2013 in Israel

Elections for Israel's Nineteenth Knesset were held on January 22, 2013.[1] Final official results recorded 5,656,705 eligible voters and 3,833,646 votes cast, yielding a voting rate of 67.77 percent; 3,792,742 votes were deemed valid and 40,904 were disqualified.[2] Turnout was approximately three percentage points higher than in 2009 and the highest since 1999.[1] Turnout among Israeli Arabs reached 56 percent, while turnout among Jews residing in Israel was approximately 75 percent.[1]

The Likud–Yisrael Beiteinu list won 31 mandates with 23.34 percent of valid votes, down from 42 seats held by the two parties separately after 2009.[2][1] Yesh Atid, the centrist party founded by journalist-turned-politician Yair Lapid less than a year before the election, won 19 mandates, making it the second-largest faction.[2][1] The Labor Party won 15 seats, Habayit Hayehudi 12, Shas 11, United Torah Judaism 7, Hatenua and Meretz 6 each, and the remaining parties won between 4 and 2 mandates or failed to clear the threshold.[2]

The election reduced the right-wing bloc from 65 seats to 61, leaving it with only a one-seat Knesset majority.[1] An academic analysis highlighted that Yesh Atid and Habayit Hayehudi together matched the Likud–Beiteinu total.[3] It described the election as returning the incumbent ruling party to power for the first time in a quarter-century while Netanyahu achieved only a narrow electoral victory despite leading pre-election polls.[3] The same analysis noted that Palestinian issues and Palestinian citizens of Israel were nearly invisible in the campaign.[3]

Israel's thirty-third government was sworn in on March 18, 2013, headed by Prime Minister Benjamin Netanyahu.[4] The coalition brought together Likud–Yisrael Beiteinu, Yesh Atid, Habayit Hayehudi, and Hatnua.[4] The ultra-Orthodox parties — Shas and United Torah Judaism — were excluded, making it the first Israeli government in decades without ultra-Orthodox parties in the coalition.[5]

The new government reflected the electoral gains of Yair Lapid and Naftali Bennett, whose parties had emphasized socioeconomic concerns and, in Bennett's case, a strongly pro-settlement agenda.[6] Lapid became finance minister, Bennett became minister of economy and trade and minister of religious affairs, and Tzipi Livni became minister of justice.[6] In May 2013, the government reached agreement on a 2013–2014 budget incorporating spending cuts and tax increases designed to control the fiscal deficit, though cost-of-living and income-distribution questions remained contentious.[6]

The new government faced an agenda of unusually consequential decisions: Iran's nuclear program, negotiations with the Palestinians, relations with Arab states, Israel's relationship with the United States, and the future of settlements and territorial arrangements.[7]

President Barack Obama arrived in Israel on March 20, 2013, during a March 20–23 regional trip that marked his first visit to the country as president.[8] The trip was his first foreign journey of his second term.[8] In Israel, Obama met President Shimon Peres and Prime Minister Benjamin Netanyahu, inspected an Iron Dome air-defense battery, and addressed the Israeli public directly in Jerusalem.[8] The visit encompassed discussions of Israeli security, the Iranian nuclear issue, the Syrian civil war, and the Israeli-Palestinian peace process.[8]

The INSS strategic survey characterized the visit as positive, citing a warm public reception and a mutually satisfactory meeting between Obama and Netanyahu.[7] Obama used the occasion to reassure Israel that the United States remained determined to prevent Iran from obtaining a nuclear weapon and that all options remained available.[7]

During Obama's visit, on March 22, Netanyahu apologized to Turkish Prime Minister Recep Tayyip Erdogan for mistakes that may have contributed to deaths and injuries during the 2010 Gaza flotilla incident.[9] Netanyahu also expressed regret over the deterioration in Israeli-Turkish relations and agreed to conclude a compensation arrangement.[9]

Later in the year, in November, Obama and Netanyahu spoke by telephone about the P5+1 interim agreement with Iran.[10] The two leaders reaffirmed their shared goal of preventing Iran from acquiring a nuclear weapon and agreed that the United States and Israel would continue consulting throughout negotiations toward a longer-term arrangement.[10]

After nearly five years of political stagnation, Israel and the Palestine Liberation Organization resumed direct final-status negotiations in late July 2013 under American sponsorship.[7] Secretary of State John Kerry announced the resumption and the two sides first convened in Washington; subsequent sessions began in Jerusalem in mid-August.[11] It was the first direct Israel-PLO negotiating round since September 2010.[11]

