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A New Year Dawns for Israel, 5766 Proved to Be a Particularly Turbulent Year

The Jewish year 5766 was one of the most dramatic in Israel’s history: It saw a sitting prime minister dismantle his ruling party and then suffer a massive stroke that left him comatose; a terrorist group that refused to recognize Israel’s existence elected to the pinnacle of Palestinian power; and a war with another terrorist group in which more than 100 rockets slammed into Israeli cities and towns nearly every day for more than a month. And that’s just for starters.

Facing intense opposition within his Likud Party, Prime Minister Ariel Sharon broke away from the Likud in November 2005 to form the Kadima Party. The move significantly altered Israel’s political landscape, placing Kadima and the Labor Party at the center of the political spectrum, with parties to the left and right seemingly marginalized.

Riding a wave of popularity, Sharon seemed certain to be re-elected by a huge margin, with a mandate to continue his policy of withdrawal from Palestinian territory following the unilateral withdrawal from the Gaza Strip and northern West Bank in the summer of 2005.

But it was not to be. After an initial, small stroke in December, Sharon suffered a major stroke Jan. 4 and fell into a deep coma from which he has not emerged.

His deputy Ehud Olmert took over as acting prime minister, paving the way for his election to the premiership in late March on a promise to complete the process of separating Israel and the Palestinians by enacting a massive unilateral withdrawal from almost all of the West Bank.

There also were precedent-setting elections among the Palestinians: On Jan. 25, the fundamentalist Hamas swept to power, ousting the secular Fatah Party after almost 40 years of uninterrupted rule.

Israel refused to have any dealings with the Hamas government unless it recognized Israel’s right to exist, accepted previous Israeli-Palestinian accords and renounced violence. Most of the international community backed the Israeli position, severed diplomatic contacts and cut off aid when Hamas refused to meet the demands.

The result was violence, with the Palestinians taking advantage of the end of occupation in Gaza to launch daily rocket barrages at Israeli towns near the border. Violence escalated after Palestinian gunmen from Hamas and other factions killed two Israeli soldiers and kidnapped a third, Gilad Shalit, on June 25.

On the northern border, Hezbollah, a terrorist group financed and armed by Iran and Syria and with seats in the Lebanese government, had built up an enormous rocket capability after Israel’s unilateral withdrawal from southern Lebanon in May 2000. Shortly after Hamas’ capture of Shalit, Hezbollah opened a second front with a cross-border raid July 12 that killed eight Israeli soldiers. Two others — Ehud Goldwasser and Eldad Regev — were kidnapped and dragged back to Lebanon.

Hezbollah thought Israel’s answer would be the sort of limited, pinprick responses it had carried out after other Hezbollah attacks over the past six years, but in this case the group badly miscalculated.

Israel launched airstrikes against Hezbollah targets and Lebanese infrastructure and called up ground forces for a possible land invasion. Olmert was determined to change a situation in which Hezbollah felt it could attack Israeli soldiers with impunity, confident that Israel would not take strong retaliatory action for fear of attack from the 14,000 or so rockets that Hezbollah had trained on Israeli cities and towns.

There were other strategic considerations too: Israeli military planners saw Hezbollah as the long arm of Iran, building up its rocket power to attack Israel if the Jewish state or the United States took military action to prevent Iran from obtaining nuclear weapons. The Israeli war effort was aimed at restoring Israel’s deterrent power, removing the Hezbollah rocket threat and creating conditions for the return of the abducted soldiers.

The initial air strikes were highly successful: In just 39 minutes on the night of July 12, the Israeli air force destroyed most of Hezbollah’s Iranian-made Zilzal long-range rockets, which were believed capable of hitting Tel Aviv. Over the next few days, the air force reduced Hezbollah’s Beirut headquarters to rubble, destroyed weapon stores and killed dozens of elite Hezbollah fighters.

But it soon became apparent that incessant Hezbollah rocket fire from mobile launchers could only be stopped by a large-scale ground operation. This did not materialize until the last few days of the war –

and as a result, Hezbollah was able to continue firing more than 100 rockets a day at Israeli civilians in the North and claim victory on the grounds that Israel had been unable to stop the Katyushas.

United Nations Security Council Resolution 1701, which brought the fighting to an end Aug. 14, called for an embargo on arms to be imposed on Hezbollah, the militia to be removed from southern Lebanon and for the area to be patrolled by the Lebanese army, backed by a large U.N. force.

Increasingly beleaguered at home, Olmert presented these postwar developments as a major change in the strategic balance. Israeli leaders also argued that Hezbollah had lost between 500 and 800 fighters and taken a far more severe beating than was generally realized.

But the mood in Israel after the war was one of anger at what was widely seen as the government’s poor management of the ground war. Military analysts and ex-generals were highly critical of the failure to order an early large-scale attack, and reservists returning from the front complained of confused orders, a lack of confidence in their superiors and shortages of food, water and equipment.

Pressure mounted on Olmert to set up a state commission of inquiry with the power to subpoena witnesses, impound evidence and recommend the dismissal of political and military leaders. The prime minister responded by establishing three lesser committees to examine political, military and homefront shortcomings in the conduct of the war.

By year’s end, Olmert had acknowledged that his grand plan for a West Bank withdrawal would have to be put on a back burner, and Hamas was trying to get Palestinian terrorist factions to agree to a temporary truce and to establish a national unity government to break the international boycott.

Overall, 5766 generally was a good year for the Israeli economy, though the war in the North led to an estimated 1 percent loss in economic growth, which had been projected at more than 4 percent for the second year running.

The war also generated demands on the government’s purse strings: More than $1 billion for rehabilitation of northern Israel and an additional $5 billion for the defense budget.

At the same time, a poverty report in late August revealed that 1.6 million Israelis, or more than one-quarter of the population, was living below the poverty line. The fiscal challenge was to meet the military and social needs without creating inflationary pressure.

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