The shops and stalls in Jerusalem’s Mahane Yehuda market now offer modern as well as traditional wares. You can buy tomatoes, onions and parsley outdoors, or enjoy a meal in an upscale gourmet restaurant.

Jocelyn Levi runs a hand through her dark, groomed bob as she passes pushcarts and crowds at the entrance to the Mahane Yehuda marketplace in downtown Jerusalem.

On the shuk’s main artery, Mahane Yehuda Street, she stands out in her pressed white pantsuit and oversized Jackie-O sunglasses among vendors hawking hummus, cheese, spices, produce, bread, clothes, fish, meat and souvenirs.

“Ma’am! Ma’am!” a merchant shouts in Hebrew. “Watermelon, shekel and a half.”

His voice quickly fades into the buzz of competing vendors and throngs of shoppers—primarily low- and middle-income immigrants, students, foreign workers, the elderly and the religious locals.

Weaving her way through the small maze of alleyways, Levi arrives at Shazif Street, where, past a butcher and cheap kitchen tools, she eyes trendy twenty-somethings sipping mint lemonade and iced coffee on the terrace of Mizrahi, the shuk’s first espresso bar and café. Levi’s aim is not to bargain hunt like most of the shoppers passing by, but to linger inside at the bar over a demitasse of imported Italian espresso, with the ambiance of the shuk in the background. “I used to duck into the shuk sometimes just to feel the place,” she says. “But there never were places like this before, where you could get a real espresso.”

When the European-style café opened in 2003, it was indeed an anomaly in the market, renowned to locals and tourists for its scruffy and spicy Middle Eastern character and Old World way of shopping, elbow to elbow and stall to stall.

For those in search of the sweetest or cheapest produce, nuts or bakery items, for example, there have always been multiple options ranging in price and quality throughout the dozen or so alleyways. Though the offerings are not organized by products, stalls selling lower-priced goods geared toward the poorer and ultra-Orthodox residents remain largely unchanged on the side of the market bordering city center’s Yaffo Street.

But toward the other side of the shuk, in the direction of Agrippas Street, a very slow gentrification has taken hold, as vendors realize that trendy rather than traditional spots can attract more tourists and affluent residents.

In four of the new stores, Israeli-designed women’s clothing and accessories go for prices that are 10 to 20 times the price of the nearby bargain-bin items. When Ronit Gilboa and Shoshi Borenstein were looking for a location for their clothing boutique, Alei Te’ena, they were lured by the possibility of opening in such an unexpected setting.

“We sat with Eli [Mizrahi] in his café and he said, ‘Bring your store here,’” Gilboa recalls. “There’s a special beauty here; we love this authentic environment.”

Kirshina, selling natural Israeli-made beauty products, opened its doors on Afarsek Street a few months ago. An old stall was remodeled to look like a country store, with antique black-and-white tile floors and creams and soaps in glass jars. In all, there are more than 10 new cafés and shops.

Some old-timers are also introducing new products. Basher’s on Etz Ha-Hayim Street, a cheese store 50 years in business, is still selling $2.50-a-pound cheeses but now also offers $80- a-pound specialty cheeses and high-end wines.

“I came up with the idea because the population of the shuk started to change,” says owner David Basher. “There are more society people now. Regular people used to argue over every shekel. Now I have cheese for all kinds of people and winetastings.”

The seeds for change were planted five decades ago, when Eli Mizrahi, owner of Mizrahi Café, was a young delivery boy shlepping goods on his family’s pushcart. By 1964, he had his own stall selling dried fruit, nuts and seeds. He sat for years studying the customers and imagining the possibilities for the market.

In 2001, when Mizrahi was already head of the shuk vendors’ association and terror attacks were scaring customers away, he had a radical idea beyond beefed-up security to bring business back. First, he started talking to vendors and city officials about making the shuk more attractive. He eventually convinced them to invest some $7 million of public and private money to widen alleys, lay smoother cobblestones, fix and expand the roof and renovate the infrastructure. Next, Mizrahi looked out at the butcher, haberdashery and pots and pans stalls and envisioned a coexistence with modern shops and restaurants.

“My espresso bar was the first,” says Mizrahi, “but there are plans in the next year for even more cafés, restaurants, gift stores and shops.”

In the smallest and poorest section of the market known as the Iraqi shuk, Mizrahi opened his second place last year, a gourmet bistro serving European-influenced Mediterranean dishes. Wedged between dilapidated hummus bars and smoking rooms that attract retired and unemployed men who play backgammon and drink instant coffee all day, Tzaho’s upscale menu draws journalists, diplomats, lawyers and tourists. Looking up from a game of backgammon next door, Moshe Rahamim says that even though one can buy a meal with a soda in most places in the shuk for $3, and the new places cost three to four times that, there’s no hostility about the gentrification.

“There’s a place here for the rich and the poor,” he says. “We should all live in harmony.”

Nir Avieli, a food anthropologist at Ben-Gurion University of the Negev, explains that Mahane Yehuda is effectively finding its place between modernity and tradition. “If markets don’t transform, they die,” he says. “The Carmel shuk [in Tel Aviv] is transforming along similar lines [as Mahane Yehuda], while the markets at Haifa and Beersheba, which are not, are slowly fading out.”

