This article was originally published by Haaretz and is republished with permission.

Palestinians attend an annual technology exposition in the West Bank city of Ramallah. (Fadi Arouri, Maan Images)

After turning to China, India, Eastern Europe and ultra-Orthodox Israeli women as low-cost sources of software programmers, some local tech companies have begun outsourcing their coding needs to West Bank Palestinians.

John Bryce Training, the training and deployment division of Matrix, is currently negotiating with the managing director of ASAL Technologies, Murad Tahboub. The company is based in El Bireh and provides software development services to companies and organizations the world over. And Cisco Systems Israel is also planning to hire about 20 Palestinian information technology workers.

Meanwhile, seven Palestinian engineers are already working for the Israeli design center of the chip manufacturer Winbond Electronics Corporation, which also trained them. They work out of ASAL's Ramallah offices.

The president of Winbond Israel, Yonatan Levy, says he was first exposed to the idea of hiring Palestinians about two years ago, at a meeting of the Young Presidents' Organization (YPO), an international organization of 20,000 company directors.

"The next stage was organized by the Israeli Chambers of Commerce, which gathered together between 100 and 150 Palestinian IT executives to meet with Israeli partners. That's where I met Murad Tahboub, who presented ASAL to me," Levy recalls.

"At first I thought of turning to ASAL's Palestinian engineers to program on an outsourcing basis, but that didn't suit our unique needs. Afterward YPO organized another meeting that included Americans, Israelis and Palestinians. We realized that instead of fighting each other and throwing bombs we needed to work together. During the same period our parent company asked us to expand our research and development activities in China. I started thinking that it would be better to hire a Palestinian engineer to develop our less complex products, for reasons related to cost calculations as well as problems of language, culture and deadlines," Levy says.

Tahboub, who is already working with Israeli startup G.ho.st (for Global Hosted Operating System) told Levy that it costs between $1,500 and $1,800 to employ a Palestinian computer engineering graduate - about one-third of the "operating costs" for his or her Israeli counterpart. "Besides," Levy adds, "in China 30% to 40% of the workforce leaves you soon after accumulating experience, to work for better known companies like Intel and Microsoft."

Psychological barriers

Every year Palestinian universities in the West Bank graduate 2,500 to 3,000 computer scientists. ASAL has 35 full-time IT professionals and 12 part-timers on its payroll.

"My goal is to remove the psychological barrier Israelis have against working with Palestinian companies," Tahboub says. "Our people have a good command of English, good managerial abilities, a familiarity with Israeli and Western culture and knowledge of the computing field. In addition, we are in the same time zone. Everyone knows it's possible to do business with Palestinians in the field of stone and marble, or textiles. They didn't know it was also possible to do IT outsourcing," he adds.

Winbond interviewed the Palestinian candidates not at company headquarters in Herzliya Pituah, but at a small restaurant at the gas station on the road to the West Bank settlement of Ma'aleh Adumim. In the end, seven of the dozens of Palestinian students admitted to Winbond's training program completed the program.

"When I told Winbond's employees that we were hiring Palestinian engineers some voiced concern," Levy relates. "Some asked whether they would be bringing bombs. Others asked whether it was okay to work with enemies."

Why not hire Israelis from the periphery, such as Sderot?

Levy: "Israeli engineers cost the same - whether they're from Sderot or anywhere else."

The typical Israeli engineer will say that now the Palestinians will steal their jobs.

"That's what our engineers at Winbond asked me. I told them that if it wasn't the Palestinians it would be the Chinese."

Udi Gal, who trained the Palestinians for Winbond, says the experience was enjoyable but that the outcome is still unclear. "The intent is to create a group of employees who can take care of a project on their own, but there's a long road ahead. On the other hand, the training period for an Israeli graduate is also a long one."

Gal says the Palestinians finish university with less knowledge than their Israeli counterparts. "They focus more on software and are less familiar with hardware," he explains. "The training wasn't easy, either. The whole issue of entry permits into Israel is complicated, you have to submit a request three weeks in advance and sometimes when the date rolls around it is no longer relevant."

What about politics?

Gal: "I was careful not to talk about it. Politics is politics, work is work. I told them, even if there's a closure, if we can turn on the computer every morning and work via the Internet it'll be okay. Although there's still a lot of work to be done on the technical side, I was very surprised about the seriousness and concern they demonstrated."