2008 in Israel

Israel's government entered 2008 in a weakened condition. The Olmert coalition had begun in May 2006 with 78 Knesset members, but Yisrael Beiteinu and its leader Avigdor Lieberman departed in January 2008, reducing the coalition to 67 seats.[9] The Israel Democracy Institute's democracy index noted that public trust in political institutions was strikingly low that year: 15 percent of those surveyed trusted political parties, 17 percent trusted the prime minister, and 29 percent trusted the Knesset.[9]

The central political event of the year was the unraveling of Olmert's premiership. Six criminal investigations were underway during 2008, covering alleged fraud, bribery, breach of trust, money laundering, and tax offenses; one investigation was closed for lack of evidence on December 4.[1] In late May, fundraiser Morris Talansky testified that he had given Olmert approximately $150,000 in cash payments over a fifteen-year period before Olmert became prime minister, though the circumstances were disputed.[10] On July 30, Olmert announced that he would leave the Kadima leadership and the premiership after the party's leadership primary.[11] Police said on September 8 that they had assembled evidence supporting charges in several cases, including bribery, and Olmert submitted his resignation to President Shimon Peres on September 21.[11]

Kadima held its leadership primary on September 17, and Tzipi Livni won the vote to succeed Olmert as party chair.[1] President Peres asked her to form a government, but coalition parties reopened negotiations and made new demands, and Livni was unable to assemble a governing majority.[2] On October 27, Peres informed the Knesset speaker that coalition efforts had failed.[12] Olmert announced he would remain caretaker prime minister until an election and the formation of a new government.[12] The Knesset set elections for February 10, 2009, and the Israel Democracy Institute recorded that the Olmert government had completed 64.9 percent of its designated term.[9]

The year was marked by a series of deadly terrorist attacks within Israel's cities. On February 4, a suicide bomber struck a shopping center in Dimona, killing Lyubov Razdolskaya, aged 73, and wounding 38 others; police stopped a second bomber at the scene.[13]

The most lethal single attack of the year occurred on March 6, when a gunman entered Jerusalem's Mercaz Harav yeshiva at approximately 8:30 p.m. and opened fire with an automatic weapon, killing eight students and wounding ten. A celebration for the start of the Hebrew month was underway, dozens of people were present, and the attacker acted alone before being shot by people at the scene.[14] The report described the attacker as an East Jerusalem resident who carried an Israeli identity card.[14]

July brought two separate tractor and bulldozer attacks in Jerusalem. On July 2, an attacker drove a construction vehicle into people and other vehicles on central city streets, killing three people and wounding more than 50; security forces shot the attacker.[13] On July 22, a second tractor attack wounded 28 people before a Border Policeman shot the perpetrator.[15] The State Department's terrorism report noted that police could not determine a clear motive for the July 2 attack, though the Israeli government defined it as terrorism.[3]

According to the Shin Bet's year-end assessment, 36 people were killed in Palestinian attacks during 2008 as of December 29, compared with 13 in 2007. Fourteen of the 2008 deaths occurred in attacks in Jerusalem, including eight at Mercaz Harav, three in vehicle-ramming attacks, two security personnel in shooting incidents, and one civilian in a stabbing. The Shin Bet cautioned that its figures were not final while fighting continued at year's end.[16]

Rocket and mortar fire from Gaza reached a peak intensity in 2008, bringing nearly one million residents of southern Israel—approximately 15 percent of the population—within range at varying levels of intensity.[17] The exact annual totals differ across sources. An Israeli government summary reports 3,278 projectiles landing in Israel, comprising 1,750 rockets and 1,528 mortar shells, though its monthly charts total 1,665 rockets and 1,497 mortar shells.[17] The State Department's terrorism report similarly gives approximately 1,750 rockets and 1,528 mortars, compared with 896 rockets and 749 mortars in 2007, while its human-rights report cites 1,571 rockets and 1,531 mortars.[1][3] The Shin Bet's year-end account recorded more than 2,000 rockets during 2008 but noted that its figures were provisional because fighting was continuing.[16]

