HOUMET SOUQ, Tunisia — The whitewashed buildings in the town square gleam under a piercing blue sky on Tunisia's picturesque island of Djerba.

But cafes that would normally be bustling at this time of year are deserted as the local economy suffers from the disappearance of foreign tourists.

"There are some tourists in the hotels, but they no longer venture out into town and go to the souqs," said Lutfi Dahman, who used to take visitors on tours of Djerba's sites in his car. "Their travel agents told them that it is too dangerous to go out."

Tunisia, the first Arab country to overthrow its autocratic leader in popular uprisings that swept the Mideast, is suffering deeply from a steep drop in tourists that once fueled the economy.

Government officials describe a 50 percent drop in hotel occupancy this summer compared to last year and some 3,000 industry workers have been laid off in a country already suffering from high unemployment, said Habib Ammar, head of the National Office of Tunisian Tourism.

For a country of just 10 million people, the National Hotel Federation estimates that tourism funds directly and indirectly some 2 million jobs.

In the coastal resort of Sousse, north of Djerba, 30 hotels out of 104 have already closed down, local officials told the state news agency.

It's not just about jitters over the lingering unrest after a month of uprisings forced dictator Zine El Abidine Ben Ali to flee to Saudi Arabia on Jan. 14, but also the bloody civil war taking place in neighboring Libya — just a couple of hours drive from Djerba's beaches, connected to the mainland by a bridge.

The war has sent hundreds of thousands of refugees into Tunisia.

"The war in Libya has really made it worse, in March the feeling was things were getting better, then the war happened. There were many cancellations at the hotels," said Fawzi Jirbi, a taxi driver on the island.

On Saturday, Tunisian Tourism Minister Mehdi Houas visited Djerba after a three day sit-in by tour guides calling for government assistance.

He announced a plan to register the names of the professional guides and start giving them some degree of aid to tide them over until the crisis ends.

Jalal Bouricha, head of the local federation of hotels told the official news agency the whole area of Djerba and the nearby coast had seen a 48 percent drop in arrivals and demanded their own international tourism promotion campaign.

The Tunisian state has been trying to lure back the tourists, with campaigns targeting wealthy Algerians to come visit — though that hit a snag after there were rumors that an Algerian tourist had been kidnapped, which authorities maintain was a hoax.

There was also a controversial billboard campaign at the start of the summer on London buses and in the Paris metro poking fun at Tunisia's recent troubles: "They say Tunisia is nothing but ruins," said the poster, showing off Roman remains.

Djerba certainly has a lot to offer the visitor, with white sand beaches, traditional Berber villages, and one of the region's oldest synagogues — not to mention three sites for Star Wars location shoots.

Tourism on the island has been buffeted by unrest in the region before, and the merchants selling leather slippers and jewelry in the old market recall the drop off in visitors accompanying the first Gulf War in 1990 and the later Iraq invasion in 2003.

But even the al-Qaida bombing of Djerba's ancient synagogue in 2002 which killed 21 tourists was nothing like the current crisis they said, gesturing at the empty covered alleyways of the market — filled with goods, but empty of customers.

There are some signs of optimism. At Djerba's opulent Radisson resort a smattering of tourists, mostly speaking French, can be seen at the swimming pool and on the beach.

The management said occupancy is at 60 percent, a far cry from past summers when they were struggling to find rooms for overflow guests at other hotels, but better than June's anemic 47 percent.

On Saturday, Mustapha Kamel Nabil, head of Tunisia's central bank announced the economy had "overcome the dangerous stage."

After contracting 3.3 percent in the first quarter, he predicted at least an end to the decline in the second quarter, if not any actual growth.

It is a far cry from the robust growth rates that once wowed the region, but could indicate an end to the slide.

Tunisia is also seeing some benefit from the neighboring war in Libya, despite the loss of Libyan tourists and the influx of impoverished refugees.

With half of Libya under rebel control and a no fly zone in place, Tunisia remains the Libyan government's only lifeline and daily trucks carrying food trundle across the border from Tunisia.

"The Libyans don't produce any food themselves, so they are buying up everything the Tunisians have," said Nourredine Khlif a government inspector in Sfax, Tunisia's commercial hub and one of the few cities that doesn't rely on tourism revenues.

Tunisians also line the roads to the border selling jerry cans filled with gasoline to fuel Libyans who take them home.

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Khlif also said anyone involved in the food processing business, whether canning tomatoes or freezing chickens, has grown wealthy off the trade.

For ordinary Tunisians, though, it means that food is scarcer and prices are rising — already a perennial problem ahead of the Islamic fasting month of Ramadan, starting in August.

Jirbi, the cab driver, describes how wealthy Libyans have descended on the island, renting out properties at exorbitant rates and buying all the food. He just shook his head and hoped the war next door would soon end.

"We're just going to have to let 2011 go, and hope 2012 is better," he said.

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