JERUSALEM — Generally, Chanukah is a good time to sell bicycles, according to Tsvi Akiva, manager of the Express Bikes store at the Ahim Mall in southern Jerusalem.

This year, however, sales have been slow.

"Business is down," says Akiva, surrounded by shiny new bikes and every biking accessory imaginable. "Just walk around the mall and you can see how few shoppers there are. You don't even see people browsing. Things are so bad that the store next to me, a toy store no less, closed just before Chanukah."

Akiva, a transplanted American, attributed the slowdown to a number of factors.

"Things are very uncertain. The economy is depressed, people are unemployed, we're about to have new elections, and the Iraqi threat is hanging over everyone's heads. Then there's the intifada," Akiva says gloomily.

From the conversations he has had with his fellow shopkeepers, friends and customers, Akiva surmises that "people aren't in the mood to shop. There's the belief that when people get depressed they splurge and feel better. Here that doesn't work. Israelis are affected by the events around them and they're not celebrating much."

That just about sums up the atmosphere in Israel this Chanukah, despite attempts by various municipalities to make it a festive time.

In Jerusalem's city center, few stores made an effort to decorate their windows with a Chanukah theme, realizing that there aren't enough customers to warrant the time and expense.

"Business is very bad at the store," confirms a sales clerk at the Happening gift store on Ben Yehuda Street. The Ben Yehuda pedestrian walkway has witnessed several fatal terrorist attacks during the past couple of years, a fact that has forced numerous shops to close in recent months. Just about every downtown street features at least one store with a "For Rent" sign.

Although Chanukah, a time when the kids are off from school for the week, is traditionally a period when Israelis take a family vacation, that's not the trend right now.

According to Gabi Slov, marketing manager at the Tzabar travel agency in Tel Slov, itineraries reflect the depressed mood in the country.

"The majority of our customers are taking their Chanukah vacation in Israel this year, whereas it's usually 50-50," Slov says, referring to the traditional mix of local vs. foreign travel.

"War could break out in Iraq in January, and due to the uncertainty, people have opted for long weekends away rather than longer trips; Eilat or the Dead Sea versus going abroad. They want to be able to rush back to their families in case of emergency."

Those who can afford a five-star vacation in Israel are enjoying the Chanukah hype that typifies the holiday.

During the week, most of the big hotels run nonstop kids' activities. Many hire TV performers who are popular with the younger crowd.

Because Chanukah and Christmas don't coincide this year, Slov says some of the wealthier Israelis he knows are planning a family vacation during Chanukah, then an adults-only trip in Europe when the big sales are on.

David Clayman, director of the American Jewish Congress's Israel office, believes Chanukah in Israel has become commercialized.

"When I moved to Israel 32 years ago, it was traditional to give your children a few coins of Chanukah gelt and a present," Clayman recalls. "Today, people do much more. They take a trip, go to a hotel. They take their kids to elaborate Chanukah shows, which cost quite a bit of money. That's not how it used to be."

Clayman attributes this commercialization to the fact that Israelis as a whole have more money than they used to. Those who don't, however — for example the more than 1 million Israelis who live below the poverty line — feel increasingly disenfranchised.

"As Israel has become a more affluent society," Clayman notes, "you find Israelis providing their children with extraordinary luxury and gifts, as never before."

Yet compared to the way many American Jews celebrate Christmas, the way most Israelis — even wealthy ones — mark the holiday is still considered modest.

"In America, a lot of parents give a present every night for eight nights. That's because there's a compulsion to compete with Christmas. There's no such compulsion in Israel," he says.

Though Christmas is barely discernible in most Israeli towns and cities, that isn't the case in Tel Aviv.

Thanks to the influx of hundreds of thousands of non-Jewish, mostly Russian immigrants, as well as an estimated 300,000 non-Jewish foreign workers, the demand for Christmas trees, lights and the other trappings of the holiday is quite big.

"You now see Israeli commercial establishments, restaurants and bars, with Christmas trees," Clayman notes. "I find this a disturbing phenomenon."

But at the Malcha Mall in Jerusalem this week, store owners are concentrating on Chanukah, not Christmas.

Arranging a large assortment of cardboard dreidels filled with chocolate, Yoel Wolfovich, the owner of a popular candy shop, still has hopes that business will be good during the holiday, despite the political turmoil and the recession.

"Big companies buy lots of gift packages for their employees," he says. "Intel bought 2,000 last year."

Asked whether Intel repeated its order this year, Wolfovich grows quiet.

"They haven't ordered from me," he says in a strained voice. "Maybe they bought from someone else."