Schreiber, an Israeli Jew, is not allowed to travel to his company's research and development centre in the occupied West Bank, and his 30 Palestinian engineers must apply for special permits to meet him in Jerusalem.

"I'm perhaps the only CEO in the world who can't visit the company's main office, even though it's like 15 kilometres (10 miles) from my house," he says.

As the Internet has swept away barriers and created boundless virtual communities, Israelis and Palestinians have remained divided by an all too real network of concrete walls, trenches and barbed wire.

But the same technologies that link software engineers in Bangalore to California's Silicon Valley have allowed Zvi's team to surmount the frontiers of the conflict -- and create what could be a hugely profitable product.

The software, called G.ho.st, makes use of cutting-edge "cloud computing" to allow users to create a virtual desktop -- complete with files and applications -- that can be accessed from any computer or mobile phone in the world.

"I can walk up to any computer in the world and get to all my stuff, my desktop and my files," Schreiber says. "It's more flexible, more mobile."

The information is stored on Amazon.com's data centre -- which Schreiber says is far more secure than any personal computer -- and G.ho.st administrators perform all the necessary updates and maintenance.

The first version of the software has already drawn some 200,000 users and the company hopes to increase its reach with an improved version released on Tuesday at a launch held on top of a windy hill south of Jerusalem -- a rare gap in Israel's separation barrier where the entire staff could meet.

"I've done many launches in my life, but this ranks as about the most unusual," former British prime minister Tony Blair told some 50 people who had assembled for the sunset ceremony.

"We're standing in front of this symbol of division," he said, referring to the Israeli barrier looming in the background, "but uniting in something unifying."

The idea for G.ho.st was Schreiber's, but nearly all the research and development was done by some 30 Palestinian engineers in an office in the West Bank city of Ramallah -- most working for a third of the pay of their Israeli counterparts.

Dror Globerman, who reports on the high-tech industry for Israel's Maariv newspaper, says G.ho.st's "offshore" approach to research and development could be a model for other firms.

"I think the incentives are definitely there. (The West Bank) is cheap and close, and Palestinian engineers are talented people," he says.

However, the persistent threat of political instability still encourages most Israeli entrepreneurs to look to calmer parts of the globe.

"No one can guarantee that a Palestinian engineer will always be able to reach his office or have an Internet connection," Dror says. "Israelis are used to having these fears addressed to them by foreign investors."

The employees at G.ho.st hold regular meetings by video conferencing and communicate via instant messenger, but to meet face-to-face they must drive out to the desert on the road between Jerusalem and Jericho, a no-man's land created by Israel's controversial West Bank barrier.

"It's actually a gas station," says Montasser Abdellatif, a Palestinian and the head of marketing for the firm. "Imagine -- a high-tech company."

The barrier is made up of 400 kilometres (260 miles) of concrete walls, fences and closed roads, with 87 percent located inside the Israeli-occupied West Bank, including annexed east Jerusalem, according to UN figures.

Israel says it was forced to build the barrier and restrict movement in the West Bank to contain a wave of suicide bombings in the years following the eruption of the second Palestinian uprising in 2000.

But the Palestinians have condemned the wall as a land grab that slices through villages and neighbourhoods, separates farmers from their fields and mocks international efforts to create a viable independent state.

The West Bank engineers working for G.ho.st hope that new technology can help them overcome the barrier and hasten the creation of a state by generating jobs and high-tech skills.

"We are creating jobs, we are getting good salaries, and we can work here in Palestine instead of going abroad," general manager Khaled Ayyash says.

He adds that G.ho.st is one of the only West Bank firms that gives employees share options, allowing everyone to benefit from any possible acquisition.

Ayyash blames Israeli governments for the failure of past peace efforts, but says his colleagues treat each other with the "utmost respect."

"There are no problems among us because we are all professionals," he says.

"When it comes to the users they are only going to use the product if they are satisfied with it, otherwise they will abandon it, and it doesn't matter if it was created by Palestinians or Israelis."

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