The Wadi Ara region links Israel's heartland to the Palestinian Autonomy areas on the one hand, and to the Galilee on the other hand. Significant economic potential is concentrated around the Wadi Ara Road (Route 65), one of the central_most routes countrywide. The plan's aim was to realize the region's inherent economic potential and to promote sources of income for both the authorities and the population. For this purpose, a comprehensive study was carried out, defining the region's competitive profile and identifying projects likely to lead to realization of its potential. The mutual relations between the region and its surroundings provide the point of departure for the planning process and its products. This pilot planning project is the first of its kind for the Israeli Arab sector, and its significance is augmented by the ongoing peace process. It may serve as an example for regional development processes based on a contextual approach, enabling flexibility and innovation in the planning process and its products. The combination between theoretical aspects and actual decision_making processes underlines the project's importance as a pilot study from which broad planning generalizations, conclusions and analogies can be drawn.