1997 in Israel

Benjamin Netanyahu became prime minister after the May 1996 elections brought the Likud leader and his center-right coalition to power.[1] Despite his stated differences with the Oslo Accords, his administration continued their implementation.[1] A contemporary Jerusalem Center analysis characterized the government's approach as pursuing the peace process more slowly and cautiously rather than abandoning it.[2] The broader framework was established by the 1993 Declaration of Principles and the 1995 Interim Agreement, which provided for further Israeli redeployments from Palestinian-populated areas of the West Bank — known by its original, indigenous Jewish name of Judea and Samaria — alongside Palestinian Authority commitments concerning security, charter revision, and civil coordination.[3][1]

A March 1997 Jerusalem Center analysis described the peace process as strained by conflicting expectations about Oslo, disputes over redeployment, Palestinian economic frustrations, alleged non-observance of provisions in the Oslo agreements, and the continued existence of a Palestinian Charter that the analysis said should have been abolished.[2] Against this backdrop, U.S.-mediated negotiations between Netanyahu and PLO Chairman Yasser Arafat concentrated on Hebron, a city containing both a large Palestinian population and a small but symbolically significant Jewish community.[3][4]

On January 15, 1997, Israel and the Palestinian Authority signed the Protocol Concerning the Redeployment in Hebron, commonly called the Hebron Protocol.[5][6] The Knesset approved the protocol on January 16 by a vote of 87–17 with one abstention, and the Israel Defense Forces completed their redeployment in Hebron.[6] The agreement provided for the redeployment of Israeli forces from approximately 80 percent of Hebron's municipal territory after nearly thirty years of Israeli control.[4]

The protocol divided the city into two sectors: Palestinian Police Forces exercised full control in H1, while Israel maintained a military presence and broader control in approximately 20 percent of the city, designated H2.[4] H2 was estimated to contain between 30,000 and 35,000 Palestinians along with approximately 400 Jews, and it included the Ibrahimi Mosque and Cave of Machpelah.[4] The protocol required that Israeli redeployment be completed no later than ten days after signing, and Israel retained responsibility for internal security and public order in H2, as well as overall security for Israelis throughout the city.[5]

The agreement also included a U.S.-drafted note setting out mutual Israeli-Palestinian obligations for the following eighteen months and committed Israel to three further redeployments in the West Bank, while requiring the Palestinian Authority to address security, charter-revision, and civil-coordination issues.[3] Specific security arrangements included restrictions on Palestinian police firearms, wider buffer zones for Palestinian police operations, and expanded joint-security measures.[7] The agreement affirmed Israel's position that a Jewish community would remain in Hebron, while leaving the scope of future redeployments as a major unresolved point.[7]

To monitor conditions across the entire city — in both H1 and H2 — a Temporary International Presence in Hebron (TIPH) was established through negotiations between Israel and the PLO conducted from 1995 to 1997.[8] TIPH's stated purposes included creating a sense of security among Palestinians, helping restore normal life, and promoting stability and economic development; it had no military or police functions.[8]

Within weeks of the Hebron agreement, the peace process was severely strained by Israel's announcement that it would construct 6,500 Jewish homes at Har Homa in southeastern Jerusalem.[9] The government approved construction on February 26, and work began on March 18.[10] The international reaction was swift: on March 7, the United States vetoed a UN Security Council resolution calling on Israel to abandon the plans, and on March 13 the UN General Assembly adopted a resolution declaring the project illegal by a vote of 130 to 2.[9]

Israeli-Palestinian negotiations were suspended in March after the housing project began and a Palestinian terrorist bombed a Tel Aviv café.[11][10] The U.S. State Department reported that implementation talks were broken off between March and October and that final-status talks had not resumed by year's end.[11] The Har Homa dispute was therefore among the developments contributing to a prolonged freeze in Israeli-Palestinian diplomacy through most of the year.[11][10]

Hamas carried out three major suicide bombings in Israel during 1997 as part of an effort by groups opposed to the peace process to derail Israeli-Palestinian negotiations.[12] The first struck on March 21, when a satchel bomb exploded at the Apropo Café in Tel Aviv, killing three people and injuring 48, including a six-month-old child.[12] The attack coincided with the breakdown in Israeli-Palestinian talks over Har Homa and reinforced the diplomatic freeze.[10][12]

