Is there peace in pesto? Salvation in salsa? As war rages in the Holy Land this Christmas, one American entrepreneur is hoping so, writes Dominic Rushe in New York.

Daniel Lubetzky’s New York-based PeaceWorks aims to bring warring factions together by giving them a common goal — making money. The company has factories producing chocolate, pasta sauces and crisps in Israel and South Africa and is looking at investments in Northern Ireland and Bosnia. One of its original factories is in Nazareth, Jesus’s childhood stomping ground.

One of its Jewish-run companies buys jars from Egypt, sun-dried tomatoes from Turkey and olive oil from Palestinians. In another, Jews and Arabs work side by side making chocolate bars.

Lubetzky, son of a Holocaust survivor, founded the firm in 1994 when he was 25. “At college I did economics and the Israel conflict as my treatise and came to believe that the private sector should be encouraged to help. Business has the power to transform situations,” he said.

Ben Cohen, the Ben & Jerry’s ice cream founder, is on the board and the company is looking at a joint venture with the United Nations and the World Bank. Its Moshe & Ali spreads, featuring a cartoon Jew and Arab, are sold across America. September 11 and the latest round of violence in Israel have made things difficult for Lubetzky’s firms and have led him to question his philosophy. Now he says he accepts he will never transform the views of extremists. It is the more reasonable majority PeaceWorks is aiming for.