Inside Israel:

Israel had its national elections and relected Premier Menachem Begin and his Likud government by giving him 48 seats in the Knesset to 47 seats for the Labor Alignment. In order to achieve a majority of 61 seats in the 120 seat Knesset, Begin formed an alliance with the National Religious Party, Agudat Israel and Tami to acquire the necessary mandates.

The religious parties obtained a coalition agreement that the controversial “Who is a Jew” amendment to the Law of Return would be dealt with within two years. The Law of Return with the proposed amendment stirred a controversy among Reform and Conservative Jews in Israel and in the diaspora.

Settlement policies continue despite opposition of international governments and the United Nations. Ariel Sharon, the new Defense Minister, announced a new conciliatory policy toward the Arabs on the West Bank and the Gaza Strip. Terrorist attacks on Israel’s northern towns and settlements continued unabated until a cessation of hostilities was signed, with the aid of the U.S.

The Finance Minister undertook a series of economic reforms which he said would reduce triple digit inflation to double digit inflation. Israel also celebrated its 33rd anniversary.

January 1981–Finance Minister Yigael Hurwitz resigns from the Cabinet.

February–The centrist political party, the Democratic Movement for Change, founded by Deputy Premier Yigael Yadin, which surged to prominence by winning 15 seats in the 1977 Knesset elections, is dissolved by its founders.

April–Former Foreign Minister Moshe Dayan announces he will run in the Knesset elections at the head of a new party, Telem, (Movement for National Renewal).

May–Religious Affairs Minister Aharon Abu Hatzeira breaks away from the National Religious Party and announces he will head a new religious party called Tami (Movement for Israel’s Tradition.)

June–Israel, Egypt and the U.S. open another round in Jerusalem on the creation of the multinational peacekeeping force to patrol Sinai after Israel’s final withdrawal in April 1982.

July–The Central Election Committee announces official results of elections — Likud, 48 parliamentary seats, to Labor’s 47 — almost assuring Begin of another term as Premier although coalition is expected to be barely enough to last the full four years.

The 11th Maccabiah Games are played in Israel.

August–Begin signs a coalition agreement bringing the National Religious Party, Agudat Israel and Tami into the Likud bloc to form a bare majority of 61 seats in the 120-seat parliament. Begin calls for a defense treaty with the United States.

September–The Israeli Supreme Court rules that the rabbinate has no legal right to determine state policy. The ruling, which could have far-reaching effects, stems from the controversy between religious groups and archaeologists over the City of David excavation.

Israel’s population at the beginning of 5741 was 3,968,000. Of this, 3,315,000 are Jews and 653,000 non-Jews.