SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549

-----------------------

FORM 8-K

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

AUGUST 16, 1996
---------------
Date of Report (Date of earliest event reported)

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

ITEM 5. OTHER EVENTS.

On  August  16,  1996,  the  Registrant announced that High Coast Limited
Partnership ("High Coast"), which beneficially  owns approximately 50.6% of the
Depositary Units of American Real Estate Partners, L.P. ("AREP"), has consented
to  an  amendment to AREP's partnership agreement.   The  previously  announced
amendment will permit AREP to invest in securities issued by companies that are
not necessarily  engaged  as  one of their primary activities in the ownership,
development or management of real  estate.   Reference  is  made  to  the press
release, dated August 16, 1996, annexed hereto as Exhibit 20.1, for information
regarding the announcement.

ITEM 7. EXHIBITS.

EXHIBIT NO.             DESCRIPTION OF DOCUMENT
-----------             -----------------------

10.1                Amendment  No.  2  to  the  Amended  and Restated
Agreement of Limited Partnership of AREP dated as
of August 16, 1996.

10.2                Amendment  No.  1  to  the  Amended  and Restated
Agreement of Limited Partnership of American Real
Estate Holdings Limited Partnership dated  as  of
August 16, 1996.

20.1                Press Release, dated August 16, 1996.

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
---------------------
John P. Saldarelli
Secretary and Treasurer

Date:  August 16, 1996

EXHIBIT INDEX
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EXHIBIT NO.             DESCRIPTION OF DOCUMENT                                            PAGE NO.
- -----------             -----------------------                                            --------

10.1                 Amendment No. 2 to the Amended and Restated Agreement of Limited        5
Partnership of AREP dated as of August 16, 1996.
10.2                 Amendment No. 1 to the Amended and Restated Agreement of Limited        7
Partnership of American Real Estate Holdings Limited Partnership
dated as of August 16, 1996.
20.1                 Press Release, dated August 16, 1996.                                   9

AMENDMENT NO. 2

TO

AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

OF

AMERICAN REAL ESTATE PARTNERS, L.P.
(A DELAWARE LIMITED PARTNERSHIP)

AMENDMENT NO. 2 ("Amendment No. 2") to the Amended and Restated Agreement
of  Limited Partnership (the "Partnership Agreement") of American  Real  Estate
Partners,  L.P.  (the "Partnership"), dated as of August 16, 1996, by and among
American Property  Investors,  Inc., a Delaware corporation, as general partner
(the "General Partner"), and all other persons and entities who are or shall in
the future become limited partners (the "Limited Partners") of the Partnership.
Except as otherwise indicated, all  capitalized  terms  used  herein  have  the
meaning ascribed to such terms in the Partnership Agreement.

WITNESSETH:
----------

WHEREAS, the Partnership desires to amend its business purposes to permit
it to invest in securities not necessarily related to real estate; and

WHEREAS,  the  Partnership has obtained the written consent of High Coast
Limited Partnership, as  beneficial  holder of more than 50% of the outstanding
depositary units representing limited partner interests in the Partnership (the
"Depositary Units").

NOW, THEREFORE, the parties hereby agree as follows:

1.    Section 3.01 of the Partnership  Agreement  is  hereby  amended and
restated in its entirety to read as follows:

"3.01.  Purposes and Business.

The  purposes  of  the  Partnership  shall  be  (a) to directly  or
indirectly invest in, acquire, own, hold, manage, operate, sell, exchange
and  otherwise  dispose  of  interests in real estate (including  without
limitation, a limited partner  interest in the Operating Partnership) and
securities of any type and description  now  or  hereafter  in existence,
whether or not related to interests in real estate, and (b) to enter into
any  lawful  transaction  and engage in any lawful activities related  or
incidental  thereto  or  in  furtherance   of   the   foregoing  purposes
(including, without limitation, any transaction or activity  outside  the
normal   scope   of   the  Partnership's  business),  provided  that  the
Partnership will conduct  its  activities  so  as not to be considered an
investment company under the Investment Company Act of 1940, as amended."

2.    Except  as expressly amended hereby, all other  provisions  of  the
Partnership Agreement shall continue in full force and effect.

3.    This Amendment  No.  2 shall become effective as of the date hereof
upon its execution by all parties hereto.

IN WITNESS WHEREOF, the undersigned  have  evidenced  their  adoption and
ratification  of the foregoing Amendment No. 2 to the Partnership Agreement  of
the Partnership  and  have  duly  executed this Amendment No. 2, or have caused
this Amendment No. 2 to be duly executed  on  their  behalf,  as of the day and
year first hereinabove set forth.

General Partner:

AMERICAN PROPERTY INVESTORS, INC.

