Israel - Politics, government, and taxation

Israel is a parliamentary democracy. The president, who has ceremonial function, is elected by the Knesset, a unicameral parliament, for a 5-year term. Moshe Katzav, member of the Likud party and of Persian origin, was elected president in 2000. Since the May 1996 election, the prime minister is elected directly by a separate universal vote. The minimum voting age is 18. The prime minister since 2001 is Ariel Sharon, who took over from Ehud Barak. The latter had failed to achieve an agreement with the Palestinian National Authority at Camp David and could not meet the Israeli public security expectations in the early phase of the second intifada or uprising. Apart from Ehud Barak, the 1990s saw a number of prime ministers come and go. Benyamin Netanyahu, Shimon Peres, Yitzhak Shamir, and the much-loved Yitzhak Rabin, who was assassinated in 1995 by an ultra-orthodox Jew frustrated by rapprochements with the Palestinians, have held the office in the last decade.

The State of Israel was declared on 14 May 1948, its political leadership emerging from the Jewish Agency. Its chairman, David Ben Gurion, became the first prime minister and is considered the father figure of the state. For decades the country was dominated by the Labor Party (though under changing names) first under Ben Gurion, then under other leaders, and the Histadrut, Israel's General Federation of Labor. The 2 institutions formed a quasi-socialist system with large state welfare provisions. The first change of the ruling party came as a surprise in 1977, when the Likud Party, under Menachem Begin, won the largest share of seats.

With 5 wars fought since the inception of Israel with its Arab neighbors the Israeli Defence Forces (IDF) have at any stage played an important role. Virtually all leading statesmen in Israel had senior positions in the IDF before coming to office. A permanent peace settlement seemed possible for the first time when President Sadat of Egypt visited Jerusalem in 1977 and addressed the Israeli parliament. A year later at Camp David under the guidance of President Carter, Begin and Sadat agreed on a peace treaty that was finally signed in March 1979. Until today, though, a comprehensive peace agreement with all Arab neighbors has not been struck and the problem of a Palestinian entity has not been resolved.

The Israeli Parliament, known as the Knesset, consists of 120 members elected to 4-year terms, although the prime minister has the option to call for new elections before the end of the term, or the prime minister's government can fall on a vote of no-confidence in the Knesset. A total of 11 political parties are currently represented in the 16th Knesset. The political spectrum includes the Hadash Party, a left-wing umbrella group, including the Communist Party and other Marxist factions that is made up of both Arab and Jewish citizens; the left-wing Meretz Party; the center-left and chief opposition Labor Party; the new centrist Third Way Party; the ruling right-center Likud Party; the religious parties (National Religious Party, Shas, and United Torah Judaism); and the rightist Moledet. Yisrael B'Aliya is a centrist party focused on the rights of Russian immigrants. The United Arab List, a combination of the Democratic Arab Party and representatives of Israel's Islamic Movement, is a defender of the rights of Arab citizens.

After the failed talks between Palestinians and Israelis at Camp David the ongoing second intifada began in September 2000. The Israeli-Palestinian conflict over land and the status of Jerusalem remains a crucial issue. Israel had benefitted considerably from the onset of the Middle East peace process, and its economic success depends at least to some degree on political stability. Since the 1993 signing of the Declaration of Principles on Palestinian self-rule, the future status of Jerusalem and the continuing expansion of Jewish settlements in East Jerusalem and the West Bank have emerged as 2 of the most critical issues affecting the peace process. The ongoing intifada was triggered when Ariel Sharon, as prime minister, paid a highly disputed visit to the Muslim holy site in the Old City of Jerusalem. The Old City, within the walls of which are found the ancient quarters of Jews, Christians, Muslims, and Armenians, has a population of some 25,500 Arabs and 2,600 Jews. In addition there are some 600 recent Jewish settlers in the Arab quarter. It is highly unlikely, though, that any Israeli government will give up control, gained in 1967, over East Jerusalem and the Old City, in particular.