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Israel
Area: 21,000 sq. km
Population: 7m
Capital City: Israel maintains that Jerusalem is its capital city, a claim not recognised by the international community (see below)
People: Jews (76%), Muslims (16.1%), Christians (3.4%) and Druze
Languages: Hebrew, Arabic (official). English and Russian widely spoken
Religion(s): Judaism, Islam and Christianity
Currency: New Israeli Shekel (NIS)
Political parties:Kadima, Labour, Likud, Shas, Israel Beitenu, National Union-National Religious Party, Gil (pensioners), United Torah Judaism, Meretz, United Arab List, Hadash, Balad.
Government: Coalition led by Kadima with Labour and Gil
Head of State: President Moshe Katsav
Prime Minister: Ehud Olmert
Foreign Minister: Tzipi Livni
Membership of international groups/organisations: International Monetary Fund, United Nations and World Bank.
GEOGRAPHY
'Green-line' Israel (1949 armistice boundaries) covers 21,000 sq. km and is about the same size as Wales. But Israel's borders and the status of Jerusalem are still in dispute. Israel has occupied East Jerusalem, the West Bank and Gaza since 1967 (Israel withdrew from Gaza in 2005) and in 1981 it annexed all of the Golan Heights in the north. Mt Hermon, the highest peak in the annexed Golan Heights, is 2,000 metres high. By contrast, the Dead Sea is the lowest point on earth at 396 metres below sea level.
Israel is 550 km long but only 12 km wide at its narrowest point within the Green Line. Its main regions are: - Galilee, an area of partly forested rolling hills, bordered by the Sea of Galilee in the east, the Mediterranean in the west, and the Lebanese border in the north.
- Carmel, a limestone escarpment with Mediterranean scrub vegetation, running south from Haifa, parallel to the Mediterranean coast.
- Coastal Plain, a strip some 12-20 km wide along the Mediterranean with the greater part of Israel's population and industry.
- Jerusalem Hills, forested hills, with commuter towns and villages.
- Negev, a rock desert extending over 40% of Israel's land area, in the south.
- Jordan Valley, an extension of the Great Rift Valley in Africa, running along Israel's eastern border.
HISTORY
- 1948 End of British Mandate and State of Israel Proclaimed (14 May) 1948 War/War of Independence (May 1948-March 1949)
- 1949 First Knesset (parliament) elected; David Ben Gurion first Prime Minister Israel admitted to the United Nations
- 1956 Suez/Sinai Campaign
- 1967 June/Six-Day War
- 1973 Yom Kippur/October War
- 1975 Israel becomes an associate member of the Common Market
- 1977 Likud forms its first Government after almost 30 years of Labour/Mapai rule. Visit of Egyptian President Anwar Sadat to Jerusalem
- 1978 Camp David Accords, which included a framework for comprehensive peace in the Middle East and Palestinian self-government
- 1979 Israel-Egypt Peace Treaty signed by Prime Minister Menachem Begin and President Anwar Sadat
- 1982 Israel invades Lebanon
- 1985 Free Trade Agreement signed with the United States
- 1987 The First Intifada begins, lasts six years
- 1989 Start of mass immigration of Jews from the Soviet Union
- 1991 Middle East Peace Conference convened in Madrid (October)
- 1993 Oslo Accords - Declaration of Principles on Interim Self-Government Arrangements for the Palestinians signed by Israel and the PLO (September)
- 1994 Israel-Jordan Peace Treaty signed (October). Implementation of Palestinian self-government in Jericho and Gaza
- 1995 Prime Minister Yitzhak Rabin assassinated (4 November). Broadened Palestinian self-government implemented in West Bank and Gaza
- 1997 Hebron Protocol signed (January)
- 1998 Wye River Memorandum signed (October)
- 2000 Israeli withdrawal from south Lebanon (May) Camp David Talks (July) Second ('Al Aqsa') Intifada begins (28 September)
- 2001 Ariel Sharon elected Prime Minister (February). Forms a National Unity Government coalition
- 2002 National Unity Government collapses. PM Sharon calls for early elections (November)
- 2003 General Election (28 January). Likud the largest party. Sharon forms a narrow right-wing coalition with Shinui, National Union and the National Religious Party. Israeli Cabinet accepts the steps set out in the Roadmap (May). Aqaba Summit (June)
- 2004 Isralei cabinet approves the disengagement plan (June). Sharon fires the far-right National Union from the government.
- 2004 Knesset approves the disengagement plan (October). The National Religious Party resign in protest.
- 2004 Sharon fires Shinui ministers after they vote against the budget (November) Sharon's new National Unity Government with Labour approved by Knesset (10 January).
- 2005 Sharm el-Sheikh Summit (February)
- 2005 Israel releases 500 Palestinian prisoners (February) and another 400 prisoners (June)
- 2005 Disengagement plan is implemented: Israel evacuates all settlers from the Gaza Strip and from four settlements in the northern West Bank (August). The Israeli Defence Force withdraws from Gaza (September)
- 2005 Amir Peretz wins the Labour leadership (November). Labour withdraws from coalition
- 2005 Sharon resigns from Likud to form a new political party, Kadima (November)
- 2005 Sharon asks President Katsav to dissolve 16th Knesset and call new elections (November)
- 2006 Ehud Olmert becomes Acting Prime Minister, after Sharon suffers a stroke (January).
