This paper examines a boundary conflict in Israel in which urban and rural local authorities struggle over the municipal affiliation of regional industry and its property taxes. The study is based on participant observation and on detailed examination of minutes and material collected by the boundary commission serving as an advisory body to the Minister of Interior. The analysis of the conflict shows that structural social divisions and political processes tipped the balance of power in the country and triggered the boundary conflict. Basically, the conflict signifies a process of power-building in the urban periphery. The claims of the peripheral towns, essentially based on social justice, were checked by a combination of vested political interests, legal-bureaucratic constraints and prevailing forms of knowledge. The latter are manifested in some basic assumptions as to what a city is. In this paper, the considerations against and for boundary change have been translated into operational criteria. These criteria have been grouped into four categories: efficiency, effectiveness, social justice and legal bureaucratic constraints. Based on these criteria, a hierarchy of solutions to the conflict has been suggested. Due to legal-bureaucratic considerations the second best solution of maintaining the status quo was opted for by the boundary commission.