Egypt mediated an unwritten ceasefire arrangement that Israel and Hamas accepted on June 17 and that took effect at 6:00 a.m. on June 19.[18][19] Its terms called for a cessation of Gaza-Israel violence, staged easing of restrictions at cargo crossings, and later discussions concerning the Rafah crossing and an exchange for captured Israeli soldier Gilad Shalit. Israel's formal position was that its understanding was with Egypt rather than directly with Hamas.[18]

The first phase of the lull was relatively quiet but not free of attacks. From June 19 through November 4, an annual rocket-fire summary recorded 20 rockets and 18 mortar shells, including some that landed inside Gaza.[17] The arrangement then deteriorated sharply: the same summary recorded 203 rockets and 121 mortar shells between November 4 and December 19.[17]

The six-month arrangement expired on December 19 after the parties failed to agree on an extension, and Hamas announced its end.[4][19] The State Department's terrorism report estimated that 213 rockets and 126 mortars were fired from November 4 through December 18 and recorded 361 rockets launched at Israel during December alone.[3]

Israel launched Operation Cast Lead on December 27, 2008, following the collapse of the lull and a sharp increase in rocket attacks. On December 24, an Israeli airstrike targeted terrorists who had fired mortars at Israel; Hamas responded with rockets and mortars on December 24 and 25, and Olmert publicly warned Hamas to stop.[20] The operation began at 11:30 a.m., when an initial wave of Israeli Air Force strikes hit approximately 100 targets within 220 seconds, followed about 30 minutes later by a second wave against 60 additional targets.[20] Some 80 aircraft participated and more than 100 bombs were dropped on dozens of targets.[21] Listed targets included Hamas headquarters and government offices, 24 police stations, training bases, rocket launchers, missile stockpiles, and tunnels.[20]

Defense Minister Ehud Barak described the objectives as dealing Hamas a forceful blow, fundamentally changing the situation in Gaza, and stopping rocket attacks on Israeli citizens.[21] The Anti-Defamation League describes the operation as a response to years of rocket attacks by Hamas and other Gaza-based terrorist organizations, with Israeli forces targeting Hamas operational centers, weapons storage, workshops, production facilities, smuggling tunnels, rocket-launching sites, and armed personnel.[22]

An INSS assessment noted that the government decided to launch the operation six weeks before the Knesset election and reported that a survey conducted the day after the campaign began found 81 percent of the Israeli public supported it and 12 percent opposed it.[2] Israeli political parties announced that they were freezing their election campaigns, and the government activated the Emergency Management Agency and extended the "special situation" on the home front on December 28.[9] Thousands demonstrated against the operation in Arab localities.[9]

Israel announced a unilateral ceasefire, and all Israeli troops had withdrawn from Gaza by January 21, 2009; sources differ slightly on whether the ceasefire took effect on January 17 or 18.[22][20] Palestinian casualty figures are contested. An Israeli government report, citing IDF Military Intelligence, gives 1,166 fatalities, including 709 people classified as terrorist operatives, 295 described as apparently not involved in hostilities, and 162 whose involvement could not be established.[23] B'Tselem counted 1,387 Palestinians killed, while the Palestinian Center for Human Rights reported 1,434.[24] Thirteen Israelis were killed—ten soldiers, including four by friendly fire, and three civilians killed by rockets.[20] By December 31, the State Department's human-rights report had recorded at least 315 Palestinian deaths, as the operation was still underway at year's end.[1]

Following the November 2007 Annapolis conference, Prime Minister Olmert, Palestinian Authority President Mahmoud Abbas, and other members of their governments held regular bilateral negotiations on final-status issues during 2008, aiming for an agreement by year's end.[25] Negotiating committees addressed borders, settlements, refugees, Jerusalem, water, and security.[5]

The parties reportedly narrowed their differences on some issues. Olmert stated that Israel would need to relinquish nearly all of the West Bank—known by its original, indigenous Jewish name of Judea and Samaria—and accept a division of Jerusalem.[5] Abbas rejected the reported proposed land swap on the grounds that it would produce discontinuous Palestinian areas and deprive Palestinians of control over water resources.[5] A later Jewish Review of Books analysis identified refugees, settlements, Jerusalem, and security as unresolved issues and described Israeli negotiating requirements as including a demilitarized Palestinian state and an Israeli military presence in the Jordan Valley.[26] The negotiations were suspended in December when conflict broke out between Israel and Hamas in Gaza.[27][25] Olmert later said he had met Abbas 36 or 37 times without reaching an agreement.[26]

