The Tayelet is the best way to approach Jaffa and appreciate an ancient city of rare beauty. Old Jaffa, the heart of the city, has been turned into an artists' quarter. The ancient sandstone buildings, piled one on top of another, have been carefully restored and glow with a subtle yellow light. Jaffa is one of the oldest ports in the world, mentioned in the Bible. Dig down and you find the layered remains of ancient empires from the Egyptians, Romans, Byzantines, and Ottomans.

The center of modern Jaffa is Clock Tower Square, the heart of a multimillion-dollar renovation program launched by the Tel Aviv municipality. The improvements are steadily rippling out: Just a few years ago, the shops flanking the square were empty or derelict. As property prices soar in Tel Aviv, young couples are moving to Jaffa. The shops in Clock Tower Square now house tony boutiques and antiques vendors. The flea market is packed with tourists browsing everything from 1930s furniture to Oriental carpets. Tel Aviv municipal bureaucrats may be overkeen on skyscrapers, but they have also realized that Jaffa is an asset. "I hear the buildings talking to me," says Eyal Ziv, the architect in charge of renovation, with a laugh. "One after another, they ask me to restore them." Eyal grew up in Old Jaffa and has a rare passion for his work. "Restoration is like a coral reef. We start with a centerpiece building, and it spreads out around it. This is not just about buildings—it's about people. You have to go with the vibrations, work with them and not against them. I listen to what the people want and also what the area says to me." What was once a Turkish prison is becoming a luxury hotel, and the old train station, long unused, is being renovated with space for artists. The run-down port is being transformed into a hip seafront district.

However, the renovations are getting mixed reviews. This is not gentrification but regentrification, say Jaffa's older Arab residents—a return of sorts to the city's glory days before 1948, when Jaffa was the cultural capital of Arab Palestine, home to numerous newspapers, cinemas, and a radio station. But at the Yafa Café, just off Yefet Street, the talk is of developers trying to push out local Arab families to make room for new luxury beachside apartment houses. The café, founded in 2003 by Dina Lee, a Jewish Israeli, and Michel el Rahab, an Arab businessman, is a much-loved institution. Selling books in Hebrew, Arabic, and English, it's a tiny place with barely a dozen tables but a big mission: to bring Jewish and Arab Israelis together to talk, even if they don't agree. And talk they do, fueled by endless cups of coffee, fresh pita bread, and spicy vegetable dips.

In a way, the relationship between Jaffa and Tel Aviv is analogous to that between Israel and Palestine: Tel Aviv was born as a suburb of Jaffa, but now Jaffa is a suburb of Tel Aviv. But Tel Aviv could also be an analogue for Israel. If the modern Hebrew city can enjoy a balanced relationship with the ancient Arab port, then perhaps Jews and Arabs can find a model for living in peace in this much-contested land.