KFAR-VRADIM, Israel — An industrial revolution is occurring here.

Amid the green mountains of the western Galilee, millions of dollars' worth of export products are being produced — everything from CDs and electronics to spices and natural food products. But you'd never know it.

There are no boxy factories. No familiar hum of machinery. Instead, small, one-story offices and manufacturing plants surround a museum and sculpture gardens at Tefen Industrial Park. The only sounds are of children playing in the adjacent schoolyard, or strains of Mozart rising up from a concert in the park.

Now in its 12th year, Tefen — founded by Stef Wertheimer — is a model of Israeli entrepreneurial spirit. Call it a moshav or collective for the '90s.

At Tefen, independently owned, environmentally sound export start-ups operate in this incubator for up to five years before graduating to independence.

In more than a decade, 20 such companies have relocated to nearby areas. Five have failed.

In 1994, $325 million in exports were produced by 50 firms in an area containing less than 1 percent of Israel's population. Export activity here by the year 2005 is projected at $1 billion.

The late Prime Minister Yitzhak Rabin once said, "Another 20 Tefens would mean double the volume of industrial exports from the state of Israel. This would change the economic, social and security positions of the country."

Oren Drori, Israel's director of tourism for the western United States, added, "Wertheimer really had a vision. High standards. [Tefen is] the advanced Israel — the Silicon Valley."

However, it's not just big business that makes this Galilee technological park an anomaly.

About 600 families live in Tefen's planned residential community, which includes a shopping mall and a sports center complete with indoor-outdoor pool, tennis and basketball courts.

Not all residents operate businesses at Tefen, however. Some have chosen the location for its lush natural beauty. Others are attracted to the on-site experimental K-12 school, which allows students to choose their subjects of study. All have access to the Open Museum, the Museum of German-Speaking Jewry, a vintage car museum, sculpture gardens, concerts and cultural events.

Israel Ben Tsur, a Tefen Industrial Park resident and partner in Stepac — maker of plastic wrapping for medical sterilization and food packaging — said he chose to locate here for aesthetic reasons.

An attractive workplace is "important not only for the customer, it's important for the workers, too," he said in a Tefen promotional brochure.

While Tefen appears decidedly contemporary, its concept is more than 40 years old.

In 1952, Stef Wertheimer conceived Iscar — a cutting tool company. Armed with a vision but no equipment of his own, he proposed to rent idle machinery at night from a nearby kibbutz. Six years later, Iscar was exporting precision cutting tools to Europe and the United States.

Confident that his own success could be duplicated, and that other businesses could improve Israel's export industry with just a bit of assistance, Wertheimer moved Iscar to the western Galilee and anchored Tefen.

In 1987 Tefen's residential community, Kfar Vradim, was founded. In 1994, it was recognized as a municipal council.

Also in 1987, the Open Museum, a platform for Israeli artists, hosted its first exhibit. Five years later, the Museum of German-Speaking Jewry opened. It chronicles Jewish contributions in art, architecture, sports, music, theater and literature. Potential creators, lost in the Holocaust, are memorialized by a single yellow Jewish star set under glass.

Meanwhile, outside stone sculptures with titles like "Hymn of Love" and "Promises, Promises" adorn neatly trimmed green lawns.

"We're trying to change the image of industry," explained Lala Mandelbaum, a museum guide. "Even for the people living and working here."