Israel and Syria announced renewed indirect peace negotiations on May 21, 2008, with Turkey serving as mediator and negotiating teams meeting in Istanbul.[5] An INSS account says that in April Olmert sent Syrian President Bashar al-Assad a message through Turkish Prime Minister Recep Tayyip Erdoğan expressing conditional willingness to fulfill the "Rabin deposit"—a full Israeli withdrawal to the June 4, 1967 lines.[28] The talks focused on the conditions and possible arrangements for resuming direct negotiations, with the Golan Heights central to discussions of withdrawal, security, water, and peaceful relations.[5]

Four rounds of indirect talks were held in 2008.[6] Olmert's July 30 announcement that he would not seek to remain prime minister effectively ended the active phase of the contacts, and the process was suspended following his resignation in September.[28][6] Political developments in Israel and the Gaza conflict were both identified as factors that disrupted the process.[5]

On July 16, 2008, Israel and Hezbollah completed a prisoner exchange nearly two years after the 2006 war, with German intelligence serving as broker.[8] Israel received the remains of reservists Ehud Goldwasser and Eldad Regev, who had been captured at the outset of the 2006 conflict; in return, Israel released five Lebanese prisoners, including Samir Kuntar, and returned the remains of approximately 200 Lebanese and Palestinian fighters.[8][29] The exchange also included information about missing Israeli airman Ron Arad; the account states that the material contained no new details and that Hezbollah said it did not know what had happened to him.[30]

The Israeli government had approved the exchange agreement on June 29.[9] The exchange itself occurred on July 16, as recorded by the Congressional Research Service.[8] It was praised and criticized inside Israel and was widely characterized as a political victory for Hezbollah.[10]

Israel marked the 60th anniversary of its establishment in 2008, an occasion that drew international attention and domestic cultural expression. In a Knesset address on May 15, U.S. President George W. Bush recalled that David Ben-Gurion had proclaimed Israel's independence in Tel Aviv 60 years earlier. Bush noted that the United States had been the first nation to recognize Israeli independence—eleven minutes after the proclamation, on President Harry Truman's orders—and described the United States as Israel's "closest ally and best friend in the world."[7] Bush visited Israel twice during the year, and Secretary of State Condoleezza Rice made repeated trips to monitor the Annapolis negotiating process.[10]

The anniversary also prompted cultural projects, including Rabbi Jonathan Sacks's "Israel: Home of Hope," released on May 14, 2008. The Rabbi Sacks Legacy describes it as a project created to mark the anniversary and tell the story of the modern State of Israel through words and music.[31]

Not all commemorations were celebratory. On May 15, approximately 15,000 Arab Israelis and other activists marched to the site of the former Arab village of Safouriya in a demonstration marking the anniversary. The procession ended in clashes with security forces; police said they used appropriate force after stones were thrown, while demonstrators alleged that police attacked first. An investigation continued at year's end.[1]

Several significant religious and domestic legal developments occurred in 2008. On January 14, Israel re-established its Ministry of Religious Affairs, after several years in which its functions had been absorbed into the Prime Minister's Office.[32] In May, the first state-funded Reform and Conservative synagogues opened in Modi'in, following a 2003 High Court ruling that state funding could be used for non-Orthodox synagogue construction.[32]

On April 16, the High Court ruled that the government could not deny Law of Return immigration status solely because an otherwise eligible applicant identified as a Messianic Jew, provided the person was not also considered Jewish under Orthodox criteria.[32] In May, a woman whose conversion had been formally recognized had her conversion briefly annulled by the High Rabbinical Court, which reversed its decision after public outcry.[32]

On May 15, residents of Or Yehuda publicly burned hundreds of Christian Bibles that had been distributed by missionaries. The event was reportedly organized by deputy mayor Uzi Aharon, who later stated that the action was necessary to "purge the evil among us." The Chief Rabbinate and Christian and Muslim leaders condemned the incident on May 27, and Israel's Foreign Ministry condemned it on May 29 as contrary to the values of a democratic Jewish state that grants freedom of religion and worship.[32]

