Why Israelis will vote on the economy, not security

Last summer, Israel endured its longest war in decades and saw missiles fall across the country. A string of terror attacks followed in Jerusalem. A year ago, Israeli-Palestinian negotiations collapsed again. Meanwhile, there’s increased unrest on Israel’s northeast border, and world powers are negotiating with Iran over its nuclear program.

So in next week’s election, national security is the top issue, right? Wrong. A poll last week showed that, when they vote on Tuesday, most Israelis will think first about Israel’s high cost of living. Security comes in second.

It’s not that war and peace aren’t important to Israelis. They just don’t think the elections will make much difference. A February poll by the Israel Democracy Institute shows that Israelis don’t hold their government responsible for the impasse with the Palestinians or the crisis in U.S.-Israel relations.

According to the poll, more than two-thirds of Israelis think Israel depends on the United States regarding defense, foreign policy and economics. But only about a quarter of Israelis hold the Netanyahu government primarily responsible for the deterioration in relations with the White House, and only 43 percent said the U.S. administration would be friendlier to a center-left government.

When it comes to the Palestinians, Israelis say there’s little any government — left or right — can do. Fifty-eight percent moderately or strongly agreed that “the peace process with the Palestinians will not advance, because there is no solution to the disputes between the sides.” A similar number said that if the center-left forms a coalition, the Palestinian Authority still won’t show more flexibility in negotiations.

The leading parties have been less than clear about how they’ll approach the Palestinians. Prime Minister Benjamin Netanyahu’s Likud has doubled down on its opposition to a Palestinian state but hasn’t presented an alternative plan. Netanyahu’s opponent, Isaac Herzog, supports two states and a partial settlement-building freeze, but about the peace process says only that he’ll try hard to negotiate with the P.A.

On economics, many of Israel’s political parties have been somewhat more specific. Several have presented plans for dealing with Israel’s housing crisis and the high cost of living.

And economic issues are more present for Israelis. While wars may happen every couple years, Israelis pay bills every month. An ad for the economics-focused Kulanu party drives this point home, asking voters, “How many times have you gotten a call from the White House? How many times have you gotten a call from the bank?”

As Israeli election nears, peace earns barely a mention

In a rare TV debate ahead of Israel's tightly contested election on March 17, eight party leaders from across the political spectrum held forth for 90 minutes in a noisy, argumentative discussion of Israeli policy.

While social issues and the economy were grappled over at length, the conflict with the Palestinians and efforts to forge a two-state solution to the crisis — the issue which much of the world has looked to the region to resolve for the better part of 30 years — drew little new comment or insight.

The word “peace” was mentioned five times, three of those by the only Arab candidate taking part, while Naftali Bennett, the leader of the ultra-nationalist Jewish Home party, declared he would never let the Palestinians have their own state.

In part, the focus was understandable — Israeli voters are most concerned about house prices and the cost of living. But it underlines how dim prospects now are for any progress in resolving perhaps the world's most intractable conflict.

“The Palestinian issue, as much as it is crucial, is not perceived as existential, which is the case with Iran,” said Reuven Hazan, a professor of political science at Hebrew University and a specialist on the Middle East.

“And it is not perceived as manageable over the next three years, which something like the economy is.”

Instead, the election has become a two-horse, two-issue race, with Prime Minister Benjamin Netanyahu, who is seeking a fourth term, emphasizing the threat from Iran and regional Islamist groups, and the center-left opposition criticizing his perceived failures on social and economic policy.

The latest polls published on Tuesday put the center-left ahead, predicting it will win 24 or 25 seats in the 120-member Knesset, against 21 for Netanyahu's Likud party.

Other polls show a tighter race, with each of the main parties expected to win 23 or 24 seats. As has always been the case in Israel's 67-year history, no party will secure a majority, making coalition negotiations critical.

Given his experience of cobbling together partnerships and the fact that there are more parties on the right around which to build an alliance, Netanyahu could still return as prime minister, even if his party does not win the election.

The center-left Zionist Union would need to bring one or two ultra-Orthodox parties, the centrist Yesh Atid movement and Kulanu, a breakaway party from Likud, into its camp to be able to form a working coalition, a possibility but a slim one.


If Netanyahu returns, the chances for a resumption of peace talks, which last broke down in April 2014, are low, not just because analysts believe Netanyahu does not want them, but because the Palestinians, beset by internal divisions, are not seen as willing partners either.

What's more, the most powerful figure alongside Netanyahu in any new right-wing government is likely to be Bennett, the 42-year-old Jewish Home leader, who advocates the annexation of most of the occupied West Bank, which Palestinians want for an independent state, along with East Jerusalem and Gaza.

Bennett's party is expected to capture 13 seats and he himself is lined up to be defense minister if Netanyahu wins again, a position with direct oversight of Palestinian issues.

Another complicating factor is settlements. Despite U.S. and European opposition, Netanyahu has continued to expand the building of Jewish homes in the West Bank and East Jerusalem, and that policy is unlikely to change.

Both Bennett and Avigdor Lieberman, the outgoing foreign minister and head of the ultra-nationalist Yisrael Beitenu party, are ardent supporters of settlement expansion and would press that line hard in any future Netanyahu government.

When it comes to the center-left getting into power, the chances of a resumption of peace talks may be better — especially with the White House adding pressure in the last 18 months of Barack Obama's presidency — but the first priority would be to deliver on their economic and social promises.

And on settlements, the center-left is adopting a line not far distant from Likud's, saying it would continue building in existing settlement blocs, a policy in defiance of the United States and Europe, not to mention the Palestinians.

Gilead Sher, a former Israeli peace negotiator, believes a regional approach is needed, with the United States, Europe, Russia and the United Nations bringing Egypt, Saudi Arabia, Jordan and the Gulf states into efforts to conjure a solution.

Even then, he favors small, interim steps rather than a “big-bang” approach to two states, Israel and Palestine, side by side, which he acknowledges is a tall order at this stage.

As a result, and barring a dramatic turn of events, the coming years are unlikely to bring any progress in resolving the conflict. Instead, unilateralism will be the watchword: Israelfocused on its domestic and regional concerns, the Palestinians seeking to bring Israel before the International Criminal Court.

Economic issues whip up Israelis in chocolate pudding election

Israel's high cost of living is set to dominate a March 17 election that could shake up Prime Minister Benjamin Netanyahu's coalition, with voter anger symbolized by an overpriced dessert.

In a country where the influence of small parties makes elections notoriously hard to forecast, many experts still expect rightwing leader Netanyahu to keep power. But the focus on domestic policy and economics, rather than on security and Palestinian peacemaking, means the outcome is even more difficult to predict than usual.

Some Israelis are speaking of an election that could sweep away the familiar political order, in which left and right have jockeyed for power by appeasing interest groups while doing little to reform an economy dominated by big conglomerates.

“I now believe we have a chance to exile our failed leaders. We have a moment to change the direction Israel goes,” said Naor Narkis, a 25-year-old former intelligence officer who became an unlikely overnight national celebrity when he posted a photo on Facebook showing a chocolate pudding in Berlin selling for a third of the price of a similar “Milky” dessert in Israel.

The cost of living has been at the top of the domestic political agenda since 2011, when hundreds of thousands of Israelis took to the streets in protests sparked by the rising price of cottage cheese, a popular staple.

In the last election 18 months ago, the issue helped propel TV personality and political newcomer Yair Lapid to the post of finance minister after his centrist party placed second.

But since then, many Israelis say Lapid failed to deliver on promises of economic reform, and voters say they are now more serious about holding politicians accountable. Polls predict Lapid's Yesh Atid party will shrink to about half its size.

Netanyahu's own Likud party could also lose votes. It might even win fewer seats than a left-center bloc led by opposition Labour leader Isaac Herzog and centrist former peace negotiator Tzipi Livni, though Netanyahu could remain prime minister anyway if they have difficulty forming a coalition.

Polls show voters shifting to a new centrist party led by Moshe Kahlon, one of the few politicians with a reputation as a successful economic reformer. As communications minister two years ago he was behind a plan to allow new mobile phone operators into the market, which helped bring down prices.

Netanyahu held onto power in the last election despite a campaign that critics said focused too much on his familiar theme of national security, and not enough on economic issues.

This time around, he is making the economy a central theme. On Sunday he proposed raising the minimum wage for civil servants and marketing more lower cost apartments. He has promised to lift the 18 percent value added tax on milk, cheese, eggs and bread.

Even his bedrock issue, national security, depends on “economic strength and economic growth”, he says. “It's for the needs of our lives, the quality of our lives. To secure the future of our youth, all this requires a strong economy.”


Israel is a rich country, but its prices are higher and wages are lower than in the United States and Western Europe. Since becoming a star over the “Milky” pudding, Narkis has argued that unless Israel becomes more affordable, young Israelis “will just leave”.

After military service, he asked himself, “'What does this country have to offer me?' The answer was not a lot. Even if you work here in a full time job you are not able to buy an apartment,” he told Reuters.

“Israel is a country for very rich Jews and the rest can go,” he said. “The biggest threat to Israel is that young people won't want to live here.”

Fixing the cost of living problem requires deep reforms of an economy dominated by a few powerful conglomerates that have stifled competition. Big companies are slated to be broken up, but the process will take years. The government has formed many committees to study the problem, but few changes have been made.

A government survey in June found that 4 in 10 Israelis are not able to make ends meet and 47 percent are not satisfied with their economic situation.

A basket of basic products was 12 percent more expensive in Israel than the OECD average last year, according to the Bank of Israel, while gross salaries are $10,000 lower. While Israel's consumer price index rose 23 percent in the past 11 years, food prices jumped 39 percent.


The business sector puts much of the blame for high consumer costs on Israel's VAT and high import taxes aimed at protecting farmers and producers.

Uriel Lynn, who heads the Federation of Israeli Chambers of Commerce, called this intervention “anachronistic”.

“Stop wasting so much time and complicating things in making more laws … and interfering so intensely in the way the business sector functions. Just expose the total industry to importation,” he said.

Economy Ministry director general Amit Lang also favors expanding imports while easing regulation. There are 37 different regulators in Israel checking imports, he noted.

“If we open the market … it will be much more competitive and local producers will have to become more efficient and prices will fall,” said Lang, who chaired a government panel that examined measures to cut food costs.

Retailers say they are addressing the cost issue by bypassing big importers to carry out their own, cheaper imports, and by selling more products under their own labels that are cheaper than big brands.

Retailers and producers blame each other for high prices. Israel's largest supermarket chain, Shufersal, said half of the products it sells come from only 10 big suppliers. Suppliers say big grocery chains impose high markups.

$1 = 3.8913 shekels

Study: Legalizing marijuana would help Israeli economy

Legalizing marijuana would generate more than $450 million annually for the Israeli economy, a new study shows.

The black market for cannabis in Israel is worth $707 million annually, according to the study released Tuesday by the Jerusalem Institute for Market Studies. If the sale of marijuana were legalized and taxed at rates similar to cigarettes, it would add about $268 million in tax revenues and another approximately $198 million in savings to law enforcement directly related to illegal marijuana use, the study found.

At least 275,000 Israeli adults used marijuana in the past year, the study found; the tax revenue estimate was based on that number.

Some 75 percent of those questioned in a public opinion survey analyzed in the study said they believe marijuana has legitimate medical uses. Israeli support for medical marijuana was similar to the level of backing recorded in the United States in a survey earlier this year, according to the institute.

[Related: What Israel can teach America about medical marijuana]

Twenty-six percent of Israelis supported the legalization of marijuana, the survey found, with 64 percent opposed. In the United States, 52 percent of survey respondents supported legalization.

The Jerusalem-based firm Kevoon conducted the survey of 500 respondents reflecting a representative sample of Israeli Jews. The survey had a sampling error of 4.5 percent.

“Recognizing the enormous financial gains that would come from legalization demands that the government take a serious look at the proposal to legalize cannabis use under specific guidelines,” said Yarden Gazit, a co-author of the survey. “There is no disputing that if the public is able to get past the wholly negative misperceptions associated with marijuana usage and appreciate the potential benefits with limited social or health care costs, this is an idea that needs open-minded and serious re-examination at this time.”

Seaport battle looms as Israel plans new competition

Israel is betting its economic future on high-tech exports but faces a low-tech bottleneck in state-owned seaports subject to work stoppages and slowdowns because of the enormous strength of their unions.

All that may be about to change.

The government, for years unwilling to risk a confrontation that could paralyse trade given that 99 percent of exports and imports are transported by ship, last month pledged to end the monopolies of the two main ports of Ashdod and Haifa.

By introducing private piers to compete with the two ports, service would improve and prices would drop across the board, Prime Minister Benjamin Netanyahu said.

The port unions — possibly the most powerful in the country with just 2,400 workers earning double the average public sector salary — are likely to be severely weakened and may have to make concessions or face layoffs.

At a time when the middle class is squeezed by slow economic growth and high costs, there is little sympathy for their plight among average Israelis, let alone businessmen.

“Labour unions in the ports are very strong, very belligerent, very egotistical and are using their control of a key state property against the state,” said Uriel Lynn, president of the Federation of Israeli Chambers of Commerce.

The unions declined to speak with Reuters for this article and referred questions to the umbrella Histadrut labour federation.

