.
(Editing by Douglas Hamilton and Mark Trevelyan)