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Although the Israeli state subscribes to the principles of administrative fairness and equality for Jews and Arabs before the law, the reality looks very different. Focusing on Arab land loss inside Israel proper and the struggle over development resources, this study explores the interaction between Arab local authorities, their Jewish neighbors, and the agencies of the national government in regard to developing local and regional industrial areas. The author avoids reduction to simple models of binary domination, revealing instead a complex, multi-dimensional field of relations and ever-shifting lines of political maneuver and confrontation. He examines the prevailing concept of ethnic traditionalism and argues that the image of Arab traditionalism erects imaginary boundaries around the Arab localities, making government incursion disappear from view, while underpinning and rationalizing the exclusion of the Arab towns from development planning. Moreover, he shows how images of envi