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The Israeli village of Neve Shalom was founded as a place where Arabs and Jews could coexist peacefully. And over decades, it's weathered regional wars and uprisings. But last week, it became a target. Vandals entered the village and spray-painted epithets, including Death to Arabs, on the village school.

NPR's Lourdes Garcia-Navarro went to Neve Shalom. She reports that many people there fear their message of peace is increasingly falling on deaf ears.

(SOUNDBITE OF CHILDREN AT PLAY)

LOURDES GARCIA-NAVARRO, BYLINE: The village is shaded by fruit trees and flowering bushes. And underneath a painted rainbow, Palestinian and Jewish children play in the yard of Neve Shalom's school.

Families started moving to this idyllic spot at the foot of the Jerusalem hills in the mid-1970s and the school is the seedbed of the philosophy here. The students learn both Arabic and Hebrew, and Neve Shalom itself is equally comprised of Jewish and Palestinian families. Everyone here lives the coexistence ethos.

But last week, that peace was shattered.

HOWARD SHIPPIN: We discovered, first of all, that a number of tires had been punctured. And then we noticed the damage at the school, slogans painted on the walls, saying death to the Arabs. Well, of course, it's very disturbing. And certainly it's the most severe attack

GARCIA-NAVARRO: Howard Shippin is a longtime resident of Neve Shalom village. He says the Israel that surrounds Neve Shalom has been changing.

SHIPPIN: Right now, is a pretty difficult time because there is a lot of racism about, it seems to be growing - all the polls show that.

GARCIA-NAVARRO: Anwar Daoud is the school principal. He says rather than championing the coexistence model, the Israeli government gives it absolutely no support. There's no money coming in from the government. For example, a recent request to help with transportation for Arab students coming in from outlying, disadvantaged neighborhoods was turned down by the ministry of education.

ANWAR DAOUD: We believe in full equality between the Israeli citizens. And then, the Israeli government does not believe in that. The situation is that there is a very big gap between the Israeli citizens that are from Palestinian roots and the Israeli citizens who are coming from Jewish roots.

GARCIA-NAVARRO: Hezzi Shouster is a teacher at the school. He says despite the fact that Israel's population is 20 percent Arab, there are only a handful of schools like the one in Neve Shalom.

HEZZI SHOUSTER: There are five schools bi-national, bilingual, so it's not a lot.

GARCIA-NAVARRO: Shouster says people these days seem less interested in coexistence. Certainly the government, he says, is partly to blame, but he says Israelis and Palestinians are more and more entrenched in their positions. People have lost hope in a peaceful solution to the conflict.

SHOUSTER: Public opinion changed. Yeah, it's very frustrating and I'm trying to be optimist and doing my work. Yeah, it's funny that we are teaching for coexistence and understanding and compromise. And the other side is teaching something else.

GARCIA-NAVARRO: And so, in some ways, Neve Shalom has become an oasis. While its message may not resonate in the rest of the country, like-minded people still want to live here. The village is actually about to expand, bringing in dozens of new families in the next few years.

Howard Shippin says he's still hopeful that Neve Shalom can be an example for Israel.

SHIPPIN: What we are doing is very futuristic. It doesn't seem to correspond to anything that we see around us right now. But I think the idea will come into its own eventually.

GARCIA-NAVARRO: But teacher Hezzi Shouster says he feels the battle for coexistence has been lost. What we do here, he says...

SHOUSTER: It's like a drop in the sea.

GARCIA-NAVARRO: Lourdes Garcia-Navarro, NPR News.

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