The Hot Springs Are Getting Hotter

Jaroslav Kubera, the 56-year-old chain-smoking mayor of the Czech spa town of Teplice, is a man who likes to live and let live. A bookshelf in his office, for instance, bears a SMOKING PERMITTED sign. But these days a dispute pitting Arab investors against local people is making him smoke even more than usual.

Kubera is in a tight spot. On one side are residents trying to stop a hotel and mosque from being built in the ancient resort town (pop. 53,000); on the other, private backers of the project who aim to invest up to $4 million...