The global affairs magazine Monocle has singled out Haifa as top of its "places to watch for business opportunities in 2011".
It explains that Haifa - which flourished under British rule, before Israeli independence - has been in "steady decline for the past few decades," yet its "massive head-to-toe regeneration effort" is "starting to have an impact."
Mayor Yona Yahav views the award as recognition of his success in turning the city round during his seven years in office.
"The change in the business sector began seven years ago when we made the city friendly to investments," he said, referring to campaigns and tax incentives to attract businesses.