We present a molecular dynamics simulation of 512 water molecules based on a new ab initio potential. The new potential, called the NCC potential, is an extension of the MCY potential with explicit incorporation of the many-body effects due to polarization. From the MD configurations of a 32 ps simulation with a time step of 0.5 fs, we have calculated the radial pair correlation functions, the X-ray and neutron scattering intensities, the power spectrum of translational and rotational velocity autocorrelation functions, IR spectra, evaporation energy, specific heat, self-diffusion coefficient, NMR relaxation time, sound modes, time-of-flight, and the density of states. A comparison with available experimental data reveals that the use of the NCC potential results in an accurate prediction of a wide spectrum of static and dynamic properties of liquid water.