The seventh century is regarded as a period of peace and quiet, usually attributed to the Assyrian hegemony-the period of "Pax Assyriaca". Following Sennacherib's campaign in 701 BCE, the westernmost parts of the Assyrian empire were pacifi ed, and most of the region was now under direct Assyrian control. The southern states of Judah and Philistia, however, remained semi-independent. Settlements had expanded into areas not densely inhabited before, such as the Judean desert and the Beersheba-Arad valleys. The economy prospered, both in terms of production and commerce. By the end of the century, perhaps following a short period of Egyptian domination, the area became part of the Babylonian empire. In the process, however, practically every coastal site was destroyed, thus sealing well-dated and usually also well-preserved seventh century strata, which are the source of the wealth of information we possess for this period. The kingdom of Judah and the Philistine cities along the coast experienced unparalleled economic prosperity during the seventh century BCE. This is evident from the surge of settlement in the fringe areas of the Negev and the Judean desert, and from the large production and trade centres unearthed around Jerusalem and at Ekron and Ashkelon. The discovery of Judahite wheat in Ashkelon, together with other available archaeological evidence of trade and the local geographical conditions, enable us to reconstruct the well-integrated economy of the region in the seventh century, and to reexamine its role within the period's larger economic structures. After presenting the evidence regarding the economic system of Judah and Philistia in the seventh century BCE, the paper will reconstruct the function of this 'local' system within the larger 'world' system, and will reexamine the role of the Assyrians, Phoenicians and Egyptians in its creation. Economy and Settlement Patterns in the Seventh Century 1 We shall begin with a short review of the fi nds in Philistia and this will be followed by discussion of the fi nds in Judah. Philistia and the Coast Settlement Patterns As far as settlement patterns are concerned, the seventh century saw a great increase in settlements along the coast, and the general settlement patterns of ancient Israel began to shift toward this region-a tendency even more pronounced during the Persian period (e.g.