The second and deadliest attack came on July 30, when two Hamas suicide bombers attacked Jerusalem's Mahane Yehuda outdoor market.[13] The first bomber detonated a relatively small device that drove people toward an alley, where the second bomber then detonated a larger device packed with nails and screws.[13] Sixteen people were killed and 178 were wounded.[13][14] An eyewitness described finding children's shoes in puddles of blood and a mangled electric wheelchair that had become a makeshift shrine near the blast site.[13]

The third major attack followed on September 4, when three Hamas operatives entered Jerusalem's crowded Ben Yehuda pedestrian mall. A federal court complaint later alleged that their bombs were packed with nails, screws, glass, and chemical poisons and were detonated within approximately thirty seconds of one another.[15] Five people were killed in addition to the bombers, at least 181 were wounded, and Hamas was identified as responsible for the attack.[12][14]

In response to the July and September bombings, Israel imposed strict closures on the West Bank and Gaza Strip, froze political negotiations with the Palestinians, and carried out wide-scale arrests.[12][16] Netanyahu convened security chiefs and ordered them to formulate a plan against a senior Hamas target, leading to the Mossad operation against Khaled Mashaal in September.[17]

On September 25, 1997, two Mossad agents attempted to poison Hamas leader Khaled Mashaal outside his office in Amman, Jordan.[18][17] The operation was planned as a covert action because Jordan and Israel were formally at peace.[17] The attempt failed when Mashaal's security team noticed the attackers; the two agents were arrested, while four other agents took refuge in the Israeli embassy.[19]

The crisis that followed was acute. King Hussein refused to speak with Israeli emissaries, and Jordanian forces were reportedly close to storming the Israeli embassy.[18] Netanyahu later defended the decision publicly, stating: "As prime minister I have the duty, the supreme duty, to fight in every possible way against this dreadful terror."[17] The crisis was ultimately resolved after Israel supplied the antidote needed to save Mashaal's life and released Hamas spiritual leader Sheikh Ahmad Yassin along with Palestinian and Jordanian prisoners; the arrested agents were then returned to Israel.[18][12] The episode placed severe pressure on the three-year-old Israel-Jordan peace relationship and underscored the dangers of covert operations in allied territory.[18]

On the night of September 5, 1997, a Hizbullah force ambushed an Israeli Shayetet 13 naval commando unit near Ansariya in southern Lebanon. The Israeli force had landed to plant explosives intended to kill a Hizbullah operative. Eleven IDF fighters were killed in the ambush, including the unit's commander, Lt. Col. Yossi Korkin. An Israeli commission headed by Gen. Gabi Ophir concluded that the force had encountered a chance ambush and that explosives carried by some of the Israeli fighters had detonated; the commission found no evidence that Hizbullah had advance information about the operation.[20]

Several additional security incidents marked the year. On January 1, in Hebron, an off-duty Israeli soldier fired into a crowded market, wounding seven people.[12] On February 4, two Israeli Air Force helicopters collided in midair over a moshav in the Upper Galilee while carrying soldiers to IDF posts at Beaufort Castle and the Pumpkin outpost in the security zone in southern Lebanon; all 73 soldiers aboard were killed, making it Israel's most devastating air disaster. Most of the soldiers were in their late teens or early twenties.[21]

On March 4, two Israeli soldiers were killed during an attempted infiltration from Lebanon.[12] On March 13, a Jordanian soldier murdered seven Israeli schoolgirls at Naharayim; King Hussein visited the bereaved families on March 16 to offer personal condolences.[6] On November 20, an Israeli student was murdered by unknown assailants in Jerusalem's Old City.[12] Israeli border forces also stopped separate attempted infiltrations from Lebanon and Jordan throughout the year.[12]

