Israel is a country that combines an ancient region of the world with a modern, technically advanced society. The history of the Jewish people and their allies and enemies is a saga that encompasses several millennia, and continues to this day to be a story of upheaval.

Visiting the two main cities of Israel, Tel Aviv and Jerusalem, you can experience the melding of those historical and contemporary elements. Tel Aviv is Israel's financial, commercial, and cultural center, a thriving coastal town with the raffish air of a Mediterranean resort. In contrast to secular Tel Aviv, the capital, Jerusalem - with its shrines sacred to Judaism, Islam, and Christianity - retains a more religious atmosphere. Archaeological digs under Jerusalem's Old City have revealed homes from Roman times, which visitors can explore.

The West Bank and Gaza Strip are part of region with its own defining characteristics and complex politics.

Israel is a parliamentary democracy without a formal written constitution. The titular head of state is the president, who is elected by a parliament - called the Knesset - to serve a seven-year term. The president cannot be re-elected to a second term.

The government is administered by a cabinet, selected by the prime minister and approved by the Knesset. Legislative power is held by the Knesset, whose 120 members are elected to four-year terms. Elections may be called earlier if the Knesset passes a bill to dissolve the legislature. The legal system is basically based on British law.

Since achieving independence in 1948, Israel has had to fend off attacks by the surrounding Arab states. In the Six-Day War of 1967, Israel captured the Palestinian part of Jerusalem, the West Bank area of Jordan, Sinai, the Gaza Strip, and the Golan Heights in Syria.

Since 1978, various treaties have laid the foundation for a peace agreement. In an agreement in Oslo Norway in 1994, Israel ceded most governmental functions in the West Bank and Gaza Strip to a new Palestinian Authority and signed a landmark peace treaty with Jordan.

In 2000, U.S. President Bill Clinton met with then Israeli Prime Minister Ehud Barak and Palestinian leader Yassir Arafat at the presidential retreat at Camp David in Maryland, in an attempt to resolve the remaining issues between them. While some progress was made, no agreement was reached.

Barak's successor in 2001, Likud Party leader Ariel Sharon, known as a hard-liner when negotiating with the Palestinians, stipulated that peace talks would not resume until the violence ended. Due to a massive stroke, Sharon became incapacitated and the Deputy Prime Minister, Ehud Olmert, was confirmed Acting Prime Minister until the next election, which he won on March 28, 2006.

The death of Yassir Arafat in November 2004 was a turning point and Mahmoud Abbas was chosen as his successor in January 2005. In February 2005 the Israeli Government voted to dismantle all Israeli settlements in the Gaza Strip. The process of removing all settlers was completed in September 2005. However, the Israeli Government still controls maritime and air space around the area, and the future status of the Gaza Strip is uncertain. Violence continues in this area, and the Israeli military continues to retaliate, making a permanent agreement unlikely in the near future.

On a more positive note, after a period of stagnation, Israel's economy has experienced a remarkable expansion, attributed in part to an economic stabilization program, which fostered reform and liberalization of the economy. It has become highly diversified, driven by its principles of free enterprise and industrial growth.

The Israeli government places a high priority on encouraging foreign investment and has initiated some efforts at privatization. Scarcity of water, reduction in available land for cultivation due to expanding Israeli housing construction, and dependence on the importation of oil, are major economic considerations.

With few natural resources, Israel relies on its human capital. The country's businesses benefit from a highly motivated and skilled work force in which 25 percent of the workers hold advanced degrees. The work force has been augmented by more than a million immigrants from the countries of the former Soviet Union. These highly educated workers often have skills in new hi-tech processes. Significant government investment has enabled these immigrants to use their skills to develop modern industries.

The West Bank and Gaza
Of the approximately nine million Palestinian Arabs in the world, approximately 3.7 million live in two areas – the West Bank and Gaza. The West Bank is situated west of the Jordan River between the State of Israel and Jordan. It is approximately 5,860 sq km/2,263 sq mi. Gaza is south of the West Bank and adjacent to the Sinai Peninsula. It is approximately 270 sq km/104 sq mi, and borders the Mediterranean Sea.

There are few natural resources in either area. The infrastructure in both regions is inadequate, including electricity, sewers, roads and water systems, as well as hospital and medical care. Travel between the two areas is restricted to a singular route through the Israeli territory.

History of the West Bank and Gaza region
With the 1994 Oslo agreement, governmental functions in the West Bank and Gaza were given to a new Palestinian Authority - ending 27 years of occupation by Israel and providing self-rule to the Palestinians.

Terrorist attacks by those that would prefer total destruction of the Israeli state, retaliatory measures, and a lack (until recently) of Israeli withdrawal from settlements, have created distrust in the region, making a peaceful transition difficult.

An elected president - currently Mahmoud Abbas of the Fatma party - and an 18-member Council of Ministers, along with a legislature, called the Palestinian Legislative Council (PLC), govern the West Bank and Gaza. In January 2006 elections for PLC seats, Hamas beat the ruling Fatah faction by a landslide. During 2007, the Hamas took full control of Gaza. The PLS responded by taking control of the government in the West Bank.

While this Palestinian Authority oversees domestic affairs, Israel is responsible for security and borders. Palestinians must carry identification cards issued by the Israeli government.

Political relations with Israel has had a direct impact on the economy and the well being of the inhabitants of the West Bank and Gaza. With frequent closures brought on by security issues, many Palestinians that work in Israel cannot get to their jobs.

This has severely affected the standard of living, causing unemployment and inflation to rise. There is a skilled work force capable of building a solid economy, but substantial foreign investment would be needed to achieve this goal and the improved standard of living that would accompany it.


Official Name: State of Israel
Capital City: Jerusalem; most foreign embassies are located in Tel Aviv.
Type of Government: Parliamentary democracy
Official Languages: Hebrew, Arabic, English most common foreign language
Area: 20,772 sq. km/ 8,020 sq. mi
Population: 7.5 million
Religion: Judaism, 80%; Islam, 16%; Christianity, 2%; Druze and other, 2%
Currency: New Israeli Shekel (NIS)
Number of Time Zones: 1
EST + 7hrs., GMT + 2 hrs. Israeli summertime is in effect from the Friday before the last Sunday in March to the first Sunday after October 1.
Weights and Measures: Metric system
Country Domain: .il
Country Tel Code: 972