WASHINGTON, D.C. 20549


                                    FORM 8-K

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

                                DECEMBER 27, 2001
                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
----------------                --------                      ---------------
(State of Organization)    (Commission File Number)           (IRS Employer
                                                          Identification Number)

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

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

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

ITEM 5.           OTHER EVENTS.
     On December 27, 2001, the Company  entered into a transaction  with Carl C.
Icahn,  Chairman of the Board of the General  Partner and holder of in excess of
85% of the  Company's  outstanding  units,  pursuant to which the Company made a
two-year  $250,000,000 loan to Mr. Icahn,  secured by $500,000,000 of securities
consisting  of  (i)  $250,000,000   aggregate  market  value  of  the  Company's
depositary  and preferred  units owned by Mr. Icahn and (ii) shares of a private
company owned by Mr. Icahn,  which shares were  represented to have an aggregate
book  value of at least  $250,000,000,  together  with an  irrevocable  proxy on
sufficient  additional  shares of the private company so that the pledged shares
and the  shares  covered  by the proxy  equal in  excess  of 50% of the  private
company's  shares.  The loan will bear interest at a per annum rate equal to the
greater of (i) 3.9% and (ii) 200 basis points over 90 day LIBOR to be reset each
calendar quarter. The loan must be prepaid in an amount of up to $125 million to
the extent that the Company needs such funds for an investment  opportunity  and
may be prepaid at any time by Mr. Icahn.


         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.

                                    By:     American Property Investors, Inc.
                                            General Partner

                                    By:     / s /   John P. Saldarelli
                                            John P. Saldarelli
                                            Chief Financial Officer, Secretary
                                             and Treasurer

Date:    December 28, 2001