Dozens of excited visitors gather every evening on the seashore near the Israeli town of Kiryat Yam, near Haifa.

According to numerous eyewitnesses, the mythical sea creature looks like a cross between a little girl and a dolphin, and only comes out at sunset. "People are telling us they are sure they have seen the mermaid and they are all independent of each other," said Natti Zilberman, a local council spokesman.

The creature, according to the fast-growing local legend, performs a series of acrobatic tricks before disappearing beneath the Mediterranean waves.

Whatever the truth of the tale, it has done wonders for the tourist economy.

Local officials are now offering a cash prize of $1 million for the first tourist to take a photograph of the mermaid.

"I believe if there really is a mermaid," Zilberman said, "then so many people will come to Kiryat Yam, a lot more money will be made than $1 million."