It is cut off from beautiful beaches by barbed wire and a target for missiles, but the area around the Gaza border is being touted as Israel’s newest tourist attraction.

That’s according to the Tourism Ministry, which is throwing NIS 2 million (£350,000) at an area visitors have avoided for years over safety fears.

In spite of the rocket attacks, which have plagued the area since Israeli troops withdrew from Gaza in 2005, the belief is that if entrepreneurs build enough hotel rooms, restaurants and theme parks, tourists will arrive and the local economy will grow.

The plan comes nearly a decade after the border resort of Neve Dekalim, where the Palm Beach hotel closed during the Second Intifada, was evacuated and turned into a Hamas training camp.

Although governments have declared Gaza itself a war zone and off-limits to visitors, investment in the Strip is starting to pay off, with cleaned-up beaches, a water park, an archaeological museum and hotels attracting rave reviews.

Co-operative ventures between Israeli entrepreneurs and Gaza residents were in the planning stage before Hamas took control of the Strip and economic collaboration collapsed in the wake of hostilities.

Nevertheless, the Tourism Ministry believes there are opportunities on the Israeli side: “The Red South Festival attracts thousands to see the carpet of red anemones that bloom in January and February, and more and more foreign tourists are interested in visiting less-travelled parts of the country,” says ministry director-general Amir Halevi.

Grants worth up to 24 per cent are being offered to those intending to establish tourist accommodation and 30 per cent subsidies are available to backers of small tourism businesses.

The Gaza periphery and the nearby Negev are getting quarter of an NIS 8 million pot aimed at creating tourism infrastructure in areas of Israel dominated by Arab and other minority, non-Jewish populations.

A further NIS 2 million-worth of grants are being offered to entrepreneurs living in Druze and Circassian villages, while NIS 1 million is on offer to potential tourism businesses in Acre, close to the Lebanese border; in Nazareth; in Daliat al Karmel and Ussfiya; and on the so-called “Gospel Trail”, which is thought to be attracting a growing number of Christian pilgrims.