A political scandal erupted in early 1997 when lawyer Roni Bar-On was appointed government legal adviser on January 10 and resigned just two days later under political pressure.[22] On January 22, Israeli television reported that Shas leader Aryeh Deri had threatened to withhold his party's support for the Hebron Protocol unless Netanyahu appointed Bar-On — allegedly because Deri believed Bar-On would help him obtain a plea bargain in his own corruption case.[23][22] Legal scholars protested that Bar-On was unqualified for the position.[23]

The affair, sometimes called "Bibigate," led to a judicial inquiry and became the first case in which a sitting Israeli prime minister was investigated by Israel's own police.[22] Police found tangible suspicion concerning Netanyahu and Justice Minister Tzachi Hanegbi, but prosecutors concluded that the evidence did not meet the standard required to indict senior government officials.[23] Police recommended indictments on April 15, but charges against Netanyahu and close associates were dismissed on April 20; the Supreme Court declined to prosecute Netanyahu for lack of proof on June 15.[22]

On July 14, 1997, a temporary bridge erected for delegations traveling to the opening ceremony of the 15th Maccabiah Games collapsed over the Yarkon River shortly before 8 p.m.[24] Most of the 373-member Australian delegation and several members of the 51-member Austrian delegation fell into the river.[24] Four Australians — Yetty Bennett, Gregg Small, Elizabeth Sawicki, and Warren Zines — died as a result, and 69 athletes were injured.[24] The parliamentary commission reported that injured athlete Sasha Elterman alone underwent more than 30 operations in the aftermath.[24]

The opening ceremony continued in an abbreviated form, reduced from the planned two-and-a-half hours to approximately 50 minutes, with fireworks and other celebratory elements canceled.[24] The commission cited the danger of panic among approximately 45,000 spectators, interference with rescue operations, and obstruction of hospital access routes as reasons not to end the ceremony abruptly.[24] The Australian delegation ultimately decided to remain in the Games in memory of those killed and in solidarity with the injured.[24]

Despite domestic turbulence, Israel conducted active diplomacy on multiple fronts during 1997. Netanyahu met U.S. President Bill Clinton in both February and April, and met Jordanian King Hussein in Amman in February.[6] A water agreement with Jordan was signed on May 27, and a separate agreement concerning an Irbid Industrial Zone was concluded on November 16.[6] Israel also established diplomatic relations with Croatia on August 21.[6]

On November 10, Israel and the Holy See signed the Legal Personality Agreement in Jerusalem, made pursuant to their 1993 Fundamental Agreement.[25] The agreement gave full effect under Israeli law to the legal personality of the Catholic Church and specified Catholic ecclesiastical entities, including the Latin Patriarchate of Jerusalem, Eastern Catholic patriarchates and dioceses, the Custody of the Holy Land, and other official Catholic bodies.[25]

A Jerusalem Center account reported that on December 21 Muslim activists fenced off land at the foot of the Basilica of the Annunciation in Nazareth, declared it waqf land, erected a large tent as a provisional mosque, and demanded a permanent mosque with an 86-meter minaret that would have towered over the Basilica.[26] The year also marked the centenary of the World Zionist Organization, commemorated through events and materials including a poster registered with the Central Zionist Archives.[27]

Israel's economy slowed markedly in 1997. GDP growth fell to approximately 1.9–2.1 percent, compared with 4.4 percent in 1996.[1][28] Average annual growth during 1992–1996 had been 5.4 percent.[29] The Bank of Israel described 1997 as the beginning of a period markedly different from the preceding years of rapid growth and declining unemployment.[29] The slowdown reflected fiscal and monetary restraint, the fading expansionary effects of mass immigration from the former Soviet Union, and the contraction of traditional industries during structural economic change.[28]

Macroeconomic indicators showed a mixed picture. Annual inflation fell to 7 percent — the lower boundary of the government's 7–10 percent target range — while the average monthly trade deficit shrank by approximately $200 million to $473 million.[28] The budget deficit fell to 2.8 percent of GDP from 4.1 percent in 1996, and the current-account deficit fell to $4.9 billion from $6.6 billion.[29] Unemployment rose: by the third quarter, the unemployment rate reached 8.1 percent and the number of unemployed reached 194,000.[28] New immigration declined to 60,000 people in 1997, associated with the drying up of potential immigrant sources and rising immigrant unemployment; immigrants constituted 15 percent of the labor force in the third quarter.[28]

