Many of those who have visited this city in the past decade were journalists searching for interviews with gunmen belonging to Fatah's armed wing, the Aksa Martyrs Brigades, or stories related to violence and bloodshed.

In recent months, however, most of those who come to Nablus, once known as the Palestinian's economic capital, are shoppers searching for cheap clothes and fine sweets or a massage at one of the newly renovated 200-year-old Turkish baths.

The shoppers, mainly Israeli Arabs, don't need to sneak into the city by bypassing IDF checkpoints. Their shopping sprees have been facilitated by the army's recent removal of two major checkpoints that used to prevent Israeli citizens from entering cities that are under the exclusive control (Area A) of the Palestinian Authority.

Several other major Palestinian cities in the West Bank have also been playing host to Israeli-Arab shoppers, thanks to an easing of IDF security measures.

The army recently removed the main checkpoint at the southern entrance to Jericho, paving the way for thousands of families to seek relatively cheap rooms in the city's five-star hotels and resorts.

Despite the apparent boom, the Palestinian economy is still in far from good shape. High unemployment rates remain one of the major challenges facing the PA government. Unemployment in the West Bank is estimated at 20 percent. (In the Gaza Strip it is believed to be over 35%.)

Some Palestinians said that improved security inside the PA-controlled areas has also played a role in boosting the local economy.

"The masked gunmen have disappeared from the streets," boasted a senior PA security official in Ramallah. "We are implementing a zero-tolerance policy toward lawlessness and anarchy."

The relative calm has encouraged the building of malls, cinemas and other projects in many cities, signaling what many Palestinians hope is the beginning of the return to normal life.

Moreover, the growing sense of security has attracted local and foreign investors, who said that what's happening in the West Bank these days reminds them of the optimism that prevailed immediately after the signing of the Oslo Accords more than 15 years ago.

"Lawlessness and anarchy have always scared potential investors," remarked businessman Mazen Alawi. "We hope that the international community will continue to support the government of [Prime Minister] Salaam Fayad. We also hope that Israel will continue to remove checkpoints and ease restrictions."

It thus appears that the Palestinians have chosen not to wait for Prime Minister Binyamin Netanyahu or the Quartet's Middle East envoy, Tony Blair, to strengthen their economy. Instead, they have been taking matters into their own hands, investing tens of millions of dollars in various projects throughout the West Bank.

On Wednesday, thousands of Palestinians took to the streets here to celebrate the Nablus Shopping Festival. Organizers said they were hoping to attract more than 500,000 people during the month-long event, which is reminiscent of carnivals and festivals that take place in Brazil and other Latin America countries.

The organizers said that in addition to cultural events that include music and dancing, they were also planning to prepare the largest knafeh pastry sweet in the world. Nablus has long been famous for its knafeh, which is made of noodles and honey-sweetened cheese.

"This is a very special day for Nablus," said PA-appointed governor Jamal Muhaisen. "Indeed, the economic situation today is much better."

Muhaisen said he hoped that the festival would bring tens of millions of dollars to the local economy. He said similar festivals were scheduled to take place in most of the major Palestinian cities in the West Bank.

Basel Kana'n, chairman of the Nablus Chamber of Commerce, expressed satisfaction with the improved economy.

"Yes, the situation today is much better," he said, adding that thousands of Israeli Arabs converge on the city on weekends as part of organized tours for shopping and entertainment.

Only a few weeks ago, he noted, two local businessmen, Marwan al-Masri and Bashir Shaka'a, inaugurated Cinema City, the first movie theater to open here in 22 years. The two invested $2 million in the 175-seat cinema.

Ghassan Shaka'a, a former mayor of Nablus and member of the PLO Executive Committee, said the opening of the cinema reflected the growing sense of security in PA-controlled areas.

"People are more confident thanks to the law and order imposed by the Palestinian security forces," he said. "Today more businessmen are willing to invest in Palestine because they feel more secure."

Once notorious as a terrorist hotbed, the Casbah (Old City) also seems to be enjoying the fruits of the economic boom.