But in a rare television interview in January, the head of the Ashdod union Alon Hassan defended the role of collective bargaining and the right to strike, protected by law, and said the port workers were misunderstood.

“I have no criminal background, and sadly, they point at me in the streets like some mafioso,” he told Israel's Channel 10.

“I see and hear and read that on the outside they don't like us, the port workers, and me specifically. That they paint me as an extortionist, a problematic person. Something I am not.”

The unions will not budge, he said: “I am protecting the workers' agreements that have been signed for tens of years. Fanatically. I am not open to unilateral attempts to breach such agreements.”

Cranes at the port of Haifa. Photo by Ronen Zvulun/Reuters

Articulating the government's position, Finance Minister Yair Lapid said simply: “Let there be war.”


Netanyahu was reelected in January with a mandate to do whatever it takes to fix the moribund economy, which grew 3.2 percent in 2012, its slowest pace in three years. Hundreds of thousands of Israelis staged unprecedented nationwide protests in mid-2011 over high housing costs and soaring prices.

Netanyahu has placed the blame for the high cost of living on monopolies and cartels that prevent competition and began cracking down, starting with the country's most vital services.

On April 21 the government approved an open skies deal that liberalises aviation between Israel and Europe and is expected to bring in more foreign airlines and lower air fares. A two-day strike at flag carrier El Al and two smaller Israeli airlines ended with the government agreeing to pay a higher portion of the airlines' security costs.

Car importers and television operators are also in Netanyahu's sights.

Few groups wield as much power as the port workers, as gatekeepers for Israel's international commerce, however.

The Manufacturers Association of Israel said the country lost 25 million shekels ($7 million) directly and tens of millions more indirectly in a dispute at Ashdod port in April.

The workers, who held a 10-day slowdown in protest at a new rule requiring port navigators to stay on site throughout their shift even at quiet times, forced 32 cargo ships to wait hours off the coast.

Five ships were eventually redirected to Haifa about 80 miles (130 km) to the north and five others simply “took off”, the manufacturers' group said.


Netanyahu has faced off with the port workers before. A decade ago, when the ports were run by a single government-owned company, ships wanting to dock in Israel were delayed an average of 17.4 hours, according to government statistics.

Then finance minister, Netanyahu in 2005 pushed through a reform that broke the ports into three units and a separate managing body called the Israel Ports Co, all still government-owned. The unions stopped work for one month before agreeing to the change.

The government at the time made clear this was considered only the first step toward total privatisation of the port system and two years later, Israel Shipyards began operating a small private port on a floating dock in Haifa.

Service has since improved. Container vessels in 2012 waited on average 3.7 hours to dock in Haifa, which handled 24 million tonnes, and 6.5 hours in Ashdod, which received 19.5 million tonnes. Israel Shipyards handled another 1.3 million tonnes.

But the wait time is still high by international standards.

Containers at the port of Haifa. Photo by Ronen Zvulun/Reuters

“In most ports in world, the quays wait for the vessels and not the vessels wait for the quays. So anything above zero would not be acceptable,” Dov Frohlinger, chief operating officer of Israel Ports Co, told Reuters.

“What will happen to the waiting time in the next five to six years as cargo grows?”

Rafi Danieli, chief executive of Israel's biggest shipping company Zim, agreed the situation was substandard.

“In central and efficient ports in the world you work according to windows. You know exactly when to arrive and when to enter … In Israel, less so,” he said.


In February, the state sold the rights to manage and operate the small Red Sea port of Eilat, which handles just 5 percent of the country's sea trade. Israeli firm Papo Maritime paid 120 million shekels for a 15-year deal, and it has the option to pay 105 million shekels more for an extra 10 years.

But in an example of the inflexibility of the system, negotiators had to reach an agreement with every one of the port's 120 workers, a government official told Reuters. Papo Maritime was the only bidder to hang on to the end.

Shortly after Eilat was privatised, Transport Minister Yisrael Katz outlined the rest of the plan: “Opposite each port, a private, competing pier must be built.”

The plans to build the piers, which will cost a little more than 4 billion shekels each, is awaiting final government approval. But Meir Shamra, who heads the Finance Ministry's privatisation unit, said the government was determined to make it happen.

Although no talks are currently underway, preliminary checks showed investors will come when the time is right, he said.

Avi Edri, who represents the port unions among the 800,000 public sector and other workers at the Histadrut federation, said his constituency “would never let it (competing private ports) happen”.

The unions want to explore the idea of forming a private company in which workers could own a minority stake, which would give them an incentive not to strike, Edri told Reuters. Shamra said the government might be open to the idea.

But the right to strike must remain inviolate, Edri said.

“Even if they gave a million shekels to each worker, the right to strike, or the right to unionise, or the right to protest is holy,” he said. “It is above all the money in the world.”

A worker sits as a crane unloads containers from a ship at the port of Haifa. Photo by Ronen Zvulun/Reuters

$1 = 3.65 shekels. Editing by Jeffrey Heller and Sonya Hepinstall

Obama pledges to stand with Israel, stop Iranian bomb, in State of the Union

President Obama pledged to keep Iran from obtaining a nuclear bomb and to “stand steadfast” with Israel in his State of the Union speech.

“The leaders of Iran must recognize that now is the time for a diplomatic solution, because a coalition stands united in demanding that they meet their obligations, and we will do what is necessary to prevent them from getting a nuclear weapon,” Obama said Tuesday evening.

Obama also said he would continue to back democratization throughout the Middle East.

“And we will stand steadfast with Israel in pursuit of security and a lasting peace,” he added. “These are the messages I will deliver when I travel to the Middle East next month.”

Much of Obama's speech was devoted to job creation proposals, particularly involving infrastructure building, and reducing the deficit through spending cuts and tax reform.

He also focused on other signature second term issues, including immigration reform, addressing climate change, and bringing about new gun controls.

Survivors of  shootings and relatives of fatalities were guests of the Obamas at the State of the Union.

Urging Congress to at least bring gun control laws to a vote, he singled out among others Gabby Giffords, the former Arizona congresswoman who was shot in the head in January 2011 in an assault that claimed six lives.

Giffords was present at the speech with her husband, Mark Kelley.

Bank of Israel Governor Stanley Fischer to step down

Stanley Fischer is stepping down from his position as governor of the Bank of Israel.

Fischer, 69,  will be leaving office on June 30 after serving eight years that included shepherding the Israeli economy through the global financial crisis of 2007-08. His term was scheduled to end in 2015.

He reportedly informed Israeli Prime Minister Benjamin Netanyahu of his decision on Tuesday, according to the bank. He is scheduled to hold a news conference on Wednesday morning to discuss his decision to leave.

Fischer said in a statement issued Tuesday by the bank that he was grateful for the opportunity to serve as the governor of the Bank of Israel, “especially during a challenging period that included the global economic crisis, a complex geo-political reality, and domestic social issues.”

In 2010, Fischer was named the world's best bank governor. Following the global economic woes of 2007-08, in September 2009, the Bank of Israel became the first bank in the developed world to raise its interest rates.

Fischer became an Israeli citizen when he assumed his position. He is known for his American-accented but nearly flawless Hebrew.

He previously served as chief economist at the World Bank.

Fischer earned a doctorate in economics from the Massachusetts Institute of Technology, where he also worked as a professor.

Netanyahu said Fischer played a major role in the economic growth of the State of Israel and in the achievements of the Israeli economy.

“His experience, his wisdom and his international connections opened a door to the economies of the world and assisted the Israeli economy in reaching many achievements during a period of global economic crisis,” Netanyahu said after meeting with Fischer.

Israeli markets cheer centrists’ election gains

Israeli markets rose on Wednesday on investor hopes that the outcome of the previous day's election means Benjamin Netanyahu will remain prime minister and ultra-Orthodox parties have no role in government.

The blue-chip Tel Aviv 25 index rose 1 percent to 1,204.65 points, near last week's year-high of 1,225.76, while the broader TA-100 index closed 0.9 percent higher.

Government bond prices gained as much as 0.5 percent and the shekel appreciated 0.4 percent to 3.722 per dollar from Monday's fixing of 3.738, near a 10-month peak.

“We will enjoy this for a few days,” said Zach Herzog, head of foreign sales at the Psagot brokerage. “The downside will be if the coalition talks drag on or if we see Labour or (ultra-Orthodox) Shas in serious talks to get involved.

“This can be a launching pad for a positive 2013,” he added.

Herzog said a coalition government more centrist than Netanyahu's current right-wing and religious administration would be better placed to impose needed budget cuts.

Ultra-Orthodox parties have traditionally demanded budget-draining state subsidies for their institutions in return for joining coalitions in Israel, where no one party has ever won a parliamentary majority on its own.

Results of Tuesday's parliamentary vote showed Netanyahu's right-wing Likud-Beitenu group emerging on top with 31 of parliament's 120 seats, albeit dropping sharply from the current 42 after voters shifted support to centrists focusing on Israelis' rising cost of living.

Yesh Atid, a new centrist party that has pledged to ease the burden of Israel's middle class, took 19 seats, one more than the number won by ultra-Orthodox parties.

If Yesh Atid's leader, former TV news anchor Yair Lapid, opts to join a Netanyahu coalition, along with the far-right Jewish Home party, the prime minister would likely control 61 seats, giving him a narrow parliamentary majority.

Netanyahu, however, has said he hopes to form as broad a government as possible, signaling the way was open for ultra-Orthodox factions to participate.


Netanyahu's reputations as a skilled economic operator was harmed just before the election when data showed Israel posted a budget deficit of 4.2 percent of gross domestic product in 2012 – more than double its initial target.

To meet a target of 3 percent in 2013, the government – which overspent heavily the past two years to keep its previous coalition partners happy – will have to find some 15 billion shekels ($4 billion) of cuts, as well as raising taxes.

Credit agency Fitch forecast the deficit reaching 3.8 percent of GDP this year, saying the stable outlook on its 'A' rating risked being downgraded in the event of “serious fiscal slippage”.

But a move towards the government's 60 percent debt-to-GDP target could result in positive ratings action, its sovereign ratings director Paul Gamble said in a report on Wednesday.

He also said the coalition talks would focus on budgetary issues and likely be time-consuming.

Psagot's Herzog said the market was also pleased that the centre-left Labour Party, whose leader, Shelly Yachimovich, has railed against capitalism during the election campaign, received just 15 seats, a poor than expected showing.

“In addition to the positive result that Netanyahu was re-elected as prime minister, you have a significant blow to the prestige to the anti-business candidate,” Herzog said.

A currency dealer at a large Israeli bank said most of Wednesday's dollar selling came from local rather than offshore customers. He said there was still a way for the dollar to fall before its next support level at 3.7050 shekels.

According to financial information services firm Markit, Israeli five-year credit default swaps – which insure against debt default – edged up 125 basis points from 123 on Monday. They had been at 156 basis points in November when military tensions escalated in the Gaza Strip.

Additional reporting by Tova Cohen and Carolyn Cohn; Editing by Jeffrey Heller, John Stonestreet

Israeli economics 101

Ofek Lavian has two passions: business and Israel, his native land.

What he felt that he was missing when he went to college at the University of Southern California was an opportunity to learn about his home country while interacting with people who shared his same interests in it.

“I found myself really struggling to find an organization on campus that was tailored to my passions,” said the 20-year-old, who moved to Silicon Valley when he was 4. “I found a lot that were related to Judaism were political, religious, and/or cultural. As a business major and an entrepreneur, I wanted to look at Israel through another lens.”

Then he heard about the TAMID Israel Investment Group, a multi-phased program on college campuses connecting American students with the Israeli economic landscape. It seemed like the perfect way to merge his interests and learn about them in a new way.

When Lavian, now a junior, helped start a chapter at USC in 2011, there were 25 members. By the end of this semester, the group expects to have 40. To set it up, Lavian received $3,500 in funding from The Jewish Federation of Greater Los Angeles; now, all the funds are solicited from private donors.

The origins of TAMID date back to 2008, when a group dedicated to providing American students with access to Israeli businesses launched at the University of Michigan. Since then, it has expanded to eight other campuses across the country, including USC and the University of California, Berkeley. In the fall, a handful of others is expected to be added, one of which may be University of California, Los Angeles, according to Max Heller, TAMID’s executive director of business development.

The goal is to “further advance and strengthen the connection between the United States and Israel,” he said. “We pioneer the next generation of American commitment to Israel by reaching out by future leaders on campuses.”

Students studying business, entrepreneurship, economics and similar subjects are eligible to join TAMID when they are undergraduates. Those selected take one semester of education in the fall on general business principles and the relationship between the United States and Israel from an economic perspective. The education component is divided among member-driven presentations and lectures from venture capitalists, professors and individuals well-versed in Israel’s economic scene. 

Students showcase their research on certain aspects of business, and in the past they’ve hosted speeches on how the nuclear threat from Iran might affect Israeli businesses, as well as what changes might occur after the discovery of oil reserves in Israel. 

TAMID also gives students the opportunity either to invest in Israeli securities using money they raise from donors or do pro-bono consulting work for Israeli startups. 

