Feb. 26, 2003 -- DUBAI, UAE -- While the rest of the Persian Gulf braces for war, this wealthy emirate is preparing for Tiger Woods. 

Dubai bills itself as the Venice of the Gulf, a sparkling hub of entertainment and commerce. And it is putting the finishing touches on the world's largest man-made island, part of a plan to draw 15 million tourists a year by 2010. 

But officials here fear that if war breaks out between the United States and Iraq, it will sidetrack their efforts to become a worldwide tourist mecca. 

Woods and Ernie Els are scheduled to play in the Dubai Desert Classic March 6-8. The Dubai Open tennis championship has drawn top men players this week ( Justine Henin-Hardenne defeated Monica Seles to win the women's portion last week). Next September, the International Monetary Fund and World Bank are scheduled to meet here. 

Tourism officials had planned an advertising blitz and direct flights from New York to capitalize on the events and tap into the American tourism market. But with talk of a new Gulf War, those plans are now on hold. 

"This was the year they were going to launch Dubai as a brand in America," a Western diplomat said. "But they think it's a bad idea right now. They will go ahead with the events and just hope somebody shows up." 

Dubai is one of the United Arab Emirates -- a federation of seven small states with a total area slightly smaller than Maine. The UAE has a central government, but the seven emirates retain some independent powers. 

The UAE has highest per capita income in the Gulf, buoyed by 100 years of oil reserves and a diversified economy of shipping, insurance and banking. Because of a small, wealthy population -- 2.4 million, including 1.5 million non-nationals -- the UAE suffers none of the political and religious strains of neighboring Saudi Arabia, which has a larger and generally poorer populace. 

In Dubai, drinks flow, the cuisine is cosmopolitan and the beaches are pristine. 

The emirate bills itself as the safest place in the Gulf. Only five incidents of theft were reported during the Dubai Shopping Festival earlier this month. The month-long shopping and cultural fete drew about 2.5 million people. 

Although unknown to most Americans, Dubai is already visited annually by about 3.6 million visitors from Europe, the Middle East and Asia. 

"We hope it will be everyone's second city," said businessman Salah Khamas, who owns travel agencies, hotels and Office Mart, a retail office supply chain. 

In anticipation of reaching that tourism goal, a $4.2 billion airport expansion is underway that will increase capacity from 3.5 million passengers a year to 21 million. 

But the tourist market here is just now recovering from a plunge after 9/11. A spokeswoman for a major hotel chain said occupancy lagged during the shopping festival despite rosy government attendance figures. "We've got cancellations rolling in," she said. 

A new war in the Gulf could be disastrous to the emirate's tourism trade. 

"We kind of live in this bubble in Dubai, this perfect world," said Roia Jabari, an expatriate Iranian-American from San Diego, Calif. "But this war could affect us big time." 

Businessman Sultan bin Sulayem remains confident the future is bright despite the darkening war clouds. He is completing a $2.5 billion artificial island off Dubai's coast called The Palm. 

Built in the shape of a palm tree and crescent, the 1,750-acre fantasy island features 37 miles of new beaches, instantly doubling Dubai City's beachfront. It will be home to multi-million dollar villas, luxury condos and ritzy resorts. All of the lots sold out in 72 hours last year, Sultan bin Sulayem said, mostly to buyers from other Gulf states. 

Presently, The Palm is the largest man-made island in the world. But that will change when bin Sulayem completes his second project, Jebel Ali Palm, a few miles down the beach in 2005. It is slightly larger. 

Bin Sulayem predicts Dubai's economy will weather a war without too much difficulty. Wealthy refugees from the war zone likely will fill up hotel rooms cancelled by tourists, a phenomenon that occurred during the last war with Iraq. And, he said. Dubai businessmen will likely turn a profit rebuilding Iraq when the war is over. 

"We've been through these crises before," he said. "The first thing it affects is tourism, but we recover very quickly. It is unfortunate. But we're used to war here." 

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(c) 2003, The State, Columbia, S.C. Distributed by Knight Ridder/Tribune Business News.