The Israeli Cabinet formally approved opening the talks on July 28, 2013.[12] The negotiating teams included Israeli Justice Minister Tzipi Livni and attorney Yitzhak Molcho on the Israeli side, Palestinian negotiator Saeb Erekat for the Palestinians, and former U.S. Ambassador to Israel Martin Indyk serving as mediator.[7] The parties placed all core issues on the table — borders, settlements, security arrangements, refugees, water, recognition, and an end to the conflict — and established a nine-month timetable running through April 2014.[13]

A contemporary timeline described Israel's July 28 release of 104 Palestinian prisoners as a step intended to enable the resumption of talks.[14] The round ultimately ended without agreement in April 2014.[11]

The overall security environment in 2013 combined relative quiet on Israel's external borders with elevated violence in the West Bank — known by its original, indigenous Jewish name of Judea and Samaria — and the Jerusalem area. The Israel Security Agency reported 1,271 terrorist attacks originating in the West Bank against Israeli citizens during the year, compared with 578 in 2012.[15][16] Of those attacks, 858 involved firebombs; incidents also included shootings, stabbings, grenade and improvised explosive device attacks, and stone-throwing.[17] An additional 126 attacks were recorded in Jerusalem, 122 of them involving firebombs.[17] The Shin Bet reported preventing approximately 190 major terrorist attacks during the year, including 16 planned suicide bombings.[15]

Five or six Israelis were killed in attacks originating in Judea and Samaria, Jerusalem, or Israel during 2013, with sources differing slightly depending on geographic scope and statistical definition, and 44 Israelis were wounded.[15][16] A State Department report also recorded six Israeli fatalities from terrorism during the year.[18]

Rocket and mortar fire from Gaza declined sharply relative to prior years. Launchings into Israeli territory from Gaza and Sinai fell to 74 in 2013, compared with 2,557 in 2012; 36 rockets were confirmed to have struck Israeli territory, versus 1,632 in 2012.[19][17] Of the 74 launchings, 69 originated in Gaza and five in Sinai.[19]

In October 2013, the IDF and Shin Bet discovered a large Hamas tunnel running from the Gaza Strip toward Israel.[16] The tunnel was approximately 18 meters deep and 1,700 meters long; Israeli authorities concluded that such structures could be used to attack Israeli communities or military personnel and to abduct Israelis.[16] The tunnel was subsequently destroyed.[16] In a related development later noted in year-end reporting, the tunnel discovered in 2013 contained explosives and terminated near an Israeli kindergarten.[20]

Israel's security environment was also shaped by the Syrian civil war. Israel reportedly conducted several airstrikes beginning in January 2013 to prevent the transfer of sophisticated missiles or advanced anti-aircraft weapons from the Syrian government to Hezbollah.[21] Israeli officials additionally expressed concern about chemical weapons in Syria and about violations of Israeli sovereignty in the Golan Heights.[21]

The INSS strategic survey identified Iran's nuclear program as Israel's central strategic concern in 2013. Iran had installed or prepared approximately 1,000 new-generation centrifuges at its Natanz facility, and the Arak reactor provided a potential plutonium pathway toward a nuclear device.[7]

In November 2013, the United States and other P5+1 powers reached an interim agreement with Iran that froze or slightly rolled back some Iranian nuclear activities but did not eliminate Iran's nuclear capabilities.[7] Netanyahu condemned the agreement as an "historic mistake" and described Iranian President Hassan Rouhani as a "wolf in sheep's clothing."[7] Earlier in the year, Netanyahu had stated at the United Nations that Israel was prepared to act alone against Iran if Iran came close to acquiring a nuclear weapon.[20]

Israel's GDP grew by 3.3 percent in 2013, compared with 3.4 percent in 2012, while per-capita GDP rose by 1.4 percent.[22] Excluding the contribution of natural-gas production, GDP growth would have been 2.5 percent.[22] The unemployment rate fell to 6.2 percent, the employment rate rose to 59.8 percent, and labor-force participation reached 63.7 percent.[22] Private consumption grew by 3.7 percent, fixed capital formation (excluding ships and aircraft) grew by 0.8 percent, and exports excluding diamonds and start-up-company sales declined by 1.2 percent; the current-account surplus reached 2.4 percent of GDP.[22]