During the summer, TAMID, which is based at the University of Michigan, hosts a fellowship trip to Israel. When it was first offered in 2010, five students went. There were eight in 2011, and last summer the number grew to 17. Students partook in internships in finance, energy sustainability and technology, and worked at various startups. Next summer, 40 fellows will have the chance to go and gain real world experience.

Although most of the students are Jewish, it is becoming diversified. Heller said that the larger a certain program grows, the more non-Jewish students get involved. The largest mix of students is currently at Michigan. 

“We pride ourselves on working with talented and motivated students,” Heller said.

Lavian started his own T-shirt business with a fellow fraternity brother called Campus Ink in fall 2010. But he wanted to meet other self-starters. Through TAMID, he’s accomplished this while learning about Israel’s contributions to alternative energy, medicine and technology.

Last summer, Lavian secured a venture capital internship in Tel Aviv and lived alongside the program’s other students from around the country. He also met with the entrepreneurs behind Doweet, which coordinates meet-ups with friends and event planning, and Peer5, a startup that focuses on helping video content providers deliver the best viewing experience. 

Now, USC consultants from TAMID are working with these companies. The students assist the startups with learning about the American economy and demographics, while they, in turn, have the chance to see what it takes to build a business. 

“[Since there are] 7 million people in Israel and [more than] 300 million in the United States, for any Israeli company to be successful, they need to have their target market be global or in the U.S.,” Lavian said. “A lot of them have the technology in Israel but they need to target the U.S. market. That’s where TAMID comes in.”

Avior Ovadya, 25, who came to America from Israel to attend college four years ago, has been in TAMID for one semester at USC. Unlike his classes, which focus on the U.S. market, TAMID meetings give him the opportunity to understand what’s happening in the Israeli business world. 

“Other than being a platform for students to learn about Israel, it’s also about understanding a little bit about what Israel is like, and why it’s such a pioneer in the technology field,” he said. “The group of people we have now is swell. They make our weekly meetings fun. We share everything from how our weeks were to our opinions on Israel.” 

Jared Fleitman, co-founder of USC’s TAMID program and current president, said his time spent with the group has been the most enriching he’s had at USC.

“I’ve met more contacts through developing the curriculum than through any of my coursework,” said Fleitman, who is majoring in mechanical engineering, economics and mathematics. “It’s very useful for me. It’s very positive and I feel like I am part of a special community here.”

Like Fleitman, Lavian said that he has learned more from the practical experience gained through TAMID than he ever did in a classroom. 

“Some things are really hard to learn in a classroom setting,” he said. “You need to get your hands dirty and your feet wet and do some hands-on learning. That’s exactly what TAMID does.” 

As Israel’s economy grows, more Israelis are giving to charity

At Hadassah's centennial celebration in October, 2,000 guests heard about two major philanthropic projects being undertaken by the women's Zionist group: a new tower and a new cardiovascular wellness center at its Jerusalem hospitals.

The tower, which was dedicated at the centennial, cost $363 million. And a $10 million gift from American philanthropist Irene Pollin came with the announcement of the cardiovascular center. Most of Hadassah’s members and donors are American, and every year most of its $100 million budget goes to Israel — as it has for a century, well before Israel was a state.

For virtually all of Israel's history, the philanthropic highway between the United States and the Jewish state ran in one direction. Now, with the growth of Israel's economy and an expanding class of affluent citizens, Israeli initiatives have begun to encourage giving by Israelis for Israelis.

Still, experts say, building a culture of philanthropy remains an uphill battle in Israel.

“Israeli philanthropy is not very well developed, even though there’s [been] a lot of Israeli wealth in the past 10 to 20 years,” said Debra London, project manager for Sheatufim, which helps donors and nonprofits become more effective. “It’s about recruiting them to the idea that they have to give.”

Since well before the founding of the state, American Jewish philanthropy has been instrumental in establishing and sustaining Jewish settlement in Israel. This funding model persisted even as the state established itself and grew into a thriving industrial and information-age economy. American donors still fund many projects and organizations in Israel, while many Israeli outfits have established fundraising arms in the United States.

On the whole, Israelis are less philanthropic than Americans. In a recent paper, Hebrew University professor Hillel Schmid found that in 2009 Israeli philanthropy constituted 0.74 percent of Israel’s GDP, compared to 2.1 percent in the United States. In total that year, Israelis donated $3 billion. Part of the reason, Schmid says, is the high income tax that Israelis have pai d traditionally to support a robust social safety net. Many Israelis also feel that their years spent in compulsory military service provided a significant contribution to the state.

“We all go to the army, we pay a high income tax, so we think we give a lot,” Schmid, the director of the Center for the Study of Philanthropy in Israel, told JTA. “There are a few good philanthropists, but there’s no movement of philanthropy.”

That’s changing. Schmid noted that in 2009, Israeli nonprofits received a majority of their donations from Israelis, not from abroad — a departure from previous years.

New philanthropic models are emerging, too. An organization called Takdim in the coastal town of Ramat HaSharom hopes to duplicate the successful North American Jewish federation model, where one central institution in each community manages collective Jewish giving. More than two-thirds of the funds raised by Takdim will go to projects in the central Israeli city, while 30 percent will fund projects across the country. A communal board will determine which projects to support.

“We need to have a change in outlook and show people that if they want to help the community, they need to help in both senses, to volunteer and to help financially,” said Revital Itach, Takdim’s project manager. “Our goal is not to depend on two or three donors but to draft the whole community.”

Founded a year-and-a-half ago, Takdim has 120 donors and is embarking on its first major fundraising drive. Itach hopes to raise $256,000, much of which will go to building a new park that will be accessible to disabled children.

“There was a sense of community” years ago, Itach said. “As the city grew and brought more people in, the feeling of community got weaker. There was a desire to bring back that feeling of togetherness, to look beyond your own sphere and to do something for all of the residents.”

Another initiative, called Committed to Give and run by Sheatufim, aims to expand the top echelon of Israeli donors, defined as those who give more than $64,000 annually. London estimates that 10,000 Israelis can give that amount. Twenty donors who already give that much are running the initiative.

A rise in Israeli philanthropy does not necessarily mean a drop in U.S. Jewish giving, says Becky Caspi, director general of the Jewish Federations of North America’s Israel office. Caspi recognizes an emotional drive in American Jews to help Israel and does not anticipate a significant decline in donations to Israel.

Federations have been involved in helping launch Takdim and Committed to Give, and Caspi sees a growing number of Israelis “who can assist in carrying the burden to care for the most vulnerable in Israeli society.”

“There are so many people who see Israel hurting and want to help,” she told JTA. “When Israeli philanthropists are exposed to that strength and resilience, it’s a source of inspiration.”

In 2011, JFNA allocated $237 million to overseas funding, the bulk of which goes to Israel. It was a decrease from previous years: In 2010, $249 million went overseas from JFNA, while the figure was $258 million in 2009.

While Israel’s philanthropic culture is still growing, the country does have an established volunteer culture. Yoram Sagi Zaks, chairman of Israel’s national volunteering council, estimates that 46 percent of Israeli youth volunteer in some capacity, and that 800,000 Israelis volunteer in total. Many draw on their military experience to volunteer with security institutions, like the police force.

While Sagi Zaks appreciates rising philanthropy in Israel, he hopes that it doesn’t replace the culture of volunteerism.

“There’s a trend that more people are giving money because they can, and that needs to rise in all sectors of society,” he said. But, Sagi Zaks added, “It’s easier to give a monetary donation. A donation of yourself connects you to society.”

Israel’s middle class increasingly squeezed

At Israeli weddings, gifts of china, silver and art are not welcome. Guests are expected to bring their checkbooks and contribute to a young couple’s purchase of their first home, often bought with substantial help from the newlyweds’ parents.

But a new report shows that only 65 percent of young couples in their 20s and 30s are able to buy a home, as compared with over 80 percent a decade ago.

These statistics are part of the State of the Nation Report 2011- 2012 published by the Taub Center for Social Policy Studies in Israel, which examines various aspects of Israel’s economy.

Director Dan Ben-David finds disturbing trends in Israel’s economy. “We are the ‘start-up nation’ with world-class universities, yet our productivity is falling further and further behind Western countries,” Ben-David told The Media Line.

While overall unemployment in Israel is relatively low, and employment rates among young and middle-aged Israeli men is much lower than in leading Western countries, tens of thousands of Orthodox yeshiva students receive government stipends for studying full-time instead of working.

Israel also has a lot of debt. The Taub Center found that the interest the country pays on its debt was more than its entire education budget last year, and double its health budget.

One bright sign is Israel’s national health care system. Almost all Israelis are members of one of four HMO’s and pay a percentage of their taxes for health insurance. Israeli Jews have one of the highest life expectancies in the world. However the report found that the number of hospital beds in Israel is continuing to drop, and is less than half the Western average.

The report also found that the government’s share of total health care spending in Israel has fallen, while private spending has risen.

“In essence, separate health care systems for the rich and for the poor have developed,” the report found.

Transportation is another problem. The congestion on Israel’s roads is 2.5 times higher than the Western average, although the number of cars per capita is much lower. Even though Israel has begun spending more money on its transportation infrastructure recently, traffic jams have gotten almost unbearable during rush hour.

But it is the plight of Israel’s middle class that economists find most disturbing.

Paul Rivlin, a professor of economics at Tel Aviv University, says the middle class is being squeezed all over the world. In Israel, he says, monopolies control important aspects of life.

“There is only one supplier of land because the State of Israel owns practically all of the land,” he told The Media Line. “There is only one supplier of cement. The food we buy is overwhelmingly sold or made or imported by monopolistic organizations that engage in price gouging.”

In the summer of 2011, socioeconomic demonstrations dubbed the “cottage cheese protests” swept the Jewish state. Hundreds of thousands, including Rivlin, went into the streets demanding lower food prices. Many items manufactured in Israel cost less when purchased abroad.

After those protests, prices of many commodities went down although they have crept up again over the past year. Rivlin says economic issues have often taken a back seat in Israel.

“The amount of time you can concentrate on social issues is limited because of security issues,” Rivlin said.

Taxes in Israel are also high, the income tax ranging from 10 percent to a whopping 48 percent.

“There have been some tax reforms that have benefited the bottom and the top, but the middle class still gets hit,” Rivlin says. “As you move up with moderate increases in income, you get pushed up into higher tax rates.”

“We are falling further and further behind in living standards and if we don’t do something soon, fewer Israelis will stay here,” Ben-David told The Media Line. “We are on some long-term social and economic trajectories that are simply unsustainable in the long run.”

Economic costs of Gaza fighting

Last Friday, Moshe Ahituv (not his real name) received another call-up from the Israeli army. A captain in the home front command, he had already completed 43 days of army reserve service this year.

Moshe, 40, is an English teacher and the father of two toddlers. His wife is a physical therapist and they are about to purchase their first apartment in Jerusalem. He says the emotional cost of the fighting in the Gaza Strip has already taken a toll.

“The kids aren’t sleeping well, and my three-year-old daughter is behaving badly at nursery school,” he told The Media Line. “It’s also frustrating for me. I spend a lot of time on buses getting from home to my base. I could be home with the kids then or working to bring home money to my family.”

There is also an economic toll. While the government will pay for his missed days at work, he will not receive compensation for the private tutoring hours he has been forced to cancel, which amounts to $400 per week.

Israelis and Palestinians are paying a heavy economic price for the cross-border fighting in Gaza. From orange trees in Gaza damaged during an Israeli airstrike to small restaurants in southern Israel who have no customers, to tourists cancelling trips to Israel and Bethlehem, to destroyed buildings in Gaza, the economic costs on both sides is astronomical.

The business information company IDI estimates the fighting in Gaza will cost the Israeli economy $75 million dollars per day in lost productivity. Many small businesses in southern Israel, in particular, are suffering.

“Usually on the weekends we are full, but this past weekend we had just two tables – both of journalists,” Elad Zaritsky, 35, the owner of Linda, a bistro restaurant in the Mediterranean coastal city of Ashqelon, told The Media Line. “We’ve already lost thousands of dollars and we simply can’t continue like this. If the fighting continues much longer, we may have to close.”

Zaritsky says small businesses like his operate with only a narrow profit margin. He says the restaurant has been open for five years. Four years ago, during Cast Lead, Israel’s last major ground operation in Gaza, his business also suffered. The government did give him compensation, but he says it did not nearly cover his losses.

Tourism in Israel is also beginning to suffer, although this is the low season for tourism, between the Jewish holidays of the fall; and Chanuka and Christmas in a few weeks.

“Incoming groups for the near future are down 10 percent and individual bookings are down 15 percent,” Ami Etgar, the general director of the Israel Incoming Tour Operator Association told The Media Line. “But groups that are already here have not left.”

Across the border, inside Gaza, life has virtually come to a standstill. While most residents keep a stock of food supplies including flour, oil, sugar and tea in their homes, most shops and businesses remain closed.

“Banks are closed and ATM machines are running out of cash,” Azzam Shawwa, the general manager of the Quds Bank told The Media Line. “But who wants to risk going out when there are airstrikes?”

Shawwa said there is also concern about the electricity supply to Gaza. While Israel has continued to provide power to the 1.7 million Palestinians in Gaza, the electricity must go through transformers to change the voltage. Some of those transformers have been destroyed in Israeli airstrikes, and the spare ones are already being used, he said.

