Time was when Jerusalem’s outdoor market was exactly that — an open-air tangle of alleys heaped high with colorful fruits and vegetables, fish and meat, legumes and grains, dried fruits and nuts, all washed through with the scent of Turkish coffee and exotic spices. Full of character, it was known for the freshness of its produce and the bargains to be had, especially late Fridays when prices plunge to rock-bottom.

In the past few years, however, the Mahane Yehuda market has become something more. This bastion of rough-and-ready second and third generation vendors, forcefully hawking their wares in the sprawling lanes between downtown Jerusalem’s Jaffa and Agrippas streets, has also become an attractive covered market, home to a growing number of chic restaurants and designer clothing stores.

“If the shuk was once known for its humus, pita and rugelach, it’s now developing a reputation for gazpacho, bruschetta and sashimi as well,” says Eli Mizrachi, proprietor of a Mediterranean-type bistro called Tzachko, which he recently opened in the heart of the market. The restaurant is already the second undertaking of this 55-year-old son of a Mahane Yehuda nut vendor.

Two years ago, on a nearby terrace next to a large butcher’s shop and some nuts and dried fruit stands, he launched Everything For The Baker And Coffee, Too, which sells imported kitchenware and serves Italian coffee and chocolate biscotti.

He has been joined by former high-tech professional Itzik Sananes, who opened the kosher deli Mazeitim across the way. Sananes sells cheeses produced in boutique Israeli dairies, upscale wines from Israeli vineyards, and Tomer’s bread baked by a young Jerusalemite who runs a boutique bakery in Talpiot.

Sananes and Mizrachi are among a growing group aiming to make Mahane Yehuda competitive with Jerusalem’s other shopping areas — especially, they say, now that the security situation has improved and the market, once a repeated and bloody terror target, is bustling.

“We want to keep this market alive and relevant in an age of shopping malls and superstores,” says Mizrachi, who chairs Mahane Yehuda’s Council of Stallholders. “We want to see new alongside old.”

So, flanking stallholders such as Boaz, who still mans his 30-year-old olive stand; Eliezer, who has been selling nuts for more than 25 years; and Aliza, who bags vegetables as she has for the past 14 years, there are newcomers.

Mahane Yehuda is gentrifying.

Since April 2005, three designer clothing stores have opened. Bordeaux relocated from Jerusalem’s elegant Katamon neighborhood to 6 Tut St., next door to a fishmonger and opposite a butcher.

“I’ve always loved the shuk and thought it’d be fun working in this environment,” says owner Efrat Ben-Arza. “The difference going from a high-end business area to the bustling city center has been huge, but I see great potential. I’m delighted to welcome customers who come to the market for tomatoes and end up buying one of my pashminas as well!”

Alei Te’ena (Fig Leaves) chose a Mahane Yehuda location at the suggestion of Eli Mizrachi, an old friend of co-owner Ronit Gilboa. “At first I thought it was a mad idea,” says Gilboa. “Who’d come to the shuk for stylish clothes? But later, talking it over with my partner, we decided it was exactly the right place to create the personal kind of store we envisioned.”

Most traditional market vendors have welcomed the newcomers, says Mizrachi. “The people working here want to make a living and they see that new enterprises bring more people here; people who didn’t come to the market five years ago. This has helped them realize the importance of helping new initiatives become part of the market.”