Scores of Palestinian men flock to the area every day to enjoy hot steam and a massage in one of the two Turkish baths inside the Casbah. Customers are also provided with light meals, nargilas and free mint tea.

"It's like being in a different world," said physical therapist Muhammad Amer from the Al-Shifa Bath. "Hardly a day passes without new customers coming here. Most of our clients are Arabs from Israel."

Many shopkeepers said for that for the first time since the beginning of the second intifada in September 2000 there are signs that the economic situation in the city and other parts of the West Bank is improving.

"I hope the situation will stay like this for a long time," said Ayman Abu Jaser, manager of a small restaurant that specializes in kebab and humous. "I've never seen Nablus so full of shoppers."

He added that Saturday has become the favorite day for almost all merchants because of the large number of Israeli Arabs who flood the city's markets.

Older merchants said the full markets reminded them of the days when Israeli Jews used to eat and shop in Palestinian cities and villages, before the first intifada erupted in late 1987.

Nablus-born Munib al-Masri, who is often described as the wealthiest Palestinian on earth, said he and many of his friends were working hard to restore Nablus's status as the economic capital of the Palestinians.

He too attributed the economic boom to the success of the Palestinian security forces in restoring law and order to Palestinian communities.

"The security situation is good, so everyone wants to do business in the West Bank," said Ali Barham, coordinator of the Nablus Shopping Festival. "Many people are beginning to feel the change."

The change, Palestinian political analysts explained, is one of the direct results of the international community's decision to pour billions of dollars into Prime Minister Fayad's government to bolster his standing and undermine support for Hamas among the Palestinians.

"The crisis between Fatah and Hamas has been a blessing to Fayad and his government," said a Ramallah-based analyst. "Everyone is giving Fayad money with the hope that he would be able to prevent Hamas from extending its control to the West Bank."

He cautioned, nonetheless, that while the growing prosperity may have some kind of a moderating effect on Palestinians, it does not necessarily mean that many would end up voting for Fayad or Fatah when and if free elections are held.

"It's premature to tell whether all the money that has been poured on the Fayad government has changed people's political attitudes," the analyst said.

Fayad's aides said he hardly spends time in his Ramallah office because he's too busy running from one place to another inaugurating different economic projects in the West Bank.

"We're not waiting for Netanyahu and Blair," said one aide. "Many of the projects were planned long before Netanyahu and Blair came."

Blair, on a visit to Nablus this week, said the economy is improving "because the Palestinians are providing their own security today and the Israelis are starting to lift the access and movement restrictions."

There could be immense change here, Blair said, if political talks were able to resume soon with prospects of a deal to create a Palestinian state at peace with Israel.

Like Nablus, Jenin was also once known as a "capital of Palestinian terror" because of the multiple gangs and militias that used to roam its streets. Thanks to the easing of IDF restrictions and the millions of dollars that are being invested in various projects, Jenin has also been transformed into a major shopping city.

For more than a year now, the IDF has been allowing Israeli Arab families to enter Jenin for shopping, especially on weekends.

But a most significant change occurred recently, with the opening of the Herbawi Home Center mall. The five-story mall has since attracted thousands of visitors from the West Bank and Arab villages and towns in Israel.

Developer Ziad Turabi said that luxury malls were also expected to be opened in Ramallah, Hebron, Tulkarm and Nablus in the near future.

According to the International Monetary Fund, the West Bank economy could improve significantly this year if Israel continues to ease restrictions on Palestinian trade and movement. It said that the economy in the West Bank could grow by as much as 7% this year.

Osama Kana'n, the IMF representative in the West Bank, said this could represent the first significant improvement in living standards for the Palestinians since 2006. Yet he warned that if the relaxation of Israeli restrictions does not continue, real GDP per capita would decline further in 2009.

Last week the government announced that the Allenby Bridge on the Jordanian border will remain opened 24 hours a day as part of Netanyahu's plan to improve the Palestinian economy. The decision has been hailed by PA officials.