Israel at 58 on 58th Independence Day, Israel Still Faces Many of Its Initial Dilemmas

In its 58 years, Israel has turned itself into an undisputed regional military and economic superpower. But as it celebrates its birthday this week, it faces some of the same problems it did at its inception: a lack of universal recognition, ongoing terrorism and the threat of physical destruction. There’s no comparison between the Israel of today and the tiny, struggling Jewish community at the state’s founding in 1948, but six wars and two intifadas later, the Jewish state still has not achieved the normalcy its founding fathers envisaged.

That leaves Prime Minister Ehud Olmert’s new government, one of the least experienced in Israel’s history, confronting major regional, global and existential issues.

Some facts and figures give a sense of how far Israel has come over the past 58 years. In 1948, the Jewish population of Israel was around 650,000; today it is some 6 million, with more Jews living in Israel than in the United States.

At the start of the War of Independence in 1948, there were roughly 29,000 Israelis under arms, and another 20,000 in reserve; the Israel Defense Forces today number close to 700,000.

In May 1948, the Israelis had no tanks, few armored vehicles and just four Messerschmitt planes. Today, Israel has one of the largest tank forces in the Middle East and hundreds of state-of-the-art fighter-bombers, some capable of flying missions as far afield as Iran without refueling.

On the economic front, annual exports from Israel in 1950 totaled $18 million; today Israel exports around $2.5 billion — a month. According to figures published in 2000, Israel was second only to California’s Silicon Valley in high-tech; third in the number of university graduates per capita behind the United States and Holland; and first in the number of scientists per capita, with 135 per 10,000 inhabitants, compared to just 85 per 10,000 in the United States.

Israel also has made tremendous diplomatic strides. In its early days, Israel suffered from American indifference, Soviet hostility and a trade boycott imposed by the Arab world, which some experts say cost Israel as much as $40 billion.

Until 1967, the United States kept its distance and refused to supply “offensive” weapons, while the Soviet Union armed Israel’s Arab enemies to the teeth and used them as proxies in the Cold War.

It was only after Israel’s stunning victory in the 1967 Six-Day War that it was able to forge the close strategic relationship with the United States that has become the cornerstone of Israeli foreign policy.

The big change in Israel’s global standing came in the 1990s, after the collapse of the Soviet Union and the launching of a peace process with the Palestinians. Russia and other key international players, including China, India and Turkey, established diplomatic ties with Israel, and the Arab boycott dissipated as major firms from all over the world started doing business with Israel.

By that time, Israel’s geo-strategic position had changed radically. In 1979, it concluded a peace deal with Egypt and made peace with Jordan in 1994. In the late 1980s, Soviet arms supplies to Syria began to dry up, and the two U.S.-led Persian Gulf Wars against Saddam Hussein’s Iraq, in 1991 and 2003, broke the brunt of the “Eastern Front” against Israel.

Nevertheless, Israel still faces three major and potentially existential threats: nuclear weapons in the hands of an Iranian regime that threatens to “wipe Israel off the map”; global and Palestinian terrorism; and demands for a one-state solution to the Israeli-Palestinian conflict, in which the Jewish state would be dismantled and Jews would become a minority in an Arab-ruled country.

These are the issues that will dictate the Olmert government’s strategic agenda. First, it will work with the international community to prevent Iran from producing nuclear weapons. Mossad Chief Meir Dagan recently visited Washington to exchange intelligence on the Iranian nuclear program and to coordinate plans to prevent Iran from weaponizing its nuclear technology.

The Olmert government’s fight against terrorism will be two-pronged: an all-out war against the terrorists, coupled with further withdrawal from the West Bank. The withdrawal is designed to gain the moral high ground for Israel and to pre-empt calls for a one-state solution by creating space for a Palestinian state, with Israel on one side of the soon-to-be-completed West Bank security barrier and Palestinians on the other.

Fifty-eight years after the founding of the state, the new government will have to address its predecessors’ unfinished business: setting internationally recognized borders; making peace with the Palestinians or at least managing the conflict better; getting international recognition for Jerusalem as Israel’s capital; completing work on a constitution; and changing the electoral system to facilitate more stable government, considering that Israel has had 31 governments in just 58 years.

Can Olmert’s new government, made up of his Kadima party, Labor, the Pensioners and Shas, handle the challenges? On the face of it, its most glaring weakness is the relative inexperience of its members. All the senior ministers — Tzipi Livni at the Foreign Ministry, Amir Peretz at Defense, Avraham Hirschson in the Treasury and Olmert as prime minister — are new to their jobs.

Will this government be able to strike the right economic balance between free-market-induced growth and government subsidies for the weak and needy? Will the fervently Orthodox Shas bolt, possibly precipitating new elections, when a major unilateral withdrawal from the West Bank begins to take shape?

Will Shas allow work on a constitution — assiduously carried out for the past three years in the Knesset’s Constitution, Law and Justice Committee — to go ahead? Will a commission set up by President Moshe Katsav be able to convince this government to underwrite an electoral reform that introduces a form of regional constituency elections that smaller, one-issue parties — such as Shas and the Pensioners — fear might destroy them?

And will Olmert have the same rapport with the U.S. administration, and especially President Bush, as did his predecessor, Ariel Sharon? Will he be able to get the Americans not only to back another Israeli pullback, but to recognize the lines Israel decides to draw as its permanent, international border?

Olmert hopes that by 2010, when his term is due to end, he will have succeeded where all of the 11 prime ministers that preceded him  from David Ben-Gurion to Sharon — failed: In setting Israel’s permanent borders and gaining near-universal recognition for the Jewish state, with its capital in Jerusalem.