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 19, 2002
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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             (IRS Employer 
File Number)          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)

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ITEM 5.  OTHER EVENTS.

On December 19, 2002 the Company issued a joint press release with Stratosphere 
Corporation, a copy of which is filed as Exhibit 99.1.

ITEM 7.  FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.

(c) Exhibits.

EXHIBIT NO.    DESCRIPTION
99.1         Joint Press Release of American Real Estate Partners,
L.P. and Stratosphere Corporation, dated as of December 19, 2002.

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
Chief Financial Officer, Secretary and Treasurer

Dated:  December 19, 2002

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Exhibit 99.1

[Letterhead of American Real Estate Partners, L.P.]

Contact:  John P. Saldarelli
Secretary and Treasurer
(914) 242-7700

FOR IMMEDIATE RELEASE

AMERICAN REAL ESTATE PARTNERS, L.P.
ACQUIRES REMAINING INTEREST IN STRATOSPHERE CORPORATION

Mount Kisco,  New York,  December 19, 2002 - American Real Estate Partners,
L.P.,  (NYSE:  ACP)  ("AREP")  and  Stratosphere  Corporation   ("Stratosphere")
announced  today that  American  Real Estate  Holdings  Limited  Partnership,  a
subsidiary of AREP, has acquired the remaining shares of Stratosphere  that AREP
does not  currently  own. The merger  closed today  pursuant to an agreement and
plan of merger  dated  February  1, 2002  following  a  special  meeting  of the
stockholders of Stratosphere at which the agreement was approved.

Under the agreement,  the stockholders  who are unaffiliated  with AREP and
Carl C.  Icahn will  receive a cash  price of $45.32  per  share,  and the Icahn
related  stockholders (other than AREP) will receive a cash price of $ 44.33 per
share. Stockholders of Stratosphere must submit their certificate and a properly
completed letter of transmittal to the paying agent in order to receive payment.
AREP will pay an aggregate  of  approximately  $44.3  million for the 49% of the
Stratosphere  shares that it does not already own. Mr. Icahn owns  approximately
86% of the outstanding equity interests in AREP.

This release contains certain forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Actual results may vary
due to the risks and  uncertainties  which exist regarding the matters contained
in the forward-looking statements.

Stratosphere Corporation owns and operates the Stratosphere Casino, Hotel &
Tower located in Las Vegas, Nevada.

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

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