It’s not a question of supply and demand, but social relations, Avieli says: “[In] Mahane Yehuda, instead of one zone for vegetables and one zone for fish, you see sets of one fish, one vegetable and so on. This defies the order of any market in the world but [makes sense socially]. Each section offers everything to a specific population: yuppie seculars, haredi or veteran Mizrahim. The aesthetic, prices and merchandise are affected as the market reacts.”

Yohanan Ben Yosef, 73, looks out from his three-generation haberdashery on Shazif Street, remembering the way the shuk used to be before the state was established. “I remember the British wandering around,” he says. “There were only a few thousand Jews in Jerusalem then and most were Mizrahim. Arabs from the villages used to sell us their vegetables; Jews didn’t deal in agriculture then. Jews sold fabric, fish and pots and pans.”

In the 1860s, the first Jerusalem neighborhoods began to be developed outside the Old City walls; the Mahane Yehuda neighborhood was built in 1887, and the shuk was established haphazardly on a nearby lot shortly thereafter. Jewish and Arab vendors set up their daily wares randomly, and locals bargained for the lowest prices.

For the first two decades, during the last years of Ottoman rule, the shuk became so dirty and neglected that when the city came under British rule in 1917, the authorities wanted to condemn it as a public health hazard. But Shmuel Mushayoff, the Jewish city council leader, a banker, saved the market by offering attractive loans for cleaning and building. The lot reopened in 1931, when vendors paid privately for plots to build stalls. Though cleaner, the overall design remained largely arbitrary.

The shuk was the only large-scale place to shop in Jerusalem until the advent of supermarkets in Israel in the late 1960s. Shoppers with cars deserted the shuk for American-style markets with their parking lots, shopping carts, air conditioning and organization. But despite setbacks from competition and occasionally from security concerns, the shuk continues to thrive.

While the market has, in the last year and a half, shifted in a more commercial and flexible direction in places, it still retains its intense Oriental ambiance. Young boys working for vendors pull pushcarts loaded with flatbreads through the alleys. Piles of seasonal fruits, vegetables and herbs remain staples shuk-wide. Vendors shout their rising and falling prices, cigarettes often dangling from their lips. The fish are still laid out for sale in crates, sometimes wriggling, sometimes frozen and often swarming with flies.

But whether the shuk will be able to preserve its local ambiance is up for debate.

Every week, Dalia Gilad, with her two grown daughters in tow, drives half an hour each way to the shuk from Neve Yaakov in northern Jerusalem.

“I love everything here,” she says, “the olives, pickles, prices—everything.” But, she adds, she doesn’t plan to start buying expensive clothes, food or coffee in the new Tel Aviv-style shops.

A grandmother named Geula says that she comes to the shuk just to recall smells and sights of the old-time Jerusalem she knew as a child. “I don’t want the shuk to become like Tel Aviv,” she says. “Let them take their trendy places anywhere else.”

The shuk will never feel like Tel Aviv, though, counters a woman in her thirties named Raheli, who says she is “in shock” over the changes: “It’s clean and nice here, but it’s still the shuk. It won’t be like Sheinkin [a tony street in Tel Aviv], where everyone is secular,” she adds. “No way.”

Despite some ambivalence, old and new customers keep coming. Ronnie Ellenblum, a Hebrew University geography professor and an avid fan of the shuk and its changes, explains that “the espresso bar is not a modern, city espresso bar, because outside you still have the yelling, noise, dirt, people dressed differently, the richer, the poorer. Being ‘authentic’ isn’t the only duty of a Middle Eastern place.”

The shopkeepers aren’t philosophical about the changes; they are just happy to see the shuk crowded.

“What a sight to have a [high-end clothing boutique] in the middle of the shuk,” says butcher Elazar Ozeri, sitting on a straw stool beside a 40-year-old poster of a cow. “We’re not afraid of changing the atmosphere.”

At one of the dozen falafel stands, co-owner Shalom Levy adds that a little gentrification means more people in the shuk—and more business for everyone.

A number of forces may ensure that the shuk will never become a modern mall or be largely bought out by boutiques.

“The character of the shuk won’t change,” says urban planner Yisrael Kimhi of the Jerusalem Institute for Israel Studies. “The trend of new cafés and restaurants…is going to grow. But the local ultra-Orthodox residents and those who come… because it’s picturesque, because they love the hummus or because they can’t afford it elsewhere, will continue to shop there. Most of the shopkeepers have a form of rent stabilization. They pay very little, and in many cases the business goes from father to son.”

Eli Mizrahi, who set the new pace of the shuk, may one day be remembered as the man who redefined the boundaries of a Middle Eastern environment in Israel.

On a recent Friday, elderly men sitting on stools and leaning on canes are taking a rest from shopping or just passing the time. As the sun starts to set and shadows cross the marketplace, vendors lower their prices and step up their calls, trying to rid their bins of perishables before nightfall. Hoards of shoppers hunting for the best bargains fill their bags.

Religious Jews come to sing or play instruments before Shabbat. Some trendy couples pass them all by and head deeper into the shuk for a drink.

Eli Mizrahi jangles his keys and smiles.