“Even before this, some places only had electricity for 12 hours a day,” Omar Shaaban, an economist at Palthink, a Gaza-based think tank told The Media Line. “Now some places only have electricity for six hours a day. Some of us have generators, but there is a shortage of fuel for the generators. I just turned my generator on to answer some emails, but I’m going to have to turn it off soon.”

Shaaban says it’s too early to assess the economic damage caused by the Israeli airstrikes, which have killed at least 95 Palestinians and wounded hundreds. Dozens of buildings in Gaza have been completely destroyed.

“Our economy is losing at least $2 million dollars per day,” Shaaban said. “And that’s in addition to the agricultural sector which has already lost $25 million dollars. The economy has been completely suspended. Agricultural products were supposed to be exported this week from Gaza, but now that didn’t happen.”

Back across the border in Israel, more people seem to be staying home, even in areas that have been relatively free of missile strikes.

“There are many fewer passengers going from Tel Aviv to Jerusalem,” Raof Basila, an Arab citizen of Israel who drives a shared-taxi between the two cities. His colleague, Fadi Abu Katish, agrees. He told The Media Line that while fifty drivers normally transport more than 1,500 passengers each day, the drivers are now alone in their vehicles.

Basila added a pensive note. “People are afraid to go out,” he said. “It is not good for either side. Both sides need peace.”

Five challenges facing the American pro-Israel community in the next four years

The American pro-Israel community has a lot of work to do. While many pro-Israel organizations in the United States, including AIPAC, Christians United for Israel, Stand with US and Hasbara have been extremely effective in defending the Jewish State, there is always more we can do. Here is a list of the five greatest challenges facing the American pro-Israel community in the next four years.

The University

Unfortunately, the place where we send our children to grow up and obtain wisdom, the university, is the hotbed of anti-Semitism and anti-Israel sentiment in America. Who can forget the exchange between David Horowitz and an anti-Israel student at UC San Diego a couple years ago? Mr. Horowitz asked her, “I’m a Jew. The head of Hezbollah has said that he hopes that we will gather in Israel so he doesn’t have to hunt us down globally. [Are you] for it or against it?” The student answered “For it.”

Incitement against Jews and Israel at the university is not unusual at the hate-fest known as “Israel Apartheid Week,” where anti-Semites are invited to rail against the Jewish State. At one event at UC Irvine, Imam Amir -Abdel Malik-Ali—who has called Jews “the new Nazis”— blamed the financial crisis on “Alan Greenspan, Zionist Jew, Geithner, Zionist Jew, Larry Summers, Zionist Jew.” A few years ago, after visiting several universities in the U.S., Palestinian journalist Khaled Abu Toameh described what he observed: “I discovered that there is more sympathy for Hamas there than there is in Ramallah…What is happening on the U.S. campuses is not about supporting the Palestinians as much as it is about promoting hatred for the Jewish state. It is not really about ending the ‘occupation’ as much as it is about ending the existence of Israel.”

Up against such hate and propaganda, the pro-Israel community must fight back. The Horowitz Freedom Center has been very effective, launching important counterattacks like Islamic Apartheid Week and the Wall of Truth, which expose the hateful lies and hypocrisy of Israel’s enemies. The Jewish community must continue to give money to on-campus Israel advocacy organizations, and we must all redouble our efforts to make sure that Israel is adequately defended and promoted at American universities.

The Fringe of American politics

Thank God a majority of elected representatives in both parties strongly support the State of Israel. These members must make sure that the views at the fringe of their parties do not become mainstream. The Republican Party must guard against the likes of Ron and Rand Paul, who would like to see America pull back from the world stage and cease its support for Israel. Fortunately, this movement does not seem to be gaining steam, as every poll shows that the Republican Party overwhelmingly supports Israel.

Unfortunately, however, any serious reflection by pro-Israel Democrats must conclude that there is a problem within their leftwing ranks. Though most pieces of pro-Israel legislation overwhelmingly pass both Houses of Congress, those who abstain or vote in the negative are disproportionately Democrats. In 2009, the House passed a resolution condemning the Goldstone report–which had accused Israel of war crimes—by a vote of 344 to 36. 33 of the 36 who voted against the resolution were Democrats. In 2010, 333 members of the House signed onto a letter re-pledging their support for the American-Israel relationship. 7 Republicans and 91 Democrats withheld their signatures. Furthermore, according to a recent Gallup Poll question–“Are your sympathies more with the Israelis or more with the Palestinians?”—78% of Republicans and 53% of Democrats answered Israel. This poll was reaffirmed when at least half the Democratic delegates to their convention in August expressed their disapproval of Jerusalem being recognized as the capital of Israel.

I am not writing this to score political points for Republicans, but to reveal a real problem within the Democratic ranks. This is so disappointing, because the liberal case for Israel is such a compelling one. Israel treats its minorities better than any other country in the Middle East—out of the 120 member Israeli Knesset, 16 are not Jewish. During its short existence, Israel has welcomed millions of immigrants from all over the world, including Africa and Russia. Israel has a very liberal supreme court, which routinely places restrictions on its military in times of war. Israel is also leading the way with game changing green innovations that will reduce CO2 emissions. In addition, Tel Aviv annually hosts a gay pride parade! What other country in the Middle East would be so inclusive?

American Jewish liberals must do a better job of making this case forcefully and passionately to their Democratic allies.


Jews shouldn’t be ashamed to say that support for Israel ranks among their most important political priorities. If it doesn’t, then there is a problem.

According to an American Jewish Committee survey, when asked what political issue was most important to them, 4.5% of American Jews said U.S- Israeli relations, and a paltry 1.3% said Iran’s nuclear program. This is very troubling. If American Jews don’t care enough about Israel’s survival, and preventing Iran from obtaining nuclear weapons, then who will?

Jews in America clearly underestimate how important a strong and prosperous Israel is to the collective Jewish psyche. After all, the welfare of Israel is not disconnected from that of American Jews. If something terrible were to happen to Israel, or should there be a mass migration of Jews out of Israel, the status of the Diaspora would be negatively impacted forever, including in the United States.

A strong Israel with a strong military also serves as a deterrent against terrorist attacks against Jews all over the world. Furthermore, a strong Israel is in America’s national self-interest, as Israel is on the front line in the war against radical Islam.

Using these arguments, the pro-Israel community must do a better job of encouraging our friends and family to become more politically active, in order to promote a strong American- Israel relationship.

Iran and the Economy

America has been mired in an economic crisis since 2008. As such, American citizens and its elected representatives have been almost single mindedly focused on improving the economy. The race for the Presidency has largely been defined by whom could best promote a strong economy, even though the most important Constitutional powers of the President reside in the realm of foreign policy. This is understandable. However, it is up to those in the pro-Israel community to ensure that preventing Iran—which is led by a fanatic who denies the holocaust and wishes to wipe Israel from the earth–from obtaining a nuclear capability is not overlooked.

Unfortunately, this issue has not been addressed adequately to date. Though tough sanctions have been passed against Iran, it continues to spin its centrifuges. We in the pro-Israel community must insist that a credible American military threat be understood by Iran as a reality. This is the only way they will peacefully give up their nuclear weapons program.

To this end, we must write letters to our Congressmen, join pro-Israel organizations like AIPAC, give money to pro-Israel causes, and encourage our friends and family to do the same.

Israeli Delegitimization

The BDS (Boycott, Divestment and Sanctions) campaign—which encourages people to refrain from doing business with Israeli companies and universities –was launched against Israel several years ago. The campaign is meant to portray Israel in the same light as apartheid South Africa, a country that institutionalized segregation. Of course, this is complete nonsense, as more than one million non-Jews in Israel enjoy the same rights as Jews.  Furthermore, as cited above, there are 16 non-Jews serving in the Israeli Knesset.

Many college professors and pop music figures in America have embraced this campaign. Roger Waters, the former lead singer of Pink Floyd, is spearheading it. He refuses to perform in Israel and is encouraging his musical cohorts to join him. The Pixies, Elvis Costello, The Gorillaz and Carlos Santana have followed his lead, and have all canceled their scheduled performances in Israel. Famed American actress, Meg Ryan, refused to attend an Israeli film festival, because of what she viewed as Israel’s indefensible actions in response to the Gaza flotilla.

This is deplorable. The pro-Israel community must make it known that boycotting the only Jewish State will not go unnoticed. It is one thing to criticize Israel, which, in proportion and without demonizing, is acceptable. However, it is totally unacceptable to try to destroy Israel economically, which is the BDS campaign’s primary goal.

The pro-Israel community should not support those who engage in the BDS campaign; don’t buy their CDs, don’t go to their shows, and encourage your friends and family to do the same.

Foreign policy: In favor of Romney

[Related: In favor of Obama]

Mitt Romney likes to recount a conversation he had with Shimon Peres, the president of Israel, back when he was governor of Massachusetts. Peres told him that “America is unique in the history of the world for its willingness to sacrifice so many lives of its precious sons and daughters for liberty, not solely for itself but also for its friends.” What Peres said has been echoed by Gen. Colin Powell, who once remarked that the only land the United States ever asked for at the end of a war was enough to bury our dead.

American foreign policy is indeed unique, and it is our commitment to liberty — more, even, than our military might — that has made us the leader of the free world. Unfortunately, over the last four years, the character of our role in the world has changed, and not for the better.

We are failing to meet some serious challenges. 

In the Middle East, the Arab Spring has given way to an Arab Winter. Iran is racing to acquire nuclear capability. Syria is slaughtering its citizens by the thousands in a bloody civil war that shows no signs of abating. Our ambassador to Libya has been murdered, our embassies stormed by protesters chanting Islamist propaganda and bearing the black flags of al-Qaeda. Meanwhile, the Chinese are ramping up military production while intimidating their neighbors, and the Russians are bullying our allies in Eastern Europe and stymying our efforts in the U.N. to contain Iran. 

Some have suggested that the time of American hegemony on the world stage has simply come to an end. We no longer wield the influence we once held, and with our stagnant economy, we are in no position to reclaim it. 

President Obama has governed as if this were the case. He has sought to engage Iran’s ayatollahs without preconditions and declined to support the green revolution that erupted in the streets of Iranian cities in 2009. His choices did little more than give Tehran more time to pursue the atomic bomb. He has pursued a reset with Russia, one that involved a betrayal of our allies in Poland and the Czech Republic on the critical issue of missile defense. 

Although President Obama has demonstrated remarkable “flexibility” with America’s adversaries, he has kept some of our allies, particularly Israel, at arm’s length. The president has sought to put “daylight” between the two countries. He has refused to meet with Benjamin Netanyahu. He has been caught on an open microphone insulting the prime minister, and he refuses to call Jerusalem the capital of Israel. 

These failures of President Obama on the world stage are not only failures of policy; they are failures of leadership. In fact, some of President Obama’s positions are not all that different from those of his harshest critics. The problem is that his words are seldom backed up by action. Our foreign adversaries neither fear nor respect him. Thus, President Obama loudly declares that Iran must not acquire a nuclear weapon, and the ayatollahs greet his declaration with a shrug as they accelerate their nuclear program. The Chinese continue to cheat on trade with no fear of repercussions. The Russians block our efforts to end the slaughter in Syria without a second thought. The list goes on. 

This points to one of the more significant differences between Mitt Romney and Barack Obama. Mitt Romney has an unbroken track record of carrying out his promises. No one will doubt a President Romney when he says that he has Israel’s back. Tehran will not doubt America’s resolve to stop it from gaining a nuclear capability. With a firm American policy, the days of Bashar al-Assad will be numbered. Governments around the Middle East will know that if our embassies are attacked and our personnel killed, they will suffer consequences. Certainly American taxpayer dollars will not continue to flow to governments that undermine us. 

Most importantly, Mitt Romney will restore the sinews of American strength. We cannot maintain a strong position on the world stage with an economy mired in stagnation. Mitt Romney has a comprehensive plan to put our country back on the path of economic growth and create jobs for all who seek them. 

Similarly, we cannot maintain a military commensurate with our stature if we fail to repair our economy. As things stand, President Obama has already cut $500 billion from our armed forces, and even deeper cuts are on the way. Mitt Romney understands that we must reverse these cuts, that weakness invites aggression, and that if we are to stand by our allies in the Middle East and around the world, we need the forces to back up our words. 

Mitt Romney also understands that American power is much more than our combined economic and military might. Rather, the power of our ideas, of our principles, our commitment to human liberty, is what has made us so influential around the world. If we are to retain our influence, we cannot bend from our principles. We must stand up for our ideas, and for those around the world who share them. 

American leadership is needed now more than ever. And if we are to make our foreign-policy goals a reality, we need a president who has the strength of conviction to follow through on his words. We haven’t had that these last four years. It is time that we did. Mitt Romney is the leader we need in this moment of opportunity and danger.

