SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

December 22, 1999
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Date of Report (Date of earliest event reported)

AMERICAN REAL ESTATE PARTNERS, L.P.
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(Exact Name of Registrant as Specified in its Charter)

Delaware                  1-9516                   13-3398766
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(State of Organization)    (Commission File Number)      (IRS Employer
Identification Number)

100 SOUTH BEDFORD ROAD
MT. KISCO, NY 10549
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(Address of Registrant's Principal Executive Office) (Zip Code)

(914) 242-7700
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(Registrant's telephone number, including area code)

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(Former Name or Former Address, if Changed Since Last Report)

ITEM 5.    OTHER EVENTS.

On December  22,  1999,  the  Registrant  announced  that it has reached an
agreement in principle to acquire  Bayswater  Realty and Capital Corp.  and
its affiliated entities from the Registrant's  Chairman, Mr. Carl C. Icahn.
The purchase price for the acquisition will be $90 million payable in cash.
The  acquisition,  which is  subject  to  completion  of  satisfactory  due
diligence,  the negotiation of definitive  agreements and customary closing
conditions, is expected to close in the first quarter of 2000. Reference is
made to the press  release,  dated  December  22, 1999,  annexed  hereto as
Exhibit 20.2, for information regarding the announcement.

ITEM 7.    EXHIBITS.

Exhibit No.                         Description of Document
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20.2                           Press Release, dated December 22, 1999.

SIGNATURES

Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned hereunto duly authorized.

AMERICAN REAL ESTATE PARTNERS, L.P.
(Registrant)

By:   American Property Investors, Inc.,
General Partner

By:  /s/ John P. Saldarelli                  
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John P. Saldarelli
Secretary and Treasurer

Date:  December 22, 1999

EXHIBIT INDEX

Exhibit Number       Description                                      Page No.
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20.2            Press Release, dated December 22, 1999.             E-1

[AMERICAN REAL ESTATE PARTNERS, L.P.]
(Logo)

CONTACT:          John P. Saldarelli
Secretary and Treasurer
914/242-7700

FOR IMMEDIATE RELEASE

AMERICAN REAL ESTATE PARTNERS, L.P.
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TO ACQUIRE BAYSWATER REALTY AND CAPITAL CORP.
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MOUNT KISCO, NEW YORK,  DECEMBER 22, 1999 - American Real Estate Partners,  L.P.
(NYSE:  ACP) today  announced  that the  Company  has  reached an  agreement  in
principle  to acquire  Bayswater  Realty and Capital  Corp.  and its  affiliated
entities from the Company's Chairman,  Mr. Carl C. Icahn. The purchase price for
the acquisition will be $90 million payable in cash. The  acquisition,  which is
subject  to  completion  of  satisfactory  due  diligence,  the  negotiation  of
definitive agreements and customary closing conditions,  is expected to close in
the first quarter of 2000. The terms of the  transaction  have been reviewed and
approved by the  Company's  Audit  Committee and will be subject to receipt of a
proper fairness opinion from a recognized investment banking institution.

Bayswater is a real estate investment,  management and development company which
has focused  primarily on residential  land development and the construction and
sale  of  single-family   homes.   Bayswater   presently  owns  ten  residential
subdivisions  under  development in New York and Florida.  The acquisition  will
enable the  Company  to better  diversify  its real  estate  portfolio  with the
assistance of Bayswater's  experienced  development  team. In recent years,  the
Company has engaged Bayswater to perform development,  construction  management,
marketing and sales services with respect to residential  sites being  developed
by the  Company  located  in New  Seabury,  Massachusetts  and  Armonk  and East
Hampton, New York.

American Real Estate Partners,  L.P. is a master limited  partnership  primarily
engaged in acquiring and managing real estate related investments with a primary
focus on office, retail, industrial, hotel and residential properties.

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