By:   /S/ JOHN P. SALDARELLI
----------------------
Title: Vice President

Limited Partners:

By:   American Property Investors, Inc.
(attorney-in-fact)

By:   /S/ JOHN P. SALDARELLI
-----------------------
Title:   Vice President

AMENDMENT NO. 1

TO

AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

OF

AMERICAN REAL ESTATE HOLDINGS LIMITED PARTNERSHIP
(A DELAWARE LIMITED PARTNERSHIP)

AMENDMENT NO. 1 ("Amendment No. 1") to the Amended and Restated Agreement
of  Limited Partnership (the "Partnership Agreement") of American  Real  Estate
Holdings  Limited Partnership (the "Partnership"), dated as of August 16, 1996,
by and among  American  Property  Investors,  Inc.,  a Delaware corporation, as
general partner (the "General Partner"), American Real  Estate  Partners, L.P.,
as limited partner ("AREP") and all other persons and entities who are or shall
in  the  future  become  limited  partners  (the  "Limited  Partners")  of  the
Partnership.   Except as otherwise indicated, all capitalized terms used herein
have the meaning ascribed to such terms in the Partnership Agreement.

WITNESSETH:
----------

WHEREAS, the Partnership desires to amend its business purposes to permit
it to invest in securities not necessarily related to real estate; and

WHEREAS,  AREP   has  obtained  the  written  consent  to  the  amendment
hereinbelow of High Coast  Limited  Partnership,  as  beneficial holder of more
than  50%  of  the  outstanding depositary units representing  limited  partner
interests in AREP (the  "Depositary  Units"),  owner  of  a 99% limited partner
interest in the Partnership; and

WHEREAS, AREP has consented to the amendment hereinbelow.

NOW, THEREFORE, the parties hereby agree as follows:

1.    Section  3.01  of the Partnership Agreement is hereby  amended  and
restated in its entirety to read as follows:

"3.01.  Purposes and Business.

The purposes of  the  Partnership  shall  be  (a)  to  directly  or
indirectly invest in, acquire, own, hold, manage, operate, sell, exchange
and  otherwise  dispose of interests in real estate and securities of any
type and description  now  or  hereafter  in  existence,  whether  or not
related  to interests  in real estate, and (b)  to enter into  any lawful 
transaction  and engage  in any lawful  activities related or  incidental 
thereto or in furtherance of the  foregoing purposes  (including, without 
limitation, any transaction or activity outside the normal  scope  of the
Partnership's business), provided  that the Partnership  will conduct its 
activities  so as not  to be considered  an investment  company under the 
Investment Company Act of 1940, as amended."

2.    Except  as  expressly  amended hereby, all other provisions of  the
Partnership Agreement shall continue in full force and effect.

3.    This Amendment No. 1 shall  become  effective as of the date hereof
upon its execution by all parties hereto.

IN  WITNESS WHEREOF, the undersigned have evidenced  their  adoption  and
ratification  of  the foregoing Amendment No. 1 to the Partnership Agreement of
the Partnership and  have  duly  executed  this Amendment No. 1, or have caused
this Amendment No. 1 to be duly executed on  their  behalf,  as  of the day and
year first hereinabove set forth.

General Partner:

AMERICAN PROPERTY INVESTORS, INC.

By:   /S/ JOHN P. SALDARELLI
-----------------------
Title:   Vice President

Limited Partner:

AMERICAN REAL ESTATE PARTNERS, L.P.

By:   American Property Investors, Inc.,
General Partner

By:   /S/ JOHN P. SALDARELLI
----------------------
Title:   Vice President

[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. ANNOUNCES THAT ITS MAJORITY UNITHOLDER  HAS
- -------------------------------------------------------------------------------
CONSENTED  TO THE AMENDMENT TO ITS PARTNERSHIP AGREEMENT TO PERMIT AREP TO MAKE
- -------------------------------------------------------------------------------
NON-REAL ESTATE INVESTMENTS.
- ----------------------------

MT. KISCO, NEW  YORK  -- August 16, 1996 -- American Real Estate Partners, L.P.
(NYSE:ACP) ("AREP") today  announced  that  High  Coast  Limited Partnership, a
Delaware limited partnership ("High Coast") controlled by  Mr.  Carl  C. Icahn,
the Chairman of the Board of the General Partner of AREP, has consented  to  an
amendment  to  AREP's  partnership  agreement  to  permit AREP to make non-real
estate investments.  High Coast beneficially owns approximately 50.6% of AREP's
depositary units representing limited partner interests.

As previously announced, the amendment will permit AREP to invest in securities
issued by companies that are not necessarily engaged  as  one  of their primary
activities  in the ownership, development or management of real estate  and  to
further diversify its portfolio, while remaining in the real estate business.

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