In recent decades, global mega trends –notably urbanization, globalization, democratization and decentralization - shifted global focus, mainly towards urban issues. Those mega trends affect rural areas as well. Development of rural areas faces complex challenges, including: higher costs of service delivery and infrastructure management due to size of area and population density. This is intensified by the lack of resources as local governments are under-financed and lack local sources of revenue. Rural-urban migration, the decrease in local jobs and the income generated by small-scale farming and the impact of climate change, further strengthens the challenge of making rural areas attractive and inclusive. Local authorities are in the frontline in terms of promoting sustainable inclusive rural development. They are the first institution to face these socioeconomic and environmental challenges. Within this framework of globalization and decentralization, there is a growing understanding that local authorities need to be proactive in identifying and leveraging their uniqueness and competitiveness to promote tangible development and ensure that local economy, communities and institutions will benefit from its fruits; and reduce its dependency on external stakeholders. Furthermore, decentralization processes are expected to create new responsibilities for local governments. In Israel, rural municipalities are faced with challenges such as managing open spaces, introducing innovation and non-agricultural economic activities, without sufficient financial support, tools and regulations by central government. In this context, rural local authorities have a key role in promoting sustainable, inclusive local development; in which planning is a key tool. Yet, plans often remain unimplemented and rarely generate sustainable local benefits. The presentation reviews some of these planning – implementation – local impact issues; highlighting lack of local ownership, capacities and integration of legal, institutional and financial considerations into planning.