The Netanyahu government pursued market-oriented structural reforms, including deregulation and rapid privatization.[11] During 1997 it privatized Israel's largest bank, Bank Hapoalim, and continued privatizing and deregulating the telecommunications sector.[11] The sale of 12.5 percent of Bezeq's stock to Merrill Lynch for $250 million prompted a one-day general strike on July 24 involving more than 60,000 workers, which disrupted telephone services and halted outgoing flights from Ben-Gurion International Airport.[30] Through September, the government had raised more than $2.3 billion from privatization efforts, including the Bank Hapoalim sale and offerings involving Bezeq and Israel Chemicals.[30] A September general strike lasted one day, while a December general strike over privatization lasted six days.[11]

Defense-industry exports reached $1.5 billion in 1997, a figure described as the fifth-largest national total in the world after the United States, the United Kingdom, France, and Russia.[29] The estimated value of mergers and acquisitions involving Israeli and foreign technology groups also reached $1.5 billion during the year.[29]

Tensions between secular and religious elements of Israeli society grew during 1997, with complaints from the non-Orthodox Jewish community about discrimination and intolerance receiving particular attention.[11] A private bill sponsored by Knesset members Nissim Zvilli and Moshe Gafni to prohibit solicitation for religious conversion passed its preliminary reading on May 19, 1997, by a vote of 21 to 7.[31] The proposed measure would have imposed up to one year of imprisonment for possessing, printing, copying, distributing, providing, or publishing material that could constitute solicitation for religious conversion; the bill was referred to the Knesset Law and Constitution Committee.[31]

The debate formed part of broader tensions involving religious and non-Orthodox communities. The Library of Congress report noted that Netanyahu's government opposed the private bill and assessed that it was unlikely to become law in the near future.[11][31]

The U.S. State Department reported that Israeli security forces abused Palestinians suspected of security offenses during 1997. The High Court of Justice heard 46 abuse-related cases, almost all seeking injunctions to halt alleged torture of specific individuals, but issued no injunction prohibiting the use of what the report called "moderate physical pressure." The same report recorded no political killings by government forces or political prisoners.[11]

By the end of 1997, final-status Israeli-Palestinian negotiations had not resumed following the March-to-October interruption in implementation talks.[11] The crisis with Jordan over the Mashaal operation had been contained through the antidote-and-prisoner arrangement, but it left the bilateral peace relationship under severe pressure.[18] Economically, the year marked the beginning of slower growth and rising unemployment alongside lower deficits, reduced inflationary pressure, and progress toward macroeconomic stability.[29]

Several significant disputes characterized 1997 and have continued to generate historical debate. The Hebron Protocol's division of the city, the scope of future Israeli redeployments, and the status of Hebron's Jewish community remain contested among Israeli, Palestinian, and international commentators.[3][7] The legality of the Har Homa construction project was disputed between Israel, the Palestinian Authority, the United States, and UN bodies, with the UN General Assembly declaring the project illegal while the United States vetoed the corresponding Security Council resolution.[9]

Sources differ in their casualty descriptions for the September 4 Ben Yehuda attack: the State Department reported at least five victims in addition to the three bombers, while a Jewish Virtual Library timeline listed four Israelis killed.[12][6] The Bar-On affair produced unresolved questions about the relationship between the Hebron Protocol vote and the attorney general appointment, despite the ultimate decision not to prosecute Netanyahu.[23][22]

The Mossad operation against Mashaal, the deal that secured the agents' return and freed Sheikh Ahmad Yassin, and the resulting pressure on the Israel-Jordan peace relationship remain politically and historically sensitive.[18][12] One advocacy-oriented Jerusalem Center account argued that meetings between Arafat and leaders of Hamas and other groups in March 1997 gave them a "green light" to launch terrorist attacks; this remains an attributed interpretation rather than an uncontested historical finding.[32] The Ansariya ambush is similarly contested regarding whether Hizbullah possessed advance intelligence; an Israeli commission described it as a chance encounter, though later Hizbullah accounts asserted prior knowledge.[20]