U.S. should heed call for a clear Iranian red line

Israeli Prime Minister Benjamin Netanyahu made a persuasive case at the United Nations General Assembly Thursday for a clear red line to ward off Iran’s nuclear weapons program. Time is running out and the United States should listen to the Israeli leader and draw a clear line for Tehran.
Prime Minister Netanyahu clearly showed he was willing to draw the line on Iran’s enriched uranium production and put the focus on President Obama’s refusal to do that so far.
“At stake is the future of the world,” Netanyahu said. “Nothing could imperil our common future more than arming Iran with nuclear weapons.
“Just imagine their long-range missiles tipped with nuclear warheads, their terror networks armed with atomic bombs. Who among you would feel safe in the Middle East? Who would be safe in Europe? Who would be safe in America?  Who would be safe any where?”
The Prime Minister said that Iran had completed the first phase of its uranium enrichment program, which took several years, but that the second phase would be completed by spring or summer of next year. The third and final phase, he said, would take only months or even weeks, giving Iran enough highly enriched uranium for its first nuclear weapon.
Netanyahu said the world had to draw a line and take military action if Iran reached the end of the second phase. 
“The red line must be drawn on Iran’s nuclear enrichment program because these enrichment facilities are the only nuclear installations that we can definitely see and credibly target,” he said.  “I believe that faced with a clear red line, Iran will back down.”
So without saying so explicitly, Israel’s prime minister implied that Israel would not act unilaterally with a military response until Iran reached the red line he outlined and would give diplomacy and sanctions until next year, after U.S. elections, to force Iran to change course.
In his own address to the U.N. Tuesday, President Obama acknowledged the seriousness of the Iranian nuclear program.
“Make no mistake, a nuclear armed Iran is not a challenge that can be contained,” the President said. “It would threaten the elimination of Israel, the security of Gulf nations and the stability of the global economy. It risks triggering a nuclear arms race in the region and the unraveling of the non-proliferation treaty. That is why a coalition of countries is holding the Iranian government accountable. And that is why the United States will do what we must to prevent Iran from obtaining a nuclear weapon.”
But the President did not spell out what doing “what we must” entails or what point in the Iranian nuclear program the United States might take military action to stop it. 
The President continues to put too much reliance on diplomacy and sanctions. Congress has insisted on increasingly harsh sanctions on Iran, often in the face of stiff opposition from the Obama Administration. 
Even the strongest sanctions will not make a difference if the Administration doesn’t strictly and universally enforce them.  As has been widely reported, the Administration has routinely exempted allies and important trading partners from compliance. And as Andrew Davenport and Ilan Berman said in their Washington Post column Thursday, the current U.S. sanctions policy is “simultaneously extensive and flimsy.”  In only a few cases have violators faced sanctions.
Despite their weaknesses, the current U.S. and European Union sanctions have impacted the Iranian economy. Iran’s oil exports have declined by more than 50 percent in the past year and bread, meat and electricity prices have soared. But the Mullahs in Tehran are willing to sacrifice the well-being of Iranians while putting more and more of their nation’s resources into their nuclear program.
After declining the opportunity to meet with Netanyahu at the U.N., the President and the Prime Minister spoke by telephone Friday. While a White House statement said both men agreed on the goal of stopping Iran’s nuclear weapons program, no mention was made of any progress toward resolving the disagreement between Israel and the U.S. on issuing an ultimatum to Tehran.
It’s clear the current U.S. position has not slowed Iranian progress toward nuclear weapons capability. In fact, publicly available reports by the U.N. International Atomic Energy Agency (IAEA) document that Iran has accelerated its uranium enrichment program. The IAEA reports that Iran doubled the number of centrifuges at Qom used for that effort in just this year.
It’s also clear that Iran is trying to cut the time to reach what Israel’s Defense Minister Ehud Barark calls the “zone of immunity,” where Tehran is close enough to having a weapon that it becomes immune from attack for fear of nuclear retaliation.
Diplomacy and sanctions should always be the first choice. But all of the diplomacy, all of the sanctions against Iran so far, have not slowed Iran’s program. The lack of a credible red line unfortunately has given Iran the time it needs to reach its nuclear goals. And it has been viewed by the Iranians as a sign of U.S. weakness.
The United States cannot allow Iran to threaten the world. Iran cannot reach a “zone of immunity.”  There has to be a deadline. The U.S. should join Israel in declaring a clear, unambiguous red line for Iran that must not be crossed. Such clarity is the best way to avoid war.
Republican Rep. Elton Gallegly represents Ventura and Santa Barbara counties in Congress and is vice chairman of the House Foreign Affairs Committee and chairman of the House Judiciary Subcommittee on Immigration Policy and Enforcement. He served on the House Permanent Select Committee on Intelligence from 2003-2011.

Palestinian money woes

Could the Palestinian Authority’s budget woes end up costing Israel?

Growing economic protests in the West Bank could lead to increased regional instability and perhaps even the end of the Palestinian Authority, experts are warning. At this point, however, they say the protests are unlikely to result in an eruption of violence against Israel.

The recent unrest began in response to the rising cost of living in Palestinian cities, as well as to a delay in paying PA employees. Thousands of protesters in Nablus and Hebron burned tires and threw stones on Sept. 10, injuring 50 people.

The PA Cabinet responded by paying employees half of their August salaries, cutting spending and lowering taxes. And on Sept. 11, Israeli Prime Minister Benjamin Netanyahu announced the transfer of an advance of about $65 million to the PA. 

“We are working on several fronts in order to help the Palestinian Authority cope with its economic problems,” Netanyahu said in a statement on Sept. 11. “We have made several changes in the taxation agreements. We are advancing certain transfers. We have also helped with Palestinian workers and with a series of other steps in order to make things easier for them.”

In 2009, in his policy address at Bar-Ilan University, Netanyahu had called “upon the leaders of the Arab countries to join together with the Palestinians and with us to promote economic peace. Economic peace is not a substitute for peace, but it is a very important component in achieving it.”

The PA crisis began in earnest in July, when an aid shortfall caused by regional instability and a bad global economy threatened to leave it without enough money to pay that month’s salaries. Even after a $100-million Saudi loan closed the PA budget gap, the authority received harsh criticism from the World Bank. In a July 25 report, the World Bank noted, “While the Palestinian Authority has had considerable success in building the institutions of a future state, it has made less progress in developing a sustainable economic base.”

With protests expected to flare up again next week, economics experts say that Israel and the international community must do more to keep the Palestinian Authority afloat. They are particularly concerned about the shortfall in the Palestinian Authority’s budget, which relies heavily on international aid.

“If the Palestinian Authority is not going to get support from donors, it will not be able to survive six months from now,” said Samir Abdullah, the director general of the Palestine Economic Policy Research Institute.

PA Prime Minister Salam Fayyad, seen as an architect of the Palestinian economy, has been a target of the protests, but PA President Mahmoud Abbas has stuck by his side. Abdullah says that if Fayyad were to resign, that would undermine the PA’s relationship with its donors. “He’s not going to resign,” Abdullah said. “He’s a good fighter, and he can’t leave this to others who have very little experience and very little knowledge of how to have relations with donors.”

Ibrahim Azizeh, the Palestinian project manager for the Joint Palestinian-Israeli-International Economic Working Group, says donations are not a long-term solution.

“They should invest instead of lending money and giving money away,” he said of the international community. “They should be the ones employing.”

Dan Goldenblatt, the co-CEO of the Israel-Palestine Center for Research and Information, said that responsibility for solving the crisis lies with Israel as well as the international community. He called for amending the 1994 Paris Protocol, which governs economic relations between Israel and the PA. Under the protocol, Israel collects taxes for the authority and then transfers the money. The PA’s tax rates also cannot deviate significantly from Israel’s.

“There is consensus that it was more beneficial to Israel than to the Palestinians,” he said of the Protocol. “Hope that it would be temporary put pressure on the sides to sign.” Goldenblatt also called for renewed negotiations between Israel and the PA The two sides have not negotiated directly since 2010.

An Israeli official who insisted on anonymity said that blaming Israel for the PA economic crisis was “ridiculous.” He noted Israel’s recent $65-million transfer to the PA and added that in July, the PA and Israel agreed on an arrangement to crack down on tax evasion and to facilitate movement of goods from Israel to the West Bank.

Abdullah and Goldenblatt fault Israel’s West Bank policies, but neither sees this round of Palestinian popular unrest leading to violence against Israel. Goldenblatt said that a third intifada, following the first two in the late 1980s and early 2000s, is not “something that a vast majority of the Palestinians are even considering.”

Nor, Azizeh says, should Israel worry that Hamas — the terrorist organization that governs the Gaza strip — will step in to solve the PA’s financial difficulties, because Hamas lacks the international recognition needed to facilitate economic development.

Moreover, reports have surfaced recently that Hamas is considering declaring the Gaza Strip independent and severing its ties with the PA-controlled West Bank. Senior Hamas officials have denied these reports.

But even if Israel need not worry now about a violent uprising, Abdullah said that it should not feel isolated from the unrest either.

“These protests will turn against the real cause of the plight of the Palestinians,” he said. “One day, maybe not tomorrow or next week, it will turn against the Israeli occupation.”

Israel transfers money to PA to ease economic crisis

Israeli Prime Minister Benjamin Netanyahu ordered the transfer of some $63 million to the Palestinian Authority to help ease its economic crisis.

The transfer Tuesday evening came after Netanyahu consulted on the issue with Finance Minister Yuval Steinitz, and then asked his special envoy, Isaac Molho, to coordinate with the Palestinian leadership, according to a statement from the Prime Minister's Office.

The money is an advance on tax revenues collected for the Palestinian Authority by Israel.

“We are working on several fronts in order to help the Palestinian Authority cope with its economic problems,” Netanyahu said earlier Tuesday during a meeting with Bulgarian Prime Minister Boyko Borissov. “We have made several changes in the taxation agreements. We are advancing certain transfers. We have also helped with Palestinian workers and with a series of other steps in order to make things easier for them.

“Of course, there is a global reality and it is also related to the internal management of every economy, but for our part we are making efforts to help the Palestinian Authority survive this crisis. I hope that they will succeed in doing so; this is in our common interest.”

Palestinians have been staging demonstrations in the streets of the West Bank since last week to protest the extreme economic hardship. The protests turned violent and destructive late Monday, with thousands of protesters burning tires and attacking police in Hebron and Nablus. Protesters also reportedly smashed the windows of the municipal building and a police station in Hebron. Palestinian taxi, truck and bus drivers staged a one-day strike on Monday.

Civil servants did not receive paychecks for the month of August.

Palestinian Authority Prime Minister Salam Fayad announced measures Tuesday to ease the economic hardship, including lowering the value added tax and prices on diesel, gas and kerosene.

Israeli officials are concerned that the unrest over economics and frustration with the Palestinian leadership could turn into a third intifada directed at Israel, Reuters reported.

Palestinian PM responds to unrest with economic program

Palestinian Prime Minister Salam Fayyad, the key target of nine days of socio-economic protests throughout the West Bank, responded on Tuesday to some of the demands that have been prominent during the course of demonstrations that have become increasingly violent in recent days. Calls were heard for Fayyad’s resignation while his effigies burned in the streets. On Tuesday, protests continued as hundreds of government workers demonstrated in front of the prime minister’s office in Ramallah. At the same time, PA security officials fear Hamas is using the unrest to weaken Fatah and the Palestinian Authority in the West Bank.

Fayyad told reporters at his Ramallah office following a cabinet meeting devoted to the spreading unrest that the cabinet decided government workers would receive half of their still-unpaid August salaries by September 12th, with a minimum of NIS2,000 (about $505), and will set the goal of paying the other half within two weeks.

Ministers were also told to reduce their budgets and expenses, with the exception of the health, education and social affairs ministries. The decision included targeting the salaries and expense accounts of PA ministers and senior officials for deductions of 10%. The value-added tax, now 15.5%, will be reduced to 15% at the start of October. The price of diesel fuel, cooking gas and kerosene will revert to August prices as of September 12.

Immediate reaction to the Fayyad measures was mixed, some supporting the first tangible action while arguing the plan failed to go far enough. Hasan Khureisha, a former Palestinian Legislative Council member, said in an interview with Palestinian television that “it is a step on the right direction. The most important measure is the reduction of the senior officials’ high salaries, which I wished to be deducted to 30-40%, and not only 10%, because their salaries are very high.”        

Palestinian businessman Bassem Khoury criticized Fayyad, arguing that the prime minister should have taken the measures before the mass protests began.

Ibrahim Awadallah, who heads the bus syndicate, told The Media Line that Fayyad’s measures, which are “not enough at all,” were intended to derail the protest movement. He vowed to continue the demonstrations until a greater response from the government is forthcoming. According to Awadallah, Palestinian citizens “are demanding more than Fayyad has offered and expect to see fruitful results from Fayyad’s measures. What he brought us [so far] does not reach the minimum expected.”

Awadallah declared Monday’s transit strike that saw 10,500 taxis and 1,000 buses come to a standstill a success because the people conveyed to the government that “we are ready for more escalated protests.” He cites the demands as “the reduction of fuel prices, lowering of the VAT and insurance fees.” Awadallah claims there is no money left for bus owners after spending 85% of income on fuel, the other 15% is not enough to cover the cost of insurance, taxes, development and maintenance.”

Awadallah insisted to The Media Line that the strike is strictly over financial, not political, issues. “For the first time in our history we hear that some Palestinians tried to burn themselves in West Bank cities last week, which is a sign of how much the economic situation has become unbearable.”

One slogan that appeared at rallies was, “Only in Palestine: the expense of living in Paris with the salaries of Somalia.”

