(AFP) A saxophonist plays to indifferent passers-by before being interrupted by a wailing police siren – a scene indicative of Jerusalem nightlife subdued by more than two months of unrest.

“People have stopped going out to party, and even worse, they have got used to no longer going out,” says Haggai Hirshman, who organizes events as part of a campaign to encourage young people to reinvest in downtown Jerusalem.

“The security situation has calmed somewhat, but they are still afraid.”  

A wave of attacks by Palestinian terrorists has hit Israel since October 1, included unpredictable Palestinian knife and car-ramming attacks targeting Israeli civilians and security forces alike.

Jerusalem was at the heart of tensions in the initial weeks, but attacks in the city were later reduced as security forces deployed massively. Many of the initial attackers came from Arab neighborhoods in eastern Jerusalem.

Caution and concern remain, however.

Bars and restaurants in the Jewish neighborhoods of Jerusalem, where young, hipster Israelis as well as some Palestinians from gather for a pint and perhaps smoke a joint in the alleyways, have seen a sharp reduction in crowds.

When a bar closes in Jerusalem, known more for its religious devotion than its nightlife, people take notice. Some worry that the relatively small number of spots where like-minded young Israelis and Palestinians can gather will be further reduced.

“The city center has been hit hard: five establishments – three bars and two restaurants – have closed this week,” says Hirshman.

“It’s a big blow.”

At the beginning of the current wave of violence, as residents stayed away from public spaces and pressed for increased security, bar and restaurant owners said that they had seen this all before.

‘Why stay open?’

They have lived through the first and second deadly Palestinian intifadas (1987-1993 and 2000-2005) with the waves of murderous terrorist attacks that came with them.  

But some are now questioning how long they can cope with the economic damage.

“The atmosphere in the city has sunk,” says Lior Moshe, owner of several pubs who has seen sales plummet by between 70 and 80 percent.

“We’re going to get by maybe another two or three months before asking ‘why stay open? I lose less by staying at home’.”  

In late November, the government announced an emergency aid plan for Jerusalem businesses, releasing 100 million shekels (20 million euros, $25 million) under a program to draw foreign tourists back to the city.

Among the hardest-hit have been the small, alternative bars that can feel more hipster than Holy Land.

“Several of us have taken the decision to close,” says Shay Freedman of Radio bar, which plans to shut down like its neighbor Uganda – both of them bohemian destinations in downtown Jerusalem.

Many Israelis prefer to go out in Tel Aviv, the far more secular city 45 minutes away, to try to forget the seemingly intractable conflict – although Tel Aviv has itself seen a number of stabbing attacks.

“Why should I put all my energy into a project with so much uncertainty?” Freedman asks as he watches over preparations for a closing party, a last chance to recoup some losses before shutting down for good.  

“We know all of this is eventually going to calm down, but when? And how long will the situation remain calm until it worsens again?”

Arutz Sheva Staff contributed to this report.