Hundreds of potential investors and dignitaries from the Middle East and beyond gathered here on Wednesday for the start of a vaunted conference under the slogan, “Palestine is open for business.”

The Palestine Investment Conference, scheduled to last three days, is perhaps the most upbeat happening in Bethlehem since crowds packed Manger Square to see 2,000 doves of peace released at millennium celebrations at the end of 1999. Months later, the second intifada broke out, sending the Palestinian national enterprise into a tailspin of violence and chaos.

Now, with the renewal of Israeli-Palestinian peace efforts at the American-sponsored conference last fall in Annapolis, Md., and the international community trying to bolster the Western-leaning Palestinian leadership that holds sway in the West Bank, the business convention — a partnership of the Palestinian Authority and private business — is meant to project a climate of opportunity and change.

Yet the gathering had a contrary air about it, as if Alice had stepped through the looking-glass and found herself here.

Projects worth a total of $2 billion are to be presented, almost half for housing and other infrastructure projects, most of the rest for ideas in agriculture, finance, tourism and information technology. But even among the organizers, expectations for significant investment appeared low. Hasan Abu Libdeh, the chief executive of the conference, told reporters that the meeting was more for “networking, and maybe to strike some deals.”

The overall picture was “contradictory,” said Mohammad Shtayyeh, president of the Palestinian Economic Council for Development and Reconstruction, a Palestinian Authority agency. “Capital is a coward,” he said. “It needs encouragement. The environment in Palestine is not very encouraging.”

Indeed, the hundreds of Israeli Army checkpoints and roadblocks that dot the West Bank, and that Israel insists are necessary for its security, choke the local economy. (Gaza, which was taken over by the militant Islamic group Hamas last June, remains under a tight blockade, its own economy crushed.)

And Palestinian officials have recently offered bleak assessments of the prospects of imminent success for a political solution to bring the Israeli occupation of the West Bank to an end.

“Without a political solution any chance of improvement will evaporate,” said Mr. Shtayyeh, who was scheduled to speak at the conference on Thursday. “Nobody will invest.”

Even the venue for the opening of the conference, the Jacir Palace Intercontinental hotel, serves as a cautionary tale.

Built around a magnificently renovated mansion, it was designed “for V.I.P.’s coming for conventions and conferences,” said Kareem Abdul Hadi, manager of the Palestine Tourism Investment Company, a subsidiary of Padico, the Palestinian offshore holding company that invested $50 million in the project.

But the hotel opened its doors just before the intifada in 2000, turned into a battle zone and closed down for five years. The investors lost $25 million.

Today there is a broad interest in improving the West Bank’s economy. Israel issued nearly 500 special two-week entry permits and visas for participants from abroad, many of them Palestinian expatriates from Jordan and the United Arab Emirates. Over 100 businessmen from Gaza were issued travel permits for Bethlehem.

Attendance was also arranged for a handful of Israeli industrialists, despite some Palestinian qualms about normalizing relations and an Israeli military order that bars Israeli civilians from entering the Palestinian cities of the West Bank.

Official delegations are being headed by, among others, the American deputy Treasury secretary, Robert M. Kimmitt; the British secretary of state for international development, Douglas Alexander; and a member of the ruling family of the emirate of Abu Dhabi, Mohammed Hamdan bin Zayid al-Nahyan.

At a news conference in Ramallah on Tuesday, Mr. Abu Libdeh noted that the “very special” arrangements made for the conference were far from the norm and urged Israel to guarantee future access.

Sam Bahour, an American-born Palestinian who has invested heavily in the local economy, has been campaigning for better access for two years. For the past 14 years, Mr. Bahour, who built Ramallah’s Plaza shopping mall, has been living in the city on a tourist visa that has to be renewed every three months. Mr. Bahour, who is married to a Palestinian, applied for permanent residency in 1994. The Israelis, who control the population registry in the Palestinian territory, have not yet responded, he said.

He estimates that 50,000 Palestinian expatriates and non-Palestinians from all walks of life have been denied access to the Palestinian territories since early 2006.

Still, many, including Mr. Bahour, insist that even under the current circumstances there is money to be made.

The Palestinian Securities Exchange, the small 11-year-old, 36-company stock exchange based in Nablus, is having a banner year. It has grown by 35.9 percent since Jan. 1, more than any other exchange in the Arab world.

Matthew Eyre, who works at Blakeney Management in London, said his investment firm had put money in Padico since the end of 2007 and had seen very strong profits. “When we started, we weren’t making a political call,” he said. “We were simply convinced that the valuations here had become absurdly low. If these companies can grow by 30 percent in such difficult times, what sort of growth will we get in normal times?”