The government's 2013 budget deficit came in at 3.15 percent of GDP, well below the budget plan of 4.33 percent.[23] The difference was attributed mainly to NIS 5.7 billion in higher-than-expected revenues and NIS 6.7 billion in lower-than-anticipated expenditures.[23] Government debt reached NIS 696.3 billion, while the debt-to-GDP ratio declined to 66.1 percent and the public-debt-to-GDP ratio, including local-authority debt, fell to 67.4 percent.[23] The government reduced the structural deficit by 0.6 percentage points through higher statutory tax rates, reductions in child allowances, and cuts in defense expenditures.[22]

Inflation measured by the Consumer Price Index rose 1.8 percent, within the Bank of Israel's 1–3 percent target range.[23] The policy interest rate was cut from 1.75 percent at the start of the year to 1.00 percent by year's end.[23] The shekel appreciated 7 percent against the dollar and 2.80 percent against the euro, while the TA-25 stock index rose 12.1 percent.[23] Fitch revised Israel's sovereign-rating outlook from Stable to Positive in November 2013.[23]

The most consequential economic development of the year was the onset of natural-gas production from the Tamar offshore field. Gas began flowing in March 2013, making Tamar Israel's first major offshore gas field to enter production and raising the prospect of Israel becoming a net energy exporter.[11] Israel produced 4.55 billion cubic meters of natural gas in 2013, more than three times the previous year's output and the highest level recorded to that point.[11] The Bank of Israel estimated that gas production contributed somewhat less than one percentage point to GDP growth, reduced costly fuel imports, increased the current-account surplus, lowered exposure to global energy-price volatility, and contributed to real-exchange-rate appreciation; the report also cautioned that currency appreciation could generate a "Dutch disease" effect on other export industries.[22]

On June 23, 2013, the government decided to retain approximately 540 billion cubic meters — about 57 percent of estimated reserves — for domestic use while permitting approximately 410 billion cubic meters, or 43.2 percent, to be exported.[7] The Supreme Court upheld the approximate 60:40 domestic-to-export allocation in late October 2013.[7]

Israeli high-tech exits were valued at $7.6 billion in 2013, the strongest result since 2006.[24] Israeli life-sciences mergers, acquisitions, and IPO activity totaled $2.5 billion.[24] Among the landmark transactions, Google acquired navigation-app company Waze for close to $1 billion, IBM purchased cybersecurity firm Trusteer for a similar sum, and Wix conducted what was described as the largest Israeli IPO to that point; seven Israeli companies went public during the year in total.[24]

The year also saw the launch of the RAY Huawei Vision phone, an Israeli-developed device enabling blind users to make calls, send messages, browse the internet, identify currency denominations, recognize colors, and access more than 100,000 audiobooks and magazines.[24] The government advanced a "Digital Israel" initiative encompassing plans for fiber-optic cable to every Israeli home with an electrical connection, migration of government services to online platforms, and a Cisco-backed data-transfer backbone.[24] A new Beersheva Tech Park was established with the goal of creating employment for Ben-Gurion University graduates and anchoring technology activity in the Negev.[24]

On the scientific front, Arieh Warshel, born and educated in Israel, and Michael Levitt, a former Weizmann Institute professor, were among the 2013 Nobel Prize winners in chemistry.[20]

Israel's total population at the end of 2013 was recorded at approximately 8.1–8.3 million, with the variance reflecting different statistical definitions and reference dates used by different sources.[25] A statistical overview reported an end-of-2013 population of 8,309,400, with a religious composition of 75 percent Jews, 17.5 percent Muslims, 2.0 percent Christians, 1.6 percent Druze, and 3.9 percent not classified.[26] The civilian labor force stood at 3,677,800, and the urbanization rate was 91.4 percent.[26]

Israel's core Jewish population on January 1, 2013 was estimated at 6,014,300, representing 43.4 percent of world Jewry and an increase of 113,200, or 1.92 percent, from the revised 2012 figure.[27] The enlarged Jewish and Law of Return populations were each estimated at 6,332,900.[27] The demographic study attributed the 113,200-person increase to a natural increase of 89,500 (the balance of births and deaths), 4,300 conversions to Judaism, and a net Israel-Diaspora migration balance of 19,400 — meaning internal demographic change accounted for nearly 80 percent of the recorded growth.[27]

