It happens every year around this time: Israelis celebrate the founding of their state in 1948 while Palestinians solemnly mark the same period in history they call the Catastrophe, and never the twain shall meet.

Except, that is, when people insist that they do. On this hilltop not far from Haifa, Israelis and Palestinians are gathering for a two-day event that incorporates both narratives under the banner of "Together in Pain, Together in Hope." A program marking both Haatzmaoot and Nakba – "independence" and "catastrophe," respectively – aims to expose participants to the experience of the other while not denigrating one's own. For some, this is one small route to the elusive Middle East peace that many of their compatriots see as passé.

Another round of Fatah-Hamas unity talks ended fruitlessly Tuesday in Cairo, with Palestinians still unable to reach consensus on how to respond to international demands for peace negotiations. On the Israeli side, the rise of a new center-right government that has not affirmed its commitment to a two-state solution. This diplomatic stalemate has resulted in a dominant perception among Israelis and Palestinians that things are only going worse. The least one can do, many feel, is to spend these emotionally charged days with others who think like them.

While Jews and Arabs at this joint event don't claim to be the majority, they do appear to be growing in number – from 40 when the gathering started in 2003 to 230 participants this year, not including scores of latecomers who had to be turned away for lack of space. What's also noticeable, both the organizers and returnees note, is that the event is continually drawing new faces, including more "mainstream" people and not just year-round specialists in peace and coexistence work.

"I felt after this last war in Gaza, I couldn't just celebrate Independence Day as usual, so I was glad to find another framework entirely," says Beni Gassenbauer, a dentist who lives in Jerusalem and immigrated to Israel from France 30 years ago. "I didn't see myself staying in Jerusalem and having a party as if nothing has happened."

Still, the idea of sharing the most important secular holidays in the Israeli calendar – Tuesday was Memorial Day, honoring war veterans and victims of terrorism, and Wednesday is Independence Day – with Palestinians commemorating the Nakba (officially celebrated May 13 this year) was one he felt he'd do better to keep from his family.

"My family is very right-wing, and we find it harder and harder to speak about politics," Dr. Gassenbauer says. "I didn't tell my father I was coming here."

Nadia Mahmoud Giol, who grew up in a small Arab village in the Galilee and now lives in Upper Nazareth, has come back to the gathering for a second year. Last year's experience so moved her that she convinced a few other Palestinian friends to come. Others told her she was wasting her time.

"I heard reactions from Arab friends saying, 'the Jews don't believe the truth, they don't believe in our Nakba,' and I say, 'You haven't met them to talk about it,' " Mrs. Giol explains. "People says it's nonsense, these gatherings – you're just talking. But I don't think so; I think it's crucial. And I think being here has an effect, in that you affect the people around you when you go home. As for me, I'm trying to bring up my children to know both sides of the story."

Take my shoes, and stand in them

At the event, participants hear not just "sides" of the story, but real, personal tales. The crowd listened to two witnesses to the 1948 war. Issa Dhabit, 10 years old when the war broke out, talked about the fearful experience of Israeli soldiers taking over his town of his Ramle, and his family's dispersion around the globe. Polish-born Selina Ortner-Shatil told a harrowing story of surviving the Holocaust and making it to pre-state Palestine, only to lose her beloved husband of 10 months in the war for Israel's independence.

Afterward, they were among the many who lit candles dedicated to fallen relatives, recent victims of the conflict, and people slain in the cause of peace – from Israel's Yitzhak Rabin to Egypt's Anwar Sadat.

Yair Boimel, a historian from Haifa University, gave an overview of the 1948 war and told the rapt crowd – which was 80 percent Jewish and 20 percent Palestinian, reflecting Israel's demographics – that the majority of Palestinians who left in that year were expelled, as opposed to having fled. This point, made by a cadre of Israelis academics known as the "new historians," is considered crucial by many, because the traditional Israeli explanation is that most of the local inhabitants left of their own accord, encouraged by invading Arab armies.

It might seem like splitting hairs, but here yesterday's issues impact tomorrow's peace talks. Should Israel offer Palestinians compensation as part of a comprehensive peace deal? Should Palestinians have their demand for a "right of return" recognized?

Rare eye-to-eye conversations

Just last week, Israeli Prime Minister Benjamin Netanyahu told Washington's Middle East peace envoy, George Mitchell, that peace with the Palestinians will come only if they recognize Israel's existence as a Jewish state. Translation: Only if Palestinians give up the demand for a right of return for refugees from 1948. Israel's controversial foreign minister, Avigdor Lieberman, has extended his definition of the Israel-Palestinian conflict by saying that it must include a solution to the tensions over Israeli Arabs, who have increasingly come to identify as Palestinians.

Eyeing Israel's Arab minority as a demographic threat, Lieberman suggested that a peace deal should include a land swap, in which areas of Israel with a high concentrations of Arabs close to the West Bank be transferred to the jurisdiction of the Palestinian Authority.

Lieberman's meteoric rise makes it clear that this week's joint event has relevance even though its participants don't include Palestinians from the West Bank and Gaza Strip. Most Palestinians from those areas can no longer obtain permits to enter Israel. But even if they could, the conditions for such a meeting is are not ripe, says Michal Talya, the founder and organizer for the annual gathering.

"I think coming to an event like this takes a level of inner awareness and an ability to step out of your national identity and see beyond," says Ms. Talya. Their reality of living under Israeli occupation makes it almost impossible to have the kind of eye-to-eye conversations that happen here.

"Jewish Israelis feel threatened by Palestinians, and I'm talking about just the Palestinians inside Israel. So the idea is to come together on these two days, the time when we're at the height of feeling far away from each other, and to try to heal the wounds."

Some Palestinians who came in previous years, she acknowledged with some sadness, found it harder to come this time around, given the events of the past year. "Hope seems to be shrinking, so instead of destroying, we're trying to build."