Ghassan Khassib, a 38-year old taxi driver from Al-Bireh, told The Media Line that he was surprised by the success of the public transportation strike. “It was 99.9% successful,” he said. “It reminded me of the first Intifada, but it was better organized.”

A senior Palestinian Authority security official who spoke to The Media Line on the condition of anonymity said he has been unable to sleep because of the impact of the financial crisis on his personnel, and calls from West Bank residents asking that their property be protected from demonstrators protesting Fayyad economic policies.

Perhaps more ominously, another official who asked that his name be withheld for reasons of his safety, said Hamas loyalists were seen addressing crowds at rallies while Hebron Fatah leader Kifah Oweiwi told The Media Line that Hamas members were among the throng that attacked a police station where 35 officers were injured by rock-throwing. 

Democrats return to the economy after Jerusalem detour

It was the nuts-and-bolts convention that nearly broke down over the most ethereal of issues: Jerusalem and God.

But by its third and final night, the Democratic National Convention had gotten back on message: jobs, jobs, staying on course with getting the economy back on track, and — oh, yes — jobs.

It was a course correction after two days in which convention organizers — and, in particular, the campaign’s Jewish surrogates — scrambled first to explain how recognizing Jerusalem as Israel’s capital and mentioning God got left out of the party platform, and then hustled to get them back in over the objections of some noisy and unhappy delegates.

The convention in Charlotte, N.C. — like its Republican counterpart, which last week nominated Mitt Romney in Tampa, Fla. — was mostly about the economy.

Foreign policy barely surfaced at either convention, and social issues — while prevalent on the streets outside the Charlotte convention, where protesters on both sides of the abortion debate competed for sidewalk space — were addressed, but not paramount.

Vice President Joe Biden, whose foreign policy experience over decades in the U.S. Senate was made a centerpiece of President Obama’s choice of VP four years ago, barely mentioned foreign policy in his speech Thursday night.

America’s posture overseas was left to two of Thursday’s convention speakers: Sen. John Kerry (D-Mass.), the 2004 nominee who is now a widely touted possibility as secretary of state if Obama wins a second term, and Obama himself.

“Our commitment to Israel’s security must not waver, and neither must our pursuit of peace,” Obama said to applause during a short foreign policy aside in a speech that was otherwise dedicated to staying the course on his plans for economic recovery. “The Iranian government must face a world that stays united against its nuclear ambitions.

Democrats had scrambled to contain an embarrassing breakout after Republicans had seized on the removal of Jerusalem and God from the platform, grabbing headline space Democrats had hoped would contrast the enthusiasm in Charlotte with the relatively subdued Tampa convention.

The language was returned in a quickie session on Wednesday, but that also was not without its awkwardness: the convention chairman, Los Angeles Mayor Antonio Villaraigosa, had to call for three voice votes before declaring a two-thirds majority. But those on the floor said the vote actually was much closer – and there were boos.

Those who objected ranged from Arab Americans who had praised the removal of the Jerusalem language as an acknowledgment of the claims both Palestinians and Israelis have on the city, to religion-state separatists who objected to the God language, to delegates who were outraged at what they saw as a rushed amendment process.

Jewish Democrats, who helped drive the return of the language, depicted the change as Obama’s initiative and a sign of his control over the party.

“The difference between our platform and the Republican platform is that President Obama knows that this is his platform and he wants it to reflect his personal view,” Rep. Debbie Wasserman Schultz (D-Fla.), the Democratic National Committee chairwoman, told CNN after Robert Wexler, a member of the platform draft committee and a chief Jewish surrogate for the Obama campaign, told JTA that Obama directly intervened to make sure the platform was changed.

“President Obama personally believes that Jerusalem is and will remain the capital of Israel,” Wasserman Schultz said.

But that claim was at odds with repeated statements by Obama administration figures in recent months that Jerusalem remains an issue for final-status negotiations — itself the position of a succession of Republican and Democratic presidencies for decades.

Jewish Democrats acknowledged at the outset of the convention that they needed to address perceptions that Obama was distant from Israel before pivoting to the area where they feel Obama far outpaces Romney among Jewish voters — domestic policy.

Kerry, in his speech, cited Prime Minister Benjamin Netanyahu in making the case for Obama’s Israel bona fides.

“Barack Obama promised always to stand with Israel to tighten sanctions on Iran — and take nothing off the table,” Kerry said. “Again and again, the other side has lied about where this president stands and what this president has done. But Prime Minister Netanyahu set the record straight: He said our two countries have 'exactly the same policy … Our security cooperation is unprecedented …' When it comes to Israel, I'll take the word of Israel's prime minister over Mitt Romney any day.”

Yet while the convention was under way, a story broke that underscored the ongoing tensions between the Netanyahu and Obama administrations over how best to keep Iran from obtaining a nuclear weapon.

Netanyahu, a top U.S. lawmaker said, erupted in anger at the U.S. ambassador to Israel over what Israel's government regards as unclear signals from the United States on Iran.

Rep. Mike Rogers (R-Mich.), the chairman of the U.S. House of Representatives Intelligence Committee, described for a Michigan radio station, WJR, an encounter he witnessed last month when he was visiting Israel. The interview was picked up Thursday by the Atlantic magazine.

“It was very, very clear the Israelis had lost their patience with the [Obama] administration,” Rogers said.

Rogers described Israeli frustration at what he depicted as the administration's failure to make clear to Israel or Iran whether and when it will use military force to keep Iran from obtaining a nuclear weapon.

By Thursday, the convention’s message about the economy and the role of government in guaranteeing a social safety net was once again front and center — and among Jewish delegates, who crowded the floor sporting Hebrew Barack Obama buttons.

Cheers erupted when Carol Berman, a retiree from Ohio now living in West Palm Beach, Fla., lauded the president’s health care initiative.

“I'm one of the seniors who retired to this piece of heaven on Earth and I'm as happy as a clam,” Berman said. “It's not just the sunshine; it's Obamacare. I'm getting preventive care for free and my prescription drugs for less.”

Berman’s was the kind of “personal story” that Democrats had urged Jewish advocates to use when they made the case for Obama to the 5-10 percent of Jewish voters they estimate voted for Obama in 2008 and might be reconsidering this year. Wasserman Schultz also shared her personal experience with breast cancer in making the pitch for Obama's health care legislation.

The convention’s most sustained standing ovation was for Gabrielle Giffords, the former Arizona congresswoman recovering from being shot in the head in January 2011. Giffords came to recite the Pledge of Allegiance, walking on her own with a cane and accompanied by a watchful Wasserman Schultz. The two women are close, having bonded as being the first Jewish women elected to Congress from their respective states.

The theme of collective responsibility informed the one rabbinical benediction of the convention, which closed Wednesday night’s events, by Rabbi David Wolpe of Sinai Temple in Los Angeles. Wolpe ad-libbed a Jerusalem reference in his speech, slightly tweaking the prepared remarks delivered to reporters before he spoke.

“You have taught us that we must count on one another, that our country is strong through community, and that the children of Israel — on the way to that sanctified and cherished land, and ultimately to that golden and capital city of Jerusalem — that those children of Israel did not walk through the wilderness alone,” Wolpe said.

Report: Iran war could cost Israel economy $42 billion

Israel’s economy would incur damages of as much as 167 billion shekels ($42 billion) should Israel attack Iran over its nuclear program, business information group BDI-Coface has projected.

Direct economic damage would reach 47 billion shekels, BDI-Coface, a respected research group, said on Tuesday. That would be equivalent to 5.4 percent of Israel’s gross domestic product last year.

Indirect damages would amount to 24 billion shekels a year for three to five years due to the collapse of businesses, it said.

There has been an upsurge in rhetoric from Israeli politicians this month suggesting the country might attack Iran’s nuclear facilities ahead of U.S. presidential elections in November.

Israel, widely believed to be the only atomic power in the Middle East, views Iran’s nuclear program as an existential threat, citing threats made by leaders of Islamist Iran to destroy the Jewish state.

BDI noted that 32 days of war with Lebanon in 2006 led to a 0.5 percent reduction in Israel’s economic growth. Direct costs such as civil property and infrastructure damage cost the economy another 1.3 percent.

“In the event of a war of the same magnitude, duration and damage, it is possible to expect damage of 16 billion shekels,” it said.

The war with Lebanon took place mainly in Israel’s north, which produces just 20 percent of the country’s output.

“It is reasonable to assume that in the event of a war, it would also involve the center of the country, which produces 70 percent of Israel’s economic activity,” BDI said, noting Israel’s gross domestic product was 870 billion shekels in 2011.

Bank of Israel Governor Stanley Fischer warned this month of an economic crisis in the event of a war with Iran.

Prime Minister Benjamin Netanyahu is frustrated that Western diplomacy to try to force Iran to rein in its nuclear program has so far proved fruitless.

Senior Israeli officials have said a final decision about whether to attack Iran has not yet been taken, with the military hierarchy unhappy about the prospect of going it alone without full U.S. backing.

($1 = 4.02 shekels)

Reporting by Steven Scheer; Editing by Susan Fenton

Mitt Romney’s comments aside, the Palestinian economy is tottering

Mitt Romney may have caused a storm of criticism by asserting that “culture makes all the difference” between the success of the Israeli economy and the Palestinians’ economic struggles.

But the near future of the Palestinian economy is even far less rosy than he suggested.

During a speech Sunday in Jerusalem at a closed fundraiser, Romney reportedly credited Israel’s GDP being much higher than that of the Palestinians to “the power of at least culture and a few other things,” including a strong pro-business climate, the travails of overcoming Jewish history’s blows and the “hand of providence.”

The bleak forecast goes beyond Romney’s overestimation of Palestinian per capita gross domestic product of $10,000; it’s actually hovering just above $1,500, according to the Palestinian Central Bureau of Statistics. Not only that but the most recent CIA Factbook estimated Palestinian unemployment at 23.5 percent. By comparison, Israel has a per capita GDP of $31,400 with unemployment at 5.6 percent, according to the Factbook.

Moreover, a Palestinian government financial crisis and political instability likely means that the Palestinian economy “is slowing down after four years of solid growth,” said Samir Abdullah, the director general of the Palestinian Economic Policy Research Institute.

Despite being so low today, Palestinian GDP grew by nearly 10 percent in 2011, according to the Palestinian Statistics Bureau. Overall it leapt forward by more than 7 percent between 2007 and 2011, according to the World Bank. But, Abdullah cautions, two fundamental challenges are bringing those numbers down now: the Palestinian Authority’s ongoing financial crisis and political instability resulting from the Israeli-Palestinian conflict.

Last month the Palestinian Authority faced a budget shortfall that would have rendered it unable to pay employees’ salaries. The PA closed the gap with a $100 million loan from Saudi Arabia, but heavy reliance on foreign donations and low tax returns mean that the PA’s problems remain far from solved.

“There is a lot of aid that should be paid that is not paid,” Abdullah said. He also claimed that the PA owes businesses in the private sector $400 million to $600 million for services, which is taking an additional toll on Palestinian development.

Even after the Saudi loan, the PA received harsh criticism from the World Bank, which noted in a July 25 report that “While the Palestinian Authority has had considerable success in building the institutions of a future state, it has made less progress in developing a sustainable economic base.”

John Nasir, the report’s lead author, said in an accompanying statement that the Palestinian economy “is currently not strong enough to support such a state.”

The report represented a stark departure from one issued last year by the bank saying that the Palestinian Authority was “well positioned for the establishment of a state at any point in the near future.”

Blame for the downturn, according to the newer report, lies with Israel’s occupation of the West Bank, which hinders Palestinian growth with “constraints on movement of people and access to resources.” And, the report continued, the public sector takes up too large a share of Palestinian GDP—27 percent in 2010—as opposed to agriculture or industry.

Abdullah says the PA remains hamstrung in part because Israel has periodically withheld large portions of taxes it collects from Gaza, which is controlled by Hamas, a terrorist organization that aims to destroy Israel. He adds that Israeli settlement expansion “makes the whole situation tense and dangerous.”

Both the World Bank and Abdullah say that Palestinian political and economic “stagnation” have the same cure: an Israeli-Palestinian peace treaty.

“The private sector is in bad shape as a result of political instability coming from the end of the peace process,” Abdullah said. “The political atmosphere remains unpredictable. The private sector is hesitant to invest.”

But there may be signs of hope. Israel and the PA signed an agreement on Tuesday that aims to reduce Palestinian tax evasion and allows the Palestinians to collect some taxes directly. Previously, Israel collected Palestinian taxes and transferred them to the PA.

And while on a smaller scale than Israel, Palestinians have a small, burgeoning high-tech sector. In fact, it has enjoyed a 64 percent increase in foreign business since 2009, according to the Guardian. The industry, the newspaper reported, has more than quintupled as a share of Palestinian GDP from 2008 to 2010, from less than 1 percent to 5 percent.

“This is definitely a very positive element,” Abdullah said. “It will use our human capital, and there will be hope for the future Palestinian economy, which will very much depend on human capital.”

Birthright has contributed $535 million to Israel’s economy

Taglit-Birthright Israel has contributed more than $535 million to Israel’s economy since the trip’s inception in 2000, the organization said.

The contribution to Israel’s tourism industry comes from providing transportation, lodging, food, training, security, entry to tourist sites and air travel during the free 10-day trips to Israel for Jews aged 18 to 26.

