This study specifically examines the potential for heritage tourism development topromote cross-cultural dialog in the historic old city of Nazareth (Israel). The paperfocuses on a case study of a small-scale heritage tourism venture that seeksto influence tourism development in Nazareth’s old city. This is an exploratorycase study that uses qualitative research methods including extensive participantobservation and in-depth interviews with the venture’s senior management group andselected employees. Study findings indicate a model of the relationship betweencommunity-based tourism development, heritage, and peace-building in a city thathas experienced a wide range of cross-cultural conflicts. This model represents analternative view to the notion that heritage serves to enhance differences anddissonance between different cultural groups. In contrast, findings from this studysuggest that heritage in the form of tourism can help create shared interests betweendifferent communities in settings characterized by cross-cultural conflict.