The ravaged palace that symbolises the hope of peace

Palestinian businessman is rebuilding his home after it was caught in the crossfire

The first remodelling of Albert Abu Zgheibreh's impressive home in Beit Jala on the outskirts of Bethlehem was free of charge, but not to his taste. Hellfire missiles fired from Israeli Apache helicopter gunships left gaping holes in the walls, tank shells smashed through the supporting pillars of the verandas and the stonework was raked with heavy-calibre machine-gun fire.

For nearly a decade, the ravaged beauty towered over the valley dividing Palestinian Beit Jala from the Israeli suburb of Gilo, its blackened holes and shattered stones like broken teeth in a gaping mouth silently bemoaning the folly of war.

It took five years and $880,000 to build the house. It was barely completed before the Palestinian intifada erupted in the autumn of 2000. Taking advantage of Mr Abu Zgheibreh's absence abroad, a group of gunmen decided to use it as a machine-gun nest to fire across the valley at Gilo, triggering the explosive Israeli response.

No one knows how many holes the Israelis punched in Albert's Hall, but now he has begun to fill them. "Last year I decided it was time to rebuild it again. I didn't want the people – Israelis and Palestinians – to have to keep looking at this reminder of what war could do," Mr Abu Zgheibreh, 69, tells The Independent as he conducts a private tour of the premises.

He has recalled the expert craftsmen, stonemasons and engineers and sunk another million dollars into a second remodelling, in the hope this stark reminder of recent violence will become, instead, a symbol of peace.

"This house has entered into history because of the Israeli bombardment. Everyone wanted to know why I wasn't rebuilding," he says. "I'm building for the future and for my family. I hope now there will be peace. It's enough. For the Palestinians, for the Israelis, for everyone, peace will be better."

Mr Abu Zgheibreh's story is almost a parable for the Christian Palestinians who now make up less than 2 per cent of the population and have been reduced to a minority even in the region of Bethlehem, the traditional birthplace of Jesus.

Like thousands of Christian Palestinians, his father emigrated to Latin America in the 1920s when Palestine was hit by drought and a severe economic depression. Mr Abu Zgheibreh's grandfather was a textile merchant. His father set up a branch of the family textile business in Colombia and later settled in Honduras. Mr Abu Zgheibreh inherited the family textile business and then moved it to the Free Zone in Panama, where he has lived for the past quarter-century.

After the signing of the Oslo peace accords in 1993, Mr Abu Zgheibreh decided it was time to re-establish the family ties with their ancestral homestead. He decided to build a new home which would also secure the family's ownership of an acre of land adjoining his grandfather's home, built in 1929. "I wanted to make something different, something new and really beautiful. I want people to look at this house and remember my family, remember this house, and remember Beit Jala," he says.

With its fine stone carvings, sweeping balconies and soaring arches, the 16,000sqft home on three storeys quickly earned the sobriquet Al Qasr – "The Palace".

"When the Israelis look across the valley they can also see that this is a good place with good people. I want everyone to enjoy the beauty of this house. It's for all the people," he says.

Mr Abu Zgheibreh climbed nearby mountains to look at the house from all angles as it was under construction and added new elements which could be seen from far off. He jokes that he has used enough stone cladding for four houses, and plans to fill the three-quarters of an acre of garden with fruit trees and fountains.

He has brought in traditional artisans like Abu Wa'el, a third-generation stonemason from the nearby village of Beit Fajjar, who on a recent morning was hand-chiselling the final touches to the delicate filigree around the windows.

"I like this artistic, delicate work," says Abu Wa'el. "There are very few people who want this kind of work these days. I learned it from my father and grandfather and I've been working like this for 40 years. I don't imagine my grandchildren will be doing this 40 years from now."

Mr Abu Zgheibreh admits he is gambling on peace to ensure he will not have to build the house a third time. He first found out what was happening to it when he saw it being attacked by a helicopter gunship on CNN. "I couldn't do anything," he says. "It was war, and I was in Panama."

He says the gunmen who first drew Israel's fire to the building in 2000 did not come from Beit Jala – a charge confirmed by Abu Atef, one of the Fatah gunmen who began firing from the building. Abu Atef says it became a right of passage for the most daring gunmen to take their turn behind the group's belt-fed Browning M2 .50-caliber machine-gun. Several gunmen and residents of Beit Jala were killed in the resulting firefights.

"The first time we came, the neighbours were OK, but after their houses began to be damaged from the Israeli tanks, people became very angry and tried to push us to another area to shoot. They didn't give us any help, not even a drink of water when the guys were thirsty. Even now they don't like us," Abu Atef admits.

These days, far from shelling the building, the Israeli army is taking an active role in securing it. Last year, the local Israeli commander made a rare early-morning visit to Beit Jala to inspect progress. A unit of Palestinian National Guard troops is stationed at the top of the road.

"If anybody comes, the Israeli soldiers see through their binoculars and tell the Palestinians to go and check it out. I have protection from both," Mr Abu Zgheibreh laughs.

Most of his five children continue to work in Latin America, but one of his daughters has married a local man and settled back in Beit Jala. He spends about four months of the year here but intends to spend more time once the house is finished. "I'm an old man and I want to retire," he says.

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