|Photo Credit: see below|
The web page tells (in Hebrew) the story of Isaac and Israel Rot and their cousin Aryeh Klein, holocaust survivors who were caught as illegal emigrants to Palestine by the British in 1946, and sent to a Cyprus holding camp until 1948.
They were bored, and a 'chess master' who was another inmate offered to teach them the game if they will get him a set. They started by carving stones from an abandoned cemetery, but then hit upon the idea for "industrial production". They made the lathe from a pair of skates (!) bought from one of the other inmates, and started producing chess sets and selling them to British soldiers as souvenirs.
The web page is in Hebrew, but has many photos of the three at work. Israel made the pieces on the lathe, Aryeh carved their features, and Isaac made the boxes. The identity of the chess master is not given