The Jordan Valley is in the grip of a severe water crisis, exacerbated by the region's various conflicts, that threatens the livelihoods of its Israeli and Arab residents. And it is transforming the landscape before their eyes.

The Ein Gedi spa, built 40 years ago on the shore of the Dead Sea -- the lowest point on Earth -- now offers a tractor shuttle to carry bathers across the kilometre (more than half a mile) of salt flats that separate it from the water's edge.

A few kilometres (a couple of miles) up the shore, a campsite that used to rent out cabins by the sea has been sucked underground by the opening of cavernous sinkholes, some more than 30 metres (yards) wide.

The first one burst open in 1998, swallowing a cabin and a cleaning woman.

"The earth swallowed her up. She fell nearly 10 metres. They made everyone leave that day and closed the camp down," says Gundi Shahal, an Israeli environmentalist who came to Ein Gedi from Germany in 1979.

"Since then it hasn't stopped. The whole campground looks like a moonscape," she says as she walks past the massive holes, one of which contains the rusted shell of a car.

Across the street are rows of dead trees, the remains of a date plantation that was closed because of the danger of the sinkholes.

Scientists have documented some 2,500 such holes, with an average of 300 new ones opening up each year.

As the Dead Sea shrinks, the level of groundwater drops and as it retreats under the surface it dissolves layers of salt, creating underground caverns that eventually collapse into the sinkholes.

The Dead Sea derives most of its water from the Jordan river, which over the past 50 years has virtually disappeared as a result of massive upstream water projects in Israel, Syria, Lebanon and Jordan.

For Mohammed Saida, a farmer in the Palestinian village of Al-Auja some 40 kilometres (25 miles) north of Ein Gedi, the Jordan river vanished completely when Israel fenced it off after seizing the West Bank in the 1967 Six Day War.

The land his family once owned along the river is now in a closed military zone and they have to rely on village wells and a seasonal underground spring.

During the winter, the spring spouts up to 2,000 cubic metres (70,000 cubic feet) of water a day but in the summer and early autumn it is reduced to a squalid puddle.

"This valley floods every year, but we have no dams so it all goes into the Jordan," Saida says. Israel restricts the building of dams and drilling of wells by Palestinians in the West Bank.

At the foot of the valley sits a water pump freshly painted blue and white like the Israeli flag. Inside an engine pumps water for Israeli settlers and Al-Auja residents.

Per capita water consumption in the West Bank stands at 50 litres (around 13 gallons) a day, according to a World Bank report published this month, about two-thirds less than the target recommended by the World Health Organisation.

-- Red-Dead Canal: peace plan or pipe dream? --

Israel uses around 83 percent of the water originating in the occupied territory, with the rest going to the Palestinians, whose annual water extraction has dropped by around 10 percent in the past decade, according to the same report.

"(The Israelis) took the entire river, their share and ours, they took the land, and now they are drilling wells to take our water," says Hussein Saida, Mohammed's cousin and a village councillor. "How can there be peace?"

Shahal and the Saidas belong to Friends of the Earth Middle East (FOEME), a group of environmentalists from Israel, Jordan, and the West Bank.

They have long lobbied for a project to rejuvenate the Jordan valley and the Dead Sea by using desalinated water from the Mediterranean to meet upstream demands.

But the idea getting the most attention, and dividing scientists and environmentalists, is the proposed construction of a massive canal between the Red Sea and the Dead Sea.

Israel, Jordan and the Palestinian Authority have expressed tacit support for the canal and the World Bank is currently carrying out a feasibility study on their behalf which it expects to complete by 2010.

The idea received an added boost earlier this year when Israeli billionaire Yitzhak Tshuva unveiled detailed plans and said it could be funded by private investors.

Proponents of the scheme imagine a Dubai-style project that would restore the Dead Sea, generate electric power and fresh water, transform the arid Arava valley into a flourishing metropolis, and bring about peace in the Middle East.

But the proposal has also drawn fierce criticism.

Dan Zaslavsky, a former Israeli water commissioner who has been following the issue for nearly 30 years, calls the idea "unbelievably idiotic, problematic and unworkable."

He cites an Israeli government-commissioned study carried out in the early 1980s that found that adding seawater to the Dead Sea could create massive amounts of gypsum crystals, turning the water milky white.

Other critics point to the high cost of transporting the water, the dangers posed by fault lines running under the proposed route, and the impact that massive new housing and tourist developments could have on local ecosystems.

Experts who support the project counter that the environmental problems can be overcome and that the potential benefits, both in providing more water and cementing regional peace, are worth the risks.

"It's not a ridiculous plan and it has a lot of logic to it," says Hillel Shuval, a professor of environmental sciences at Hebrew University who is reserving judgment on the project until the World Bank study is complete.

"A billion-dollar project built by Israeli, Jordanian and Palestinian contractors has a geopolitical value and a peace-building value that is very important."

Shuval says proposals to restore the Jordan river with desalinated water are "neither logical nor rational" because of the high costs involved.

Regional politics could again prove to be the decisive factor in the fate of the Jordan valley and the Dead Sea, since water is one of the so-called "final status" issues that Israel and the Palestinians have left to a final peace agreement.

The two sides formally returned to the negotiating table in November at a conference in the United States, but have made little visible progress since.

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