TEL AVIV — A decade ago David Azrieli revolutionized shopping in Israel when he built the country's first American-style mall. Now the Montreal developer is launching a second urban transformation here: state-of-the-art skyscrapers.

Azrieli, 73, recently kicked off the leasing of Tel Aviv's Project ha-Shalom (the Peace Project). When completed by the turn of the century, the 3.4 million square-foot development will be the largest and most sophisticated commercial complex in the Middle East.

The site of the complex on Tel Aviv's eastern edge abuts the Kirya, the Defense Ministry headquarters to which 10,000 soldiers commute daily. On the other side is the Ayalon Expressway and a station on Tel Aviv's inter-urban rail network now under construction.

Azrieli, CEO of Montreal's Canpro Investments and its Israeli subsidiary Canit Ltd., envisions the Shalom Project as the heart of a future "City," shifting business away from Tel Aviv's antiquated offices closer to the Mediterranean beaches.

Irked by the controversy and lawsuits that have plagued his bid to radically change the Israeli way of doing business, he remains optimistic his towering ambition will be vindicated.

The Polish-born, Israeli-educated tycoon, who has been living in Canada since 1954, plans the Shalom Project as his signature statement. It's the largest commercial venture ever undertaken in the Jewish state.

Phase one will include a triangular 32-story tower and 324,000 square-foot shopping concourse. Phases two and three, scheduled for completion in the year 2000, will include a round 42-story and square 37-story tower.

While the name Shalom Centre evokes the Israeli-Palestinian peace accords, the project is in fact prosaically named after the major street it abuts, Derekh ha-Shalom, the Peace Road.

Azrieli transformed retailing in Israel in 1985 when he opened the country's first air-conditioned shopping center in the Tel Aviv suburb of Ramat Gan. The concept was so radical he had to coin a Hebrew word, canion, from "shopping" and "parking lot."

The mall, called Canion Ayalon, alludes to the valley where Joshua ordered the sun to stand still (Joshua 10:12), and Saul and Jonathan smote the Philistines (I Samuel 14:31).

Azrieli himself has led a storied life of almost biblical proportions. Narrowly missing being caught in the Nazi Holocaust dragnet, he fled to Palestine in 1942. He fought as an officer in the famed Seventh Brigade during Israel's 1948 War of Independence, seeing action in the bloody battle for the Latrun fortress.

Later he studied architecture at the Technion in Haifa. Although he never graduated, Azrieli has an abiding interest in building design. That passion led him to endow the David Azrieli School of Architecture at Tel Aviv University. The first class opened in the 1994-1995 academic year with 60 students chosen from more than 1,000 applicants.

Azrieli spent time in England and South Africa before moving to Canada in 1954. By 1958 he had built his first four duplexes in the Montreal suburb of Anjou.

Riding the crest of Canada's postwar decades of prosperity, he branched out from residential projects into commercial real estate.

His privately held company today owns 11 malls and office buildings in North America.

In 1985, Azrieli was made a member of the Order of Canada, the country's highest civilian honor, in recognition of his contributions in architectural design.

But his heart has remained in Israel — where he has directed much of his philanthropy. Following his initial success with the 100-store, 216,000 square-foot Ramat Gan plaza, he put up the 183,000 square-foot Canion ha-Negev in downtown Beersheba strategically located beside the desert city's Central Bus Station. Another mall and office complex is now planned in the port city of Haifa.

On March 16, 1994, Azrieli opened Canion Jerusalem, the biggest shopping center in the Mediterranean basin. He estimates his 1 million square-foot Jerusalem mall accounts for 5 percent of commercial space in the Israeli capital.

The complex features 180 stores on three levels, glass-enclosed elevators, the Hamashbir leZarchan and Shekem department stores as anchors, eight movie theaters, a supermarket and 1,860 free parking spaces — in a covered lot. There's even a carwash and baby-sitting service, called Kefland (Funland) — one of the few places in west Jerusalem where Jewish and Arab children play together.

"I related to this structure as to a temple," Azrieli says of the glass and marble design by architect Avraham Yoski. "And I think we succeeded in building one of the most beautiful and elegant buildings in Jerusalem, and even in all of Israel."