A Jewish billionaire has just spent £14 million on a unique project to boost employment in the Israeli-Arab town of Nazareth.

Stef Wertheimer has opened an industrial park — the first in one of Israel’s Arab municipalities. “This industrial park in Nazareth is a model and a real investment in the local economy and Jewish-Arab coexistence,” he said.

Mr Wertheimer, 86, is arguably Israel’s best-known industrialist. He recently hit the headlines when American businessman Warren Buffett bought the metal-working company, Iscar, that Mr Wertheimer started as a youngster. Mr Buffett paid £1.3 billion for Mr Wertheimer’s remaining 20 per cent share in the company — having bought the rest of the business in 2006 for £2.6 billion.

He strongly believes in the potential of industry to generate peace. “Twenty years ago, I decided that the peacemaking process had to include helping our neighbours to be successful,” he recalled, explaining that he is convinced that prosperous and satisfying employment has the power to undermine political extremism.

History teaches that economic relations bring harmony between neighbours, he said. “In Germany, the East and the West made peace. How did they make peace? [The West] helped the East to be successful.”

Ideally, Mr Wertheimer would like to build industrial parks in areas under Palestinian Authority control as well as in Jordan and Egypt — and has tried over the past two decades, sometimes proposing them in border areas where Israelis and Arabs would work together. But, blocked by political factors, he decided to concentrate on an Arab locale in Israel, and chose Nazareth.

Around 1,000 people, Jews and Arabs, will work at Nazareth Industrial Park when it is at full capacity. The project has caught the imagination of Israel’s President Shimon Peres, who remarked: “The significance of this industrial park is quality employment and equality of opportunity for everyone — the park proves that it is not a dream but a reality. This is the best statement for coexistence between Jews and Arabs. It is truly significant, not just empty words.”

Nazareth is Mr Wertheimer’s seventh industrial park — he has established five others in Israel and one in Turkey. The parks do not make a profit at the moment but he is determined to build more — and plans to use some of the profits from his Buffett deal for park building. He calls the centres a “capitalistic kibbutz system” that nurtures industry.