- 28 March 2006 Kadima wins 29 seats in general election (March).
- 4 May 2006 new government, headed by Prime Minister Ehud Olmert, is sworn in (May).
- 25 June 2006, Palestinian militants kill two Israeli soldiers and abduct Corporal Gilad Shalit from Kerem Shalom in southern Israel and take him into the Gaza Strip.
- 28 June Israel launches Operation Summer Rains in Gaza.
- 12 July 2006 Second Lebanon War breaks out following the Hizballah abduction of two Israeli reservists from Northern Israel to Lebanon and the killing of another eight soldiers.
- 14 August 2006 cease-fire and end of war.
- 30 October 2006 Avigdor Lieberman’s Israel Beitenu faction joins the coalition.
POLITICS AND ELECTIONS
Israel is a democratic republic. Elections to the single chamber legislature, the Knesset, are based on a system of proportional representation. The Knesset has 120 members who are elected from party lists. No Israeli political party has ever won an absolute majority in the Knesset. The law stipulates that elections should be held every four years, but they are usually called sooner.
Israel does not have a written constitution, but a series of 'Basic Laws'.
The President is the Head of State, which is mainly a ceremonial post. The current incumbent, Moshe Katsav, was elected by members of the Knesset in July 2000.
Elections to the 17th Knesset took place on 28 March 2006. Prime Minister Sharon called the elections after the Labour Party withdrew from the National Unity Government in November 2005, following Peretz’s victory in Labour leadership elections.
The Knesset has 120 members who are elected by proportional representation from party lists. The election of 28 March 2006 distributed seats among 12 parties: Kadima 29, Labour 19, Likud 12, Shas 12, Israel Beitenu 11, National Union-National Religious Party 9, Gil 7, United Torah Judaism 6, Meretz 5, United Arab List-Ta’al 4, Hadash 3, Balad 3. However, this did not amount to an overall majority and President Katsav therefore asked Prime Minister Olmert to form a coalition government. The Knesset approved Olmert's government on 4 May 2006.
ECONOMY
Basic Economic Facts
Annual Growth: 5.0% in 2006
Inflation: 0.0% in 2006
Major Industries: Electronics, telecommunications, information technology, biotech, tourism, construction, diamonds and agriculture
Major Trading Partners: USA and EU
Exchange Rate: GB£1.00 = NIS 8.288 (as at 31/12/2006)
Israel operates a market economy, exporting, for example, cut diamonds, chemicals and agricultural products. It has also developed a world-class reputation for technological research and development (R&D) (particularly in electronics, biotechnology and software). 'Israeli High Tech' is a recognised international brand in its own right.
The economy seems to have recovered from the effects of the month long war in the North and is now on an upward trend. Israel's gross domestic product (GDP) grew 5.0% in 2006, showing the continuing strength of the economy. Construction, especially in the business rental sector is on the increase, and the high tech sector continues to be the powerhouse leading economic growth. The tourist industry suffered the most due to the war in Lebanon, but Israel is aiming to attract over 2 million visitors by the end of 2007. The last three years have seen a 50% increase in the number of British tourists visiting Israel.
The 2007 budget was passed in early January, the first time for many years that the Government was able to start the New Year with agreed monthly spending. Military spending and debt repayments remain the major items of budget spending, with the Defence sector getting a large increase to cover both the costs of the war and the need to replenish military stocks. This increase came at the expense of social spending. Despite a well-managed monetary policy - with the central bank reducing interest rates at the end of the year to 4.5% - the Government again missed its inflation target of 2-3% with zero inflation for the year.
Perhaps the most important event of 2006 has been the huge amount of foreign investment in Israel. This reached \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\$23.8 billion, up 80% on 2005. Of this figure, much of this has been in the high tech sector which shows the high regard for Israeli innovation and technology.
Due to the dissolution of the Knesset and the March general elections, Israel's state budget for 2006 was only passed on 7 June. The Knesset plenum approved the budget by a vote of 53 in favour, 22 against and five abstentions. Up until then, government offices worked without an official budget and operated on the basis of the 2005 budget, being permitted to spend one-twelfth of that budget each month. The budget totals NIS 271.4 billion (the 2005 budget was NIS 264.4 billion). This year’s budget includes an increase in governmental support to health and education services.
Avraham Hirchson was appointed Finance Minister in the new government following the March 2006 elections. Hirchson previously served as Chairman of the prestigious Knesset Finance Committee and as Tourism Minister. He was among senior Likud members who left the party along with Prime Minister Ariel Sharon to set up the Kadima Party in November 2005. His most important achievement so far has been the relatively smooth approval of the NIS 302 billion 2007 budget.
GDP grew by 5% in 2006 with GDP per capita rising to \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\$19,900. The Consumer Price Index was zero for the year, led by a large drop of 0.9% in September followed by a 0.7% drop in October, the biggest ever recorded drop for both months. Over the year unemployment dropped to 8.6%.
However strong the underlying economy, ultimately the long-term outlook remains heavily dependent on developments in the conflict with the Palestinians and on political and security developments in the region.
INTERNATIONAL RELATIONS
Israel has diplomatic relations with 163 countries. It has over 100 diplomatic missions. In the Middle East, Israel has diplomatic relations with Jordan and Egypt. The governments of Tunisia, Morocco and Oman suspended diplomatic relations at the start of the Second Intifada. Israel has a business office in Qatar.
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