While the intifada has had a profound effect on Israel's economy, it has also forced Israeli entrepreneurs to seek more creative marketing solutions. With fewer tourists spending their dollars in the Holy Land, a number of Israeli companies like Kakadu Art and Design in Wood are working to increase their international business through the Internet and shipments abroad.

Valerie Jonas, the Livermore-based Internet marketing director for Kakadu, said the current crisis has also contributed to feelings of patriotism — something that can tug at the purse strings as well as the heartstrings.

"I think we're really seeing a response from customers here in the States who feel it's very important to show support for Israel," said Jonas, who runs the marketing operation with her husband, David. "Also, because Kakadu products are handmade and not mass produced, people have a much more emotional and visceral connection to the products.

"It's not like buying a chair at a furniture outlet."

Kakadu is the Hebrew word for "cockatoo," and many of the whimsical designs include bold, colorful birds. The collection features more than 100 products, including bowls, plaques, stationery items, placemats and carpets, all handpainted on wood.

Aharon Shahar, a master carpenter, designs the pieces while his wife, Reut creates the artwork in their workshop at Moshav Zafririm, a town between Tel Aviv and Jerusalem. They have galleries in both Israeli cities, as well as a factory store, and sell to several stores and galleries in North America, Europe and Mexico.

Their goal is functional art that can be used at the dining table, as home decor or as office accessories. Retail prices in the United States range from $20 and up for accessories to $200 and up for furniture. In addition to the Internet operation, the Jonases also sell the pieces at Jewish fairs, including the upcoming "Israel in the Gardens" in San Francisco June 2.

"All of our creations are the results of our collaboration — of our personal desire to create for ourselves a synthesis between a simple, practical design sensibility and a distinctive, colorful, artistic atmosphere," the designers say on their Web site — www.kakadu-design.com — "We believe that there was, is, and forever shall be, a world in which design is interwoven with art, which is not restricted to gallery and museum walls, but is a functional part of everyday life, surrounding us, creating for us a warm, aesthetic nest."

Contacted in Israel via e-mail, the Shahars alluded to the changing economic climate, and specifically how it has impacted their marketing strategies. Aharon Shahar wrote that since the rate of the dollar has risen, it has become much more profitable to export his products. That, he said, represented a dramatic shift from the previous years, when the shekel was stronger, and exporting constituted roughly 15 percent of their business. Exports now account for 30 percent of the Shahars' product line.

Additionally, the Shahars are rethinking modes of production for their business, which was formed in 1990. Each Kakadu handmade product normally passes from artisan to artisan inside the Kakadu workshop, moving from woodworker to painter to finisher. In recent months, some workers — mostly Palestinians — have been unable to travel safely to the Kakadu workshop. The Shahars had to create a new production model that involves a network of mini-workshops in employees' homes.

According to Shahar, this meant separating Jewish workers from Palestinian workers, which goes against Shahar's views on coexistence. But he remains hopeful that the economic cooperation between Jews and Arabs will transcend religious and political differences.

As for Jonas, who first encountered Kakadu four years ago while visiting the country for her daughter's bat mitzvah, she remains optimistic both about the product and what it represents.

Certainly, there are problems resulting from the intifada, including "the psychological stress of just knowing that my home-based business is reliant upon a company that faces uncertain conditions every time they open their doors."

In addition, getting products into the country has been slowed by airline delays and the relocation of manufacturing facilities to serve the Palestinian employees.

But despite those problems, she said: "To me, Kakadu shows a spirit that is bright and free, in addition to combining art that is both functional and beautiful. There is something uniquely Israeli about that. I think that the 'can-do' spirit and rugged beauty of Israel shows through every time someone picks up a piece of Kakadu art."