On June 25, the Knesset enacted the Dromi Law, exempting from criminal liability a person who uses force against a burglar entering a home, business, or farm.[9] On July 23, the Knesset passed legislation permitting continued state funding of approximately 60 percent of Haredi schools' expenses even when those schools did not implement the government's core curriculum.[32]

On September 25, Israel Prize laureate Professor Zeev Sternhell was injured by an explosive device placed at his home.[9] Disturbances between Jewish and Arab residents occurred in Acre on December 9.[9]

Israel's economy in 2008 was shaped by two distinct phases: a continuation of five years of strong growth through mid-year, followed by the effects of the global financial crisis. Preliminary Central Bureau of Statistics estimates put GDP growth at approximately 4.1 percent, down from 5.4 percent in 2007, with annualized growth of 4.9 percent in the first half of the year and 1.8 percent in the second half.[33] A State Department background note gives annual growth as 4.2 percent.[27] GDP reached approximately NIS 714 billion, or US$199 billion, with per-capita income of approximately $27,200.[34]

Unemployment averaged 6.1 percent, described as the lowest level since 1987 or 1995 depending on the source, and nominal wages rose during the year.[33][27] Annual inflation was 3.8 percent, above the 3 percent target ceiling; the pattern shifted from high inflation through September to a steep decline as global prices fell and excess demand was curbed.[34] Share and corporate-bond prices fell substantially, credit-market premiums rose, and credit supply contracted as capital-raising costs increased.[34]

Exports of goods and services rose 3.6 percent overall for the year, but the fourth quarter saw exports fall 35.6 percent compared with the same quarter of 2007, with diamond exports declining more than 36 percent and agricultural exports falling nearly 12 percent.[25] The global-crisis recession phase was described as beginning in June 2008, following a growth-and-recovery phase that ran from September 2003 through May 2008.[34]

Monetary policy shifted course several times: the Bank of Israel lowered interest rates in March and April, raised them through September, and then lowered them sharply through year's end. The Bank also bought foreign currency in large quantities to build reserves.[34] Fiscal policy was expansionary for the first time since 2004, primarily through further direct-tax reductions. Together with slower economic activity, this reduced tax revenues and increased the deficit to 2.1 percent of GDP, with tax revenue NIS 6.5 billion below plan.[34][35] The TA-100 stock index fell 51.1 percent.[35] The government approved guarantees for bank funding, public-private "Manof" investment funds to expand non-bank credit, and credit funds for small and medium-sized businesses and exporters.[35] Analysts attributed Israel's comparatively moderate exposure to the global financial crisis partly to improved fiscal-policy implementation and controlled expenditure growth in prior years.[34]

On April 28, Israel Aerospace Industries' MBT Space Division successfully launched the Amos-3 communications satellite from Kazakhstan, five days later than originally scheduled after a mechanical problem with the launch device was resolved.[36]

Several authoritative sources covering 2008 report different statistics, reflecting differing cut-off dates, scopes, or classification methods.

An Israeli government rocket-fire summary gives a narrative total of 3,278 landings—1,750 rockets and 1,528 mortar shells—but its monthly charts total 1,665 rockets and 1,497 mortar shells.[17] The State Department's human-rights report cites 1,571 rockets and 1,531 mortars, while its terrorism report gives approximately 1,750 rockets and 1,528 mortars.[1][3] The Shin Bet's provisional year-end account recorded more than 2,000 rockets.[16]

Operation Cast Lead fatality estimates also differ. The Israeli government reported 1,166 Palestinian fatalities, B'Tselem counted 1,387, and the Palestinian Center for Human Rights reported 1,434; the sources also classify combatants and civilians differently.[23][24] The number wounded in the Mercaz Harav attack is reported as ten by the religious-freedom report and eleven by the human-rights and terrorism reports.[1][32] Annual civilian deaths attributed to Palestinian attacks are counted as 24 in the human-rights report and 27 in the terrorism report, reflecting differing scopes and classifications.[1][3]