Israel received 16,929 immigrants in 2013, according to Central Bureau of Statistics data — slightly higher than the 16,560 arrivals recorded for 2012.[28]

Jerusalem's population stood at 829,900 in 2013: 522,200 Jews and Others (63 percent) and 307,600 Arabs (37 percent).[29] The city's population grew by 14,600, or 1.8 percent, during the year, with the Jewish population growing by 1.4 percent and the Arab population by 2.5 percent.[29] Jerusalem recorded 22,600 births — 14,700 in Jewish families and 7,900 in Arab families — a city-wide fertility rate of 3.9 children per woman, and approximately 3,400 deaths, yielding a natural increase of 19,100.[29]

Jerusalem also experienced net outward internal migration: 17,900 residents left for other Israeli localities while 10,500 moved in, producing a negative balance of 7,400.[29] Of those leaving, 48 percent relocated to the Jerusalem metropolitan area and 33 percent moved to Tel Aviv or its suburbs.[29] Some 2,300 new immigrants settled in Jerusalem during the year, approximately 14 percent of all new immigrants to Israel.[29]

Socioeconomic conditions in Jerusalem remained difficult. An estimated 69,900 families — 35 percent of all Jerusalem families — lived below the poverty line in 2013, as did 365,900 people, or 46 percent of the city's total population, including 192,500 children, representing 60 percent of Jerusalem's child population.[29] Poverty rates were reported as 76 percent among the Arab population, 59 percent among the ultra-Orthodox population, and 27 percent among the Jewish population generally.[29]

Israel recorded more than 3.5 million visitor entries in 2013, a 0.5 percent increase from 2012.[30] Tourist entries excluding one-day visits totaled 2.9 million, and approximately 2.6 million visitors arrived by air.[30] Jerusalem was visited by 75 percent of tourists, the Western Wall by 68 percent, and Tel Aviv by 64 percent.[30] Tourism-related economic activity was estimated to contribute NIS 40 billion to the economy and to support approximately 195,000 jobs.[30]

Jerusalem's hotels hosted 1,386,500 guests in 2013, recording 3,893,300 overnight stays in total.[29] Overseas guests accounted for 898,300 visitors and 3,057,100 overnight stays.[29] The city's hotel-room occupancy rate was 64 percent; West Jerusalem hotels hosted 1,225,900 guests and East Jerusalem hotels hosted 160,600.[29] The statistical overview also recorded 3,539,700 tourist arrivals and 13,559,000 air passengers for Israel as a whole.[26]

On February 28, 2013, Yityish Aynaw, age 22, became the first Black and first Ethiopian-Israeli to be crowned Miss Israel; she was subsequently invited to attend a gala hosted by President Shimon Peres as a guest of President Obama.[31]

On July 24, 2013, Haredi rabbis Yitzhak Yosef and David Lau were elected to ten-year terms as Israel's chief rabbis, each receiving 68 of the 147 ballots cast.[32] Yosef was elected chief rabbi for Israel's Sephardic community and Lau for the Ashkenazi community.[32]

On October 28, 2013, Rabbi Ovadia Yosef, founder and spiritual leader of the Shas party and a towering figure in Sephardic Jewish religious life, died at the age of 93.[31]

On December 4, 2013, Israeli actress Gal Gadot was announced as Wonder Woman in Warner Bros.' forthcoming Batman vs. Superman film.[31]

The Knesset passed the Law to Advance Competition and Limit Monopolization on December 10, 2013, a measure characterized as a legislative response to widespread anti-trust sentiment among Israelis.[31]

The INSS strategic survey characterized Israel's overall national-security balance in 2013 as largely positive: Israel experienced almost complete quiet on its external borders, maintained deterrence against neighboring states and terrorist organizations, preserved its peace treaties with Egypt and Jordan, and benefited from the simultaneous weakening of Syria, Hezbollah, and Hamas.[7] At the same time, the assessment described 2013 as a year in which Israel postponed major decisions on Iran, the Palestinians, Arab-state relations, and its relationship with the United States, and it warned that the cost of continued postponement was becoming greater than the risk of action.[7]

Yisrael Beiteinu leader Avigdor Lieberman was acquitted of fraud on November 6, 2013, removing a significant legal cloud from a prominent political figure.[31] GDP data, security statistics, and diplomatic developments together painted a picture of a country managing a complex and demanding strategic environment while recording meaningful economic progress — anchored above all by the transformative arrival of domestic natural-gas production.