Israelis play backgammon in the mixed Jewish-Arab port of Jaffa, just south of central Tel Aviv.

The complex of some 37 old and rundown red-roofed buildings was a familiar sight in Tel Aviv.

Few Israelis gave a second thought to the architecture - so atypical of its location - or the history contained in the green plot surrounded by traffic and high-rise office buildings.

Now that neglect is about to be replaced - by what developers are hyping as the most hip and chic, not to mention biggest, renovation project in the Middle East.

The 140-year-old buildings will be turned into restaurants, cafes, galleries and designer shops, in a green, car-free expanse in the heart of the Mediterranean city, scheduled to open in late 2012.

The buildings were built by German colonists who settled in what was then part of the Ottoman Empire in the late 1800s, and called themselves the Templer Society.

Many Israelis know little to nothing about the protestant sect, which left Germany to build a hard-working community in the Holy Land, believing it would promote the second coming of the Messiah.

Some confuse them with the Knight's Templar, the legendary Crusaders' order. In fact, the German Templers chose their name because they saw each individual as a “living building stone” of God's spiritual temple.

They built their first colony in Haifa in 1868 and five more over the next 10 years, one of them near the ancient port of Jaffa in 1871 -almost 40 years before Tel Aviv was founded.

“So the real roots of Tel Aviv are right here,” says Avi Moshe Segal, a tour guide specializing in the city's history, as he shows For more than 80 years, during which their number reached more than 2,000, the Templers were instrumental in developing the land - introducing European agricultural techniques, opening banks, hospitals and hospices, and paving roads.

They were also fervent patriots. Their German nationalism, unaffected by their relocation to the Holy Land, saw many sympathize with the Nazis and a number were even members of the Nazi party.

During World War II, the British, who ruled the territory under a League of Nations mandate and regarded the Templers as enemy citizens, interned them in their own communities and then deported many to Australia, where the group still exists.

The remaining few were expelled not long after the British mandate expired and Israel declared statehood in 1948. A settlement compensating them for their lost property was signed in 1962.

Israel used the empty colony now inside Tel Aviv as its temporary seat of government - Jerusalem being under siege during the war that erupted after the Jewish state's creation.

Since then, Israelis have simply called it The Qirya (“headquarters” or “compound” in Hebrew.)

Indeed, the northern half, walled off and not included in the renovation project, still houses the Defence Ministry and the Israeli military's general staff headquarters.

Few are aware why the former Templer quarters, now swallowed up by modern-day Haifa and Jerusalem, are still referred to as “the German colony,” or that the well-known Jaffa oranges label was started by the Templers.

At the Tel Aviv site, tour guide Segal points to one of the buildings, conspicuous by its simplicity. For nearly four decades, it served as the Mossad intelligence agency headquarters. A large antenna is still there.

Another room housed the state vault and mint. “The first money for our War of Independence came from this room,” he says.

The site will also include a business hotel and 13 office and residential towers, while one Templer house will be turned into a museum by the municipality.

The Templers named the colony Sarona, after the Sharon coastal plain mentioned in the Bible.

For 64 years the name was unused, but history comes a full circle when the new entertainment complex will take that name.Sapa- - dpa