RECIFE (Reuters) - Flanked by bustling cafes in downtown Recife on Brazil's northeastern coast is a little-known treasure of Jewish history in the New World -- the oldest synagogue in the Americas.

Sephardic Jews built the two-story Kahal Zur Israel Synagogue before 1641 -- most likely in 1636 -- when they enjoyed religious freedom under the Dutch, who ruled part of the northeast region from 1630 to 1654 to control sugar production.

The Mikve Israel Congregation in Curacao, a Dutch Antilles island in the Carribean, was considered by some to have been the first congregation in the Americas. But it was founded only in 1651, also by Sephardic Jews from Holland.

In the world's largest Catholic nation, whose best known icon is the Christ the Redeemer statue in Rio de Janeiro, the Recife synagogue became an important symbol of the Jewish heritage in Brazil.

Based on old maps, archaeological excavations uncovered the remnants of the synagogue, including the original Mikvah -- a bath for religious ceremonies -- under six layers of floors. The restored synagogue reopened in December 2001.

Since then it has become one of the main stops on the city's tourist circuit and its archives attract scores of Brazilian and foreign historians.

Their studies are gradually unveiling the prominent role Jews had in early Brazilian society.

"It challenges the stereotypical view that Brazilian culture is based on a tripod of Portuguese, (native) Indians and Africans," said Tania Kaufman, head of the Jewish Historical Archive in Recife, the capital of Pernambuco state.

"We now know Jews were a fundamental part of Brazil's cultural melting pot."

'ECONOMIC DOMINANCE'

Historical records in Brazil and Amsterdam show Jews helped build the sugar industry, roads, bridges, and a basic sewage system in the northeast. Many also made money by trading slaves.

At its height in 1645, the Jewish community in Recife counted 1,630 members, the same number as in the thriving Jewish community of Amsterdam, according to Dutch historian Franz Leonard Schalkwijk.

"The economic dominance of the Jews prompted various protests (from Catholics and Protestants)," wrote Schalkwijk in his book "Church and State in Dutch Brazil."

When Dutch rule ended in 1654, Jews were expelled, killed or forced to go into hiding under the Roman Catholic Inquisition. One group from Recife defied storms and pirates to reach what is today New York, where they founded the first Jewish congregation in North America, called Shearith Israel, "the remnants of Israel."

An exhibition entitled "Pernambuco, Brazil - a gateway to New York" stirred much interest at the U.S. Center for Jewish History in 2004-05, recalls Kaufman.

The restored synagogue and renewed interest in the legacy of their ancestors is reinforcing the identity of Recife's Jewish community, which has dwindled by more than half to 300 families from two decades ago as many left for bigger cities.

In 2005, Recife received from Israel its first permanent Rabbi since 1654.

There are four synagogues in Recife but many Jews choose to celebrate their weddings and Bar Mitzvahs in the Kahal zur Israel because of its symbolism.

"It's an enormous source of pride," said Ivan Kelner, president of the Israelite Federation of Pernambuco state.

The synagogue is also at the center of a broader cultural renaissance. In November of every year, a Jewish festival offering dance, cinema, and food, from Gefilte fish to fluden, attracts around 20,000 visitors.

"The synagogue is a symbol of the revival of Jewish culture, it has galvanized our community," said Denys Sznejder, a choreographer who heads a Jewish folkloric dance group in Recife.

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