Since the beginning of the project, more than 7,100 groups have come to Israel, filling more than 2.2 million hotel beds and traveling around the country for more than 71,000 days in buses. The participants have spent more than $75 million in gift and souvenir shops, according to Taglit-Birthright.

The organization brought groups that boosted the tourism industry during Operation Cast Lead and the Second Lebanon War.

“In addition to achieving our goals of connecting the Jewish youth to Israel and to their communities, strengthening their Jewish identity and creating a network of support for the country through our alumni, the project has had a major impact on our economy and the tourism sector,” said Gidi Mark, the CEO of Taglit-Birthright Israel.

“Not only is the project contributing to the economy and thus providing employment for thousands of Israelis, but it is also an investment in the future. Many of our participants are not satisfied with visiting Israel only once; they fall in love with the country and return for many more visits, and their enthusiasm affects their families and friends who, in turn, decide to visit. In this way, we also create an infrastructure for Jewish tourism in the years ahead.”

More than 17,000 young Jews from 32 countries will be visiting the country during Taglit-Birthright Israel’s winter 2012 season.

Taglit-Birthright Israel receives a major portion of its funding from the Israeli government.

World Bank: Israel hampering Palestinian economy

Israeli restrictions have inhibited what otherwise would have been substantial progress in the Palestinian economy, the World Bank reported.

In a report released Monday and timed for a meeting of the Ad Hoc Liaison Committee for assistance to the Palestinians, a group of wealthy nations that coordinates economic aid for the Palestinians, the World Bank’s Palestine desk said the Palestinian Authority’s two-year effort to build statehood institutions had made “substantial progress.”

“In areas where government effectiveness matters most – security and justice; revenue and expenditure management; economic development; and service delivery – Palestinian public institutions compare favorably to other countries in the region and beyond,” the report said. “These institutions have played a crucial role in enabling the positive economic growth in the West Bank and Gaza in recent years.”

Confounding the progress in part, it said, were Israeli restrictions.

“Though significant, this growth has been unsustainable, driven primarily by donor aid rather than a rebounding private sector, which remains stifled by Israeli restrictions on access to natural resources and markets,” it said. “Ultimately, in order for the Palestinian Authority to sustain the reform momentum and its achievements in institution-building, remaining Israeli restrictions must be lifted. The resulting revival of the private sector can be expected to grow the tax base and gradually reduce dependence on external assistance.”

Israel says it has removed a substantial number of restrictions on Palestinian access by shutting down many of the inspection points it has throughout the West Bank. It maintains the remainder of checkpoints as well as controls along its border with the Gaza Strip to contain terrorist threats.

Cash-strapped Palestinians cut pay in half for September

The Palestinian Authority will pay only half wages this month, Prime Minister Salam Fayyad said on Tuesday, the second time in three months it has taken such a step because of a financial crisis it blames on donors failing to provide promised funds.

Fayyad announced the half pay measure at a cabinet meeting on Tuesday. The Palestinian Authority took the same measure in July. Last month it paid full salaries but said its funding crisis had not been solved.

The Palestinian Authority pays salaries to 150,000 people in the West Bank and the Gaza Strip and monthly allowances to another 75,000 people.

A Palestinian official, speaking on condition of anonymity, said the aid-dependent authority was facing an unprecedented financial squeeze on funding from Arab states which are failing to meet commitments to provide support.

“We do not know why they are imposing this siege on us,” the official said. In recent years, Saudi Arabia and the United Arab Emirates have been the Palestinians’ most generous Arab donors.

The financial crisis has highlighted the fragility of the PA as President Mahmoud Abbas embarks this month on a diplomatic offensive to secure U.N. endorsement for Palestinian statehood—a step opposed by the United States and Israel.

The Palestinians are hoping to secure an upgrade in their status at a United Nations General Assembly meeting in New York.

The leadership has called for popular protests to add weight to the diplomatic initiative. However, the official suggested turnout at such demonstrations could be hurt by the financial crisis.

“People will be concerned with the financial situation,” the official said.

Reporting by Tom Perry and Ali Sawafta

Ireland’s Labor Party eyes Israel for economic inspiration

One of the parties expected to form part of Ireland’s next governing coalition is looking to Israel for economic inspiration.

The left-leaning Labor party, which is second in the polls and expected to be the junior partner in Ireland’s government following the Feb. 25 general election, has said Ireland should follow Israel’s example of technology-led growth and development to help regain the competitiveness it has lost since the dot-com bubble burst a decade ago.

In a policy paper published this week, Labor said Israel was “a clear model to follow” in driving productivity and employment through innovation. The document also pointed out Ireland was falling behind “competitor economies” such as Israel in technology absorption, research and development, and government procurement of advanced technology products.

Ireland and Israel have long seen each other as benchmark economies, as both countries rely heavily on the software, pharmaceutical, biotech and medical devices sectors. Israeli Prime Minister Benjamin Netanyahu modeled his “economic peace” policy partly on Ireland’s experiences in the late 1990s, when rapid growth in the republic underpinned efforts to sign a final Northern Ireland peace treaty.

Labor’s positive economic view of Israel is especially noteworthy, as the party has long been highly critical of Israeli policy in the West Bank and Gaza.

5770 in Israel: Diplomatic crises, but economic prosperity

For Israel, the Jewish year 5770 was characterized by ups and downs in relations with the United States, growing international alienation and a virtual stalemate in Middle East peacemaking—until the summit meeting in Washington just before Rosh Hashanah.

Last November, after months of intense U.S. pressure, Prime Minister Benjamin Netanyahu declared a temporary freeze on new construction building in West Bank settlements—a move designed to create conditions for a renewal of peace talks with the Palestinians. But the freeze was only for 10 months, did not include some 3,000 units already started and did not apply to construction in eastern Jerusalem.

For almost the entire duration of the freeze, the Palestinians, convinced that President Obama would exert even heavier pressure on Israel on the core issues of dispute—borders, Jerusalem, Palestinian refugees and the nature of a future Palestinian state—without their having to negotiate, highlighted the lacunae and rejected calls to return to the peace table.

During that period, special U.S. peace envoy George Mitchell proposed indirect negotiations under U.S. auspices as a compromised. By early March, both sides had agreed to “proximity talks,” with Mitchell shuttling between Jerusalem and Ramallah. U.S. Vice President Joe Biden traveled to the region to announce the breakthrough, but during his visit an Israeli Interior Ministry planning committee approved plans for 1,600 new housing units in Ramat Shlomo, a Jewish neighborhood in Jerusalem on the east side of the pre-1967 border—what most of the world still considers the West Bank.

The move prompted the Palestinians to retract their agreement to participate in proximity talks and infuriated the Obama administration. U.S. officials blamed Israel for what they saw as a deliberate slight calculated to torpedo their peace efforts.

In an angry 43-minute telephone conversation, U.S. Secretary of State Hillary Clinton reprimanded Netanyahu, insisting that Israel freeze the Ramat Shlomo project and agree to discuss all the core issues in the proximity talks. Netanyahu explained that the planning committee’s announcement had taken his government by surprise as much as it had the Americans, made it clear that there would be no building in Ramat Shlomo for at least two years, and agreed to put the core issues on the table.

Parallel to the U.S.-led proximity talks, the Palestinians stepped up unilateral efforts to create a framework for statehood, focusing on law and order, economic viability and institution building. Palestinian Authority Prime Minister Salam Fayyad made no secret of his intention to have “a well-functioning state in just about every facet of activity” by mid-2011, irrespective of whether any peace agreement with Israel had been reached.

After weeks of bickering, the proximity talks finally were launched in early May, after the Palestinians received the go-ahead from the Arab League. Neither side expected to achieve much. It seemed both had agreed primarily to engage to avoid American censure.

With ties strained between Washington and Jerusalem, Obama invited Netanyahu to the White House for a meeting that was to patch up the strains in the relationship and provide a positive image in contrast with an earlier, low-profile meeting in March that included no public component or photo op.

The meeting was delayed several weeks due to Israel’s commando raid aboard a Gaza-bound aid flotilla from Turkey on May 31. But when the two leaders finally met on July 6, the two projected a public display of warmth. The meeting resulted in no new pressure on Israel. Rather, the Americans exhorted the Palestinians to move from proximity talks, which were not making headway, to direct negotiations between the parties—the position favored by Israel.

It took until late August for the Palestinians also to agree, after the Obama administration issued an invitation to the leaders of Israel, the Palestinian Authority, Egypt and Jordan to a summit in Washington at the beginning of September to kick off direct negotiations between Israelis and Palestinians. The goal, the Americans said, was to reach a final-status, conflict-ending agreement within a year. While skeptics predicted the effort was bound to fail, the meeting in early September was punctuated by verbal concessions on both sides. Palestinian Authority President Mahmoud Abbas acknowledged the Israeli need for security, while Netanyahu acknowledged a Palestinian claim to the land of Israel. The two agreed to meet every two weeks to try to hammer out an agreement.

However, with Abbas threatening to bolt the talks unless Netanyahu extended the settlement freeze and Netanyahu refusing to do so, settlement construction loomed as an immediate stumbling block to negotiations.

In parallel with the Palestinian track, Netanyahu continued to press Israel’s nuclear-related concerns. In his July meeting with Obama, the two cleared up earlier tensions over Israel’s presumed nuclear weapons’ program that had emerged in late May, when the United States had backed the final communique of a monthlong Nuclear Non-Proliferation Treaty Review Conference calling for a nuclear-free Middle East and calling specifically on Israel to sign the NPT. In their meeting, Obama assured Netanyahu that despite his long-term vision of a world free of nuclear weapons, the United States would continue to back Israel’s policy of nuclear ambiguity under which Israel does not confirm or deny possession of nuclear weapons or sign the NPT.

Although Israel and the United States were in agreement that Iran must not be allowed to develop nuclear weapons, Israel was skeptical about the international community’s will to take significant action to prevent it. In mid-February, the chairman of the U.S. joint chiefs of staff, Adm. Mike Mullen, came to Israel to underline Washington’s opposition to a pre-emptive Israeli strike on Iran.

“I worry a great deal about the unintended consequences” of an attack against Iran, Mullen said. The prospect of an Israeli strike, however, significantly diminished following the adoption in early June of new, tougher sanctions against Iran by the U.N. Security Council.

Perhaps the year’s most prominent development was a major erosion of Israel’s international standing. The downward trend began with the Goldstone report on the Gaza war, released in September 2009, which accused Israel of possible “war crimes” and “crimes against humanity” in its war with Hamas in Gaza in December 2008 and January 2009.

Although the report was widely dismissed as biased and deeply flawed, the damage to Israel’s image was devastating, and critics of Israel used the Goldstone report to hammer away at its reputation. The Israeli military refuted some of the report’s central accusations, but the perception that Israel used disproportionate force to quell the rocket fire from Gaza remained embedded in international public opinion.

An early manifestation of new boldness among Israel’s European critics came last December, when Swedish Foreign Minister Carl Bildt led an initiative to have the EU recognize East Jerusalem as the capital of a Palestinian state—a move eventually quashed by Israel’s European allies, with France, Germany and the Czech Republic playing dominant roles.

Israel suffered another major PR setback when agents believed to be from the Mossad intelligence agency were accused of using forged foreign passports in the January assassination in Dubai of Mahmoud Mabhouh, a senior Hamas official involved in arms smuggling. Several countries expelled Israeli diplomats. Israel has neither confirmed nor denied its involvement in the assassination.

The year’s worst PR disaster for Israel came in the May 31 flotilla incident: Nine Turkish citizens were killed when Israel intercepted a ship carrying aid material bound for Hamas-controlled Gaza, which was under Israeli blockade. Though Israel released videos showing its soldiers were attacked when they boarded the ship, a worldwide storm of protest erupted. The anger against Israel resulted in the first-ever Israeli commission of inquiry with an international presence and the easing of Israel’s blockade of Gaza.

The main diplomatic casualty of the flotilla affair was Israel’s already strained strategic relationship with Turkey. In 2008, the two countries had been close enough for Ankara to mediate between Israel and Syria. But since the war with Hamas in Gaza, Turkey, a key regional power broker with an Islamist government, had been vehemently critical of Israel while ostensibly moving away from the West and edging closer to Iran.

Relations between Israel and Syria, Iran’s closest ally, oscillated between hopes for a resumption of peace talks and fears of war. French President Nicolas Sarkozy tried his hand at mediation, hosting both Netanyahu and Syrian President Bashar Assad at a multinational conference last November. But the two never met, and by early April Sarkozy had given up, complaining to Israeli President Shimon Peres about Netanyahu’s lack of cooperation.

The Syrians had insisted that Netanyahu first commit to Israeli withdrawal from the Golan Heights as a basis for negotiations, a demand the Israeli prime minister rejected. Tensions flared in early February, with Assad accusing Israel of leading the region into war, and then again in May, with Netanyahu charging that Iran was trying to drag Israel into war with Syria.

Despite Assad’s talk about “strategic” readiness for peace with Israel, the Syrians continued to transfer sophisticated weapons to the Shiite Hezbollah militia in Lebanon. Of particular concern to Israeli military planners was the supply of GPS-guided M-600 missiles, which for the first time gave Hezbollah the capacity to pinpoint specific targets in Israel as far away as Tel Aviv.

