ABSTRACT
This Master’s thesis examines the relationship between social business and tourism in terms of social and economic empowerment of communities, as well as promoting grass-roots level Arab-Israeli partnership and coexistence. The study is conducted at two innova-tive sites in unprivileged Arab communities in Israel, where social tourism entrepreneurs are currently operating guesthouse tourism as a tool for developing the community. The qualitative study uses an exploratory research design to reflect upon the dynamics between social tourism entrepreneurship, participation in community-based development, individual social and economic empowerment, and peace-fostering.