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Israeli theatre company Habima's version of The Merchant of Venice at the Globe is dividing the arts world. Boyd Tonkin hears their side of the story

As a fierce May sun scours Tel Aviv's Bauhaus-style "White City", it's cool down in the compact "cellar" theatre of Habima.

One of four auditoriums in the sleek, streamlined headquarters where Israel's national theatre has returned after the building's five-year restoration, it has seating on three sides and eyeball-to-eyeball contact between actors and audience. Ilan Ronen, Habima's artistic director, learned his trade with Mike Alfreds at the Khan Theatre in Jerusalem before running Tel Aviv's other leading company, the Cameri. He chose this intimate basement as the best preparation for Habima's two performances in Hebrew of The Merchant of Venice, part of the Globe's multi-lingual Shakespeare festival.

The actors run through a few scenes for me, including Shylock's "Hath not a Jew eyes?" speech. Bruised, plaintive, bewildered more than furious, Yaakov Cohen makes a heart-rending Shylock. A Sephardic Jew who migrated from Morocco, Cohen proved a divisive choice for an always-contentious part. "It's the first time in Israel that a Sephardic actor has played this role," says Ilan Ronen, who thinks that prejudice against Jews of Middle Eastern origin persists. When people criticised the casting, "the official reason was that he's a comedian. The unofficial reason is that he's a Sephardi."

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