BARTA'A, West Bank (JTA) -- In these days of frozen peace negotiations, most Israelis and Palestinians have little contact. Palestinians need a special permit to enter Israel, and Israelis need army permission to enter the parts of the West Bank controlled by the Palestinian Authority.

In fact, just a mile north of this small West Bank town, a large yellow sign reminds drivers that “it is illegal to hand over cars for repair to the Palestinian Authority or to enter Palestinian areas.”

But in Barta’a, Israelis and Palestinians mix freely. The town is legally divided, with West Barta’a inside Israel and East Barta’a in the West Bank. But there’s no physical barrier between the two sides, and East Barta’a has developed a thriving market of hundreds of small stores selling everything from coffee sets to sheets to food to special teddy bears for Valentines Day.

“They have a good selection, and the prices are much cheaper,” said Sharon Ben Harosh, a 43-year-old Israeli Jew who frequently makes the four-hour trip from Eilat to buy textiles for his shop.

“There’s a feeling of authenticity here. I buy everything here -- rugs, furniture, dishes, curtains,” he said. “I really feel at home here.”

Palestinian store owner Ali Hamarshi, 48, grins and nods his head.

“I bring things from many countries -- China, Turkey, Italy, the Philipines, Vietnam,” Hamarshi said. “India and China make the best kitchen goods, and many Israelis come here to buy.”

His words are echoed by Yusuf Zahar-Din, 52, who came to Barta’a from the Israeli Druze village of Usfiyya with his wife Hediye.

“We changed the tires on our car, bought some gifts and had a great meal of lamb,” Zahar-Din said smiling. “The people here are so nice. I love coming here.”

He added that prices are 50-60 percent less than inside Israel.

But not everyone benefits equally from the throngs of Israelis driving into Barta’a, says Zidran Badran, the mayor of the Israeli section of Barta’a.

“The commerce is all over there, not here,” he said. “We just get all of the dust.”

Prices are higher in the Israeli section of Barta’a because store owners there have to pay higher taxes.

The shops line a narrow twisty road, and there is no designated parking lot. Badran says an estimated 80 percent of the shoppers are Arab citizens of Israel and 20 percent are Jewish Israelis.

“Before I knew about this place, I was really afraid to come,” said Ben Harosh. “Now that I know about it, I don’t want to leave. I don’t know anything about politics, but this is the way things should be.”

Most of the citizens of Barta’a are from one large clan, the Kabaha clan. On the Israeli side, there are almost 4,000 residents; on the Palestinian side, about 6,000.

From 1948 to 1967, East Barta’a was part of Jordan, and families here were divided. In 1967, when Israel took over the West Bank, families were reunited; many families are mixed, with one spouse from Israeli Barta’a and the other from the Palestinian side.

Rafat Kabaha, the head of town schools on the Israeli side, says about one-third of the students come from the Palestinian side. If one parent is an Israeli citizen, the children can study in the local Israeli school even if they live on the Palestinian side.

Kabaha says 62 percent of the high school students receive a matriculation certificate, which enables them to attend university. That figure is almost double the overall rate of other Arab citizens of Israel.

“Both our teachers and our students live here in the village, and our teachers are very committed,” Kabaha says.

Barta’a is easy to reach -- it is just a few minutes away from a major Israeli highway. Badran hopes that Israelis will continue to come but that Israeli Barta'a will develop as well.

“I have a dream,” he said. “I’d like to see people from all nations over the world coming here. In China they’ve already heard about Barta’a because we buy so many Chinese goods. We could even build a hotel here.”