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Unrest in Israel shouldn't deter foreign investment in Israeli high-tech firms, said Prime Minister Ariel Sharon, speaking via satellite last week to about 500 business leaders in Santa Clara.

"People are working, universities are operating, investments are coming," Sharon said during the March 15 meeting, according to the Associated Press. "There are big problems all of us are dealing with, [but] it looks from here much quieter than it looks from the outside."

In fact, Yishai Laks, the Israeli consul for economic affairs in Santa Clara, who organized the gathering, said, "The situation of the American economy and what is going on on Wall Street is more influential in Israel, more than the political unrest."

High-tech firms make up a large sector of the Israeli economy and many of them work together with American companies, Laks said. "All of them feel the heat. I can't say the unrest is helping, but it's not a major obstacle."

Some 34 companies were represented at the gathering, including investment banking companies, venture capital funds and some of Silicon Valley's computer giants like Intel, Hewlett-Packard and Sun Microsystems.

Participants discussed ways of easing the restrictions on American investments in Israel.

Sharon also briefed those present on the new government and the status of the peace process.

But the predominant message seemed to be that despite its internal problems, Israel retains its status as a high-tech capital, primed for foreign investment.

"The government is committed to making the infrastructure as friendly as possible to foreign investors," Laks said.

Sharon said he hoped a Silicon Valley-based advisory committee could be formed to help address obstacles within Israel.

"We have to make every effort, really, to make it easier," Sharon said, according to Reuters. "We need this advisory committee as early as possible."

Joseph Vardi, a principal with the Israeli venture capital firm International Technologies Ventures, said: "Israel is like another suburb of Silicon Valley. It's the reason you see the affinities between the two communities."

While acknowledging that some foreigners may be frightened to travel to Israel, Laks said this should not be a problem because Israelis are willing to travel abroad to do business.