BEIT JALA, West Bank—A gray cinder-block facade greets motorists who turn off Route 60 and navigate the winding road to the rocky, scrubby hilltop where the Everest Hotel and Restaurant sits. The cavernous interior is no more impressive: an assault of fluorescent lights, red floor-to-ceiling curtains, and large, white cafeteria tables. For 35 shekels ($8.50), diners can get traditional Arab fare or the occasional Italian dish.

But few come to this place for the decor or the food, or even to reminisce about its former glory as a destination for Arab royalty. Perched atop the highest point in Beit Jala, an Arab-populated community just south of Jerusalem, the Everest is one of the area's last easily accessible spots where businesspeople, scientists, and activists from Israel and Palestinian-controlled sections of the West Bank can safely and legally meet to make deals and exchange ideas. Located between Jerusalem and Bethlehem, Beit Jala is under Palestinian control and is off-limits to Israelis without permits, but the parcel of land on which the Everest sits is less strictly defined.

"This place is the connection to the outside world of business," says Mousa Diabat, an Arab Israeli working toward his master's degree in hydrochemistry at Ben-Gurion University in Beersheba. He regularly meets at the Everest with Nader al-Khateeb, a Palestinian hydrologist who leads the Water and Environmental Development Organization in Bethlehem. "Once it goes, a major connection between both nations will be lost," Diabat says.

To thwart Palestinian snipers and suicide bombers, Israel is building a wall ranging in height from 10 to 26 feet along a 15-mile stretch of the boundary between Israel and the West Bank. The wall will separate Beit Jala, and the Everest, from Israel, threatening the hotel's role as a meeting place and illustrating the tenuous nature of doing business in this region.

Branches of the Israeli military disagree about whether the Everest land falls under Israeli military supervision, a distinction that's important to Israelis concerned about safety. And though various military spokesmen say the barrier will not diminish access to the restaurant, regular customers and its owner worry that routes to the Everest will become more roundabout and Israelis will fear going to the other side of the wall. As the partition has grown, other once-accessible meeting places—a two-block strip of coffee shops in the Palestinian town of A-Ram and the Tantur Ecumenical Institute on the road to Bethlehem—have slowly been placed out-of-bounds.

The two economies have remained essentially interdependent, even as casual contact points have disappeared. Today, the Palestinian territories conduct 90 percent of their trade with Israel, and they are Israel's second-largest export market after the U.S., says Maher Hamdan, chief executive of the Palestine Trade Center, a Ramallah-based trade-promotion organization. The Palestinian territories depend on Israel for basic services and goods such as electricity, milk, sugar, and rice, while Israel imports textiles, olive oil, stone and marble, fruits and vegetables, and perhaps most crucially, labor.

Of the more than $3 billion in annual trade between Israel and the Palestinian territories, Hamdan estimates that tens of millions involve the Bethlehem and Beit Jala area, and much of that business takes place at the Everest. Paper Industries owner Nafiz Hirbawi says he met Israeli suppliers and customers at the Everest three times a month until the entrance from Route 60 closed (a military spokesman says it has been moved). Now he is seeking other markets for his products. The Everest's owner, Makram el-Arja, believes the amount of money generated by business meetings could as much as halve once the restaurant is cut off.

But not everyone is so pessimistic. Makram's cousin Elias el-Arja, who has set up as many as 20 meetings in a single month at the Everest for his Beit Jala-based Arja Textile, believes that the business community's survival instincts will inspire creativity.

"We cannot just sit and wait for business to come," he says. "When the wall came, I started looking for other customers, in France, Britain, and America. But the Israelis will leave some kind of hole for us to see each other. We buy from the Israelis 10 times what they buy from us. They will allow the business to go smoothly, but the Everest will suffer."