By Irit Rosenblum

The Finance Ministry has firmly rejected a Tourism Ministry request to compensate hotels and tour organizers hurting from the tourism slump since the outbreak of the intifada.

The Tourism Ministry sought aid of NIS 450 million for the smarting industry. But the treasury nixed proposals to sustain unpaid leave for hotel employees over the coming months, to aid tour guides, and to reduce municipal taxes for hoteliers.

Tourism Ministry director-general Itai Eiges informed his minister, Rechavam Ze'evy, that the treasury's offers are insignificant and do not help resolve the problems bedeviling the industry since September 2000.

Ze'evy subsequently demanded that Finance Minister Silvan Shalom come up with an urgent solution to the crisis.

"The State of Israel can meet our demands. They are just, not exaggerated or wasteful," Ze'evy charged. "Building up tourism takes years of work. Many ministers have invested money and attention to this end, and the destruction has come in a flash."

The Tourism Ministry will shortly embark on a campaign to boost domestic tourism. It hopes to alter Israeli consumer habits and increase the number of Israelis holidaying in Israel.

At a meeting with Jerusalem hoteliers this week, Ze'evy noted that both foreign and domestic tourists viewed hotel prices in Israel as exorbitant.