Iran also tried to supply Hezbollah by sea. On Nov. 3, 2009, Israeli naval commandos intercepted a cargo of more than 3,000 Iranian-made rockets destined for Hezbollah on the Francop, an Antigua and Barbuda-flagged vessel sailing from the Iranian port of Bandar Abbas.

In the face of the growing threat from the Iranian axis—Iran, Syria, Hezbollah and Hamas—Israel significantly augmented its missile and rocket defenses. In January, the Iron Dome system designed to intercept short-range projectiles passed final tests, and in June Israel launched the Ofek 9 spy satellite, enhancing intelligence gathering over Iran.

Moreover, despite their political differences during the year, Israeli-American defense ties remained strong and intimate. For example, in late October 2009, the two armies jointly tested the interoperability of their highly sophisticated defense systems against incoming ballistic missiles.

And its diplomatic difficulties and strategic challenges nothwithstanding, Israel’s economy prospered, with the most dramatic development the discovery in June of a huge natural gas reserve off the Israeli coast. The field, called Leviathan, is estimated to contain about 15 trillion cubic feet of gas, nearly twice as much as the adjacent Tamar field discovered the year before.

According to Infrastructure Minister Uzi Landau, Israel now has enough gas to supply all its needs “for the next 50 to 70 years.” Experts have described the finds, which could contain as much as one-fifth of America’s known gas reserves or twice that of Britain’s, as a potential geopolitical game-changer.

As a mark of its increasing economic power, Israel was admitted in May to the OECD, which incorporates the world’s most developed nations. Netanyahu described Israel’s admittance as a “seal of approval” that would attract investors.

And despite the continued aftershocks of the international economic crisis, Israel’s economic performance remained robust, with growth of 3.4 percent in the first quarter of 2010 following the 4.4 percent growth of the last quarter of 2009.

Israeli economy surprises with pace of growth

Israeli economic growth unexpectedly accelerated to its fastest pace in more than two years.

Exports and consumer spending increased, helping to sending up growth in the second quarter by an annualized 4.7 percent, Bloomberg reported.

The expansion rate rose from a revised 3.6 percent in the first quarter, the , Jerusalem-based Central Bureau of Statistics said Monday on its website.

The median forecast of six economists surveyed by Bloomberg had predicted growth of 2.9 percent. The statistics bureau reported last month that the economy grew a preliminary 3.4 percent in the first three months.

“This is really an economy running on all pistons,” said Jonathan Katz, a Jerusalem-based economist for HSBC Holdings Plc, who forecast 3.7 percent growth. “Down the road, the Bank of Israel will have to increase interest rates. This is clear to them, clear to everyone, and the pace may surprise many.”

The Israeli economy’s rebound from the global financial crisis has been powered by exports, which make up nearly half of gross domestic product.

Despite diplomas, Ethiopian Israelis can’t find jobs

JERUSALEM (JTA) — Asaf Negat, 29, made his way to Israel from Ethiopia as an 11-year-old boy and worked hard to find his way in a new land and learn to speak a new language. Eventually, Negat graduated with a business degree from one of the country’s top universities.

However, since completing his studies in the summer of 2006, he has not found work in his field. Unemployed, Negat spends his days trolling the Web sites of banks and investment houses, seeking job openings and sending out resumes.

“It’s not exactly a hopeful situation,” said Negat, whose only job since graduation has been as a counselor at an absorption center for newly arrived Ethiopian immigrants. “It makes people like me feel pessimistic, especially when we look at our younger brothers and sisters who see what we are going through.”

Negat is not alone.

Of the approximately 4,500 Ethiopian Israelis who have earned university degrees, fewer than 15 percent have found work in their professions, according to a recent study. Instead, most end up working temporary public-sector jobs serving the Ethiopian Israeli community, remaining disconnected from the larger professional Israeli workforce.

Working in such jobs, which often are project-based and subject to elimination once funding runs out, these Ethiopian Israelis earn less than other college-educated Israelis. Ethiopian Israeli graduates earn an average of $1,375 a month, compared with $1,925 monthly for their Jewish Israeli peers, according to a joint study of the Israeli government and the American Jewish Joint Distribution Committee (JDC).

“On the one hand, one wants Ethiopians with academic degrees to help make changes in the community by working within it, but on the other hand, these jobs are not highly paid, often not very stable and don’t have much potential for promotion,” said Sigal Shelach, director of programs for immigrants and minorities at Tevet, a joint government-JDC-Israel employment initiative. “So there is a kind of vicious circle going on.”

Negat’s easy smile vanishes when he speaks of the challenges of breaking into the ranks of the educated Israeli middle class.

“We are the role model for the younger generation,” he said. “But how are they supposed to react when they go from being encouraged by our studies to watching us finish university, only to return back at home, stuck, with no work?”

It’s hardly the fairy-tale landing into the white-collar Israeli workforce many young Ethiopian Israelis imagine for themselves once they make it beyond a host of obstacles to start their university careers.

However, in Israel, where personal connections and unwritten cultural codes are especially strong, Ethiopian Israeli graduates face a significant disadvantage in finding jobs compared with their native-born peers. For one thing, they are less likely to have the professional network of connections a typical Israeli might have to land a job.

“They think they graduate and that will be it, but most of them don’t have help of where to go and what to look for,” said Danny Admesu, who immigrated to Israel from Ethiopia as a child and now is the director of the Israeli Association for Ethiopian Jews. “Usually in Israeli families relatives work in different fields, they have connections and can give advice. You learn not just in university but by meeting people and parents’ contacts. But these people graduate and then don’t know what to do.”

Furthermore, many Israeli employers rely on assessment centers to screen potential job candidates before granting interviews. Some experts say the centers have unintentional cultural biases — for example, asking questions about aggressive decision-making styles and leadership that Ethiopian Israeli job candidates answer much differently than native-born Israelis.

To address that problem, the JDC is piloting a program for more culturally sensitive screening tests.

Compounding matters, many Ethiopian Israelis come from Israel’s periphery — outside the heavily populated center of the country — where jobs are scarce.

There is also the problem of racism, some say.

“We cannot shut our eyes to it and need to talk about it,” said Ranan Hartman, founder and chair of the Ono Academic College, one of a handful of Israeli institutions trying to address the problems facing Ethiopian Israeli graduates. “If we hide from it, it won’t be solved.”

Hartman said the school’s outreach to Ethiopian Israelis, which is supported in part by the Jewish Agency for Israel, aims to achieve nothing less than a revolution in the Ethiopians’ status in Israeli society.

“How do you inform society to respect the Ethiopian community? You do it by creating islands of excellence, and the success stories can then go and break stigmas,” Hartman said.

The college boasts among its Ethiopian graduates the first Ethiopian diplomat and accountant in Israel.

Now in its second year, the program has provided 200 students and graduates with intensive workshops in job searching, management and leadership skills, connected them with mentors and made high-level connections and introductions to help pave their way to interviews and, hopefully, jobs.

Supported by the Jewish Agency and the UJA-Federation of New York, the program coordinates its efforts with the Interdisciplinary Center at Herzliya and Bank Hapoalim. Yifat Ovadiah, general director of the organization, said its goal is to help place 1,000 Ethiopian graduates in highly sought-after jobs in their fields in the next five to seven years.

“The idea is that 1,000 people can help change perceptions,” Ovadiah said. “By having visibility in places like the country’s largest accounting and law firms, these people will be able to advance and become influential themselves.”

The group taps top Israeli executives — the CEO of Bank Hapoalim is among the group’s volunteers — to spread the word about the program’s high-quality graduates.

Negat is one of this year’s participants. He said the program is his lifeline to finding work.

At a meeting center at Kibbutz Shfaim, Negat joined several others for a workshop where he had a one-on-one counseling session with an experienced businessman. Under the shadow of an oak tree, Danny Heller helped Negat troubleshoot how best to approach employers as he tries to embark on a career in finance.

Heller, also addressed a larger group of business and economics students during the workshop, reminding them of how extraordinary their journeys have been — and to play that up during their next job interview.

“You have incredible life stories,” the businessman told the group. “You went through things most people never had to, and your abilities, the walls you had to break down, are what will bring you to your next job.”

Israel booming but helicopters may be an omen of trouble ahead

On a recent morning, as Israeli Defense Minister Ehud Barak ratcheted up warnings that Israel was preparing to launch a major operation in the Gaza Strip, I stand on an Israel Defense Forces (IDF) lookout a few hundred yards from Gaza, as two dark Apache helicopters swoop down and fire on a nearby hill.

The helicopters let loose an intense barrage, dispatch their flares, bank sharply and return to attack again. Lt. Col. David Benjamin, the former IDF legal adviser in Gaza, suggests we leave the lookout and move behind a nearby rock. Meanwhile, IDF jeeps race across the path alongside the border fence in front of us.

Benjamin explains that these actions occur on a daily basis up and down the border. Just as the IDF works constantly to keep a small patch within Gaza clear of terrorists, so, too, Hamas makes efforts every day to get through, over or under the fence — and to engage the IDF. Hamas’ success rate has been minimal, he says, and their casualties significant, “but they’re still coming, still trying, every day.”

The key issue, Benjamin emphasizes, is Gaza’s border with Egypt.

“We patrol our land border, and our Navy patrols the sea border,” he says, “but the Hamas weapons are smuggled in under the border with Egypt.”

Benjamin notes that he drafted some of the legal paperwork that effected the Israeli withdrawal from Gaza two summers ago. “I told my commander when I handed him the documents that we were making history. He said, ‘Don’t be so sure — we might be back.'”

Nearby in Sderot, kids play outside during a teachers strike, even though Qassam rockets strike in or near the city every day. As Sderot suffers from the barrage and the flight of thousands of residents, Vice Mayor Aron Malka tells me that crime is at an all-time low and going down.

The community coming together in time of stress, I ask?

“No,” he says, “the Bedouins have disappeared” because of the Qassams.

Living in Sderot is “like being in a prison of life,” Malka says.

He smiles just a bit when told that artwork from the traumatized children of Sderot is touring venues in Los Angeles.

“That gives us hope,” he says. “The Jews will learn of Sderot, and it will give us the strength to stay.” Malka was born in Sderot 42 years ago, and he and his family are clearly staying, despite not having a shelter in their house.

Up north, white U.N. helicopters patrol what is supposed to be the Hezbollah-free area north of the Israeli border to the Litani River. Retired Col. Kobi Marom, former commander of IDF forces in the north, points to a helicopter hovering over a Lebanese road that his convoy used to transit regularly.

“Once a man stopped at my truck,” he says. “I was going to check him out, but before I could open the door, he exploded on my truck.” Marmon and his reinforced command vehicle survived; an officer in the vehicle behind him died.

Metulla, which sits as close to Lebanon as West Hollywood sits to Beverly Hills, reflects none of the scars of last year’s battle. The main streets and malls of Kiryat Shmona, likewise, have been repaired, and everyday life has returned. When I visited this area during the war last summer, I heard the pounding of IDF ordnance flying into Lebanon; this year I hear the sounds of commerce and traffic.

Yet Marom points north and shakes his head.

“They will try attacking IDF patrols again, soon,” he says of Hezbollah. “Nothing is more important to them than showing that they can fight Israel.”

On the outskirts of Kiryat Shmona, we stop at a memorial to 73 soldiers killed in the crash of two troop transport helicopters 10 years ago.

“I was the commanding officer, and I was here within five minutes,” Marom says, “but there was no one to save.”

My driver, Roni, looks at the memorial and does a double-take.

“My son was born the night of the crash,” he explains. “We celebrated his birth, and then one hour later news of the helicopter crash came on the TV. I saw the name ‘Shai’ twice — there were two soldiers named ‘Shai.’ It just clicked — we named our son Noam Shai.”

After a while, Roni looks at me.

“There’s so much meaning here,” he reflects. “Or maybe you just create meaning to keep yourself here.”

Israel is booming. Ben-Gurion Airport is on track for a record year. Entrepreneurs and foreign investment are flooding the zone. Hotel rooms are a precious commodity. On my recent visit I saw more construction cranes (more investment) and fewer shomerim at restaurants (less fear of suicide bombers) than ever before. And yet I flew home with the feeling that, one day soon, helicopters will again create meaning in Israel.

Jack Weiss is a member of the Los Angeles City Council.

Correcting the tilt in Jewish politics — it’s not just Israel, stupid

What will it take to convince politicians that Jewish voters care about a wide range of issues, not just Israel?

The creative folks at the Jewish Funds for Justice (JFSJ) think they have an answer.

This week the group is conducting an online survey of domestic priorities, with the goal of pressing the 2008 presidential contenders to engage in a genuine dialogue with Jewish voters over the results.

But the problem isn’t just that some candidates don’t know that Jews care about heath care, economic inequality, church-state separation, government ethics — the list is endless. Money distorts the political dialogue, and Jewish campaign contributions are concentrated and focused on the single issue of Israel.

Jewish organizations contribute to the problem as they shift the communal focus to Israel, both out of a sense of growing urgency over its fate and because Israel is what brings in members and dollars.

The idea that politicians can deal with Jewish voters with a few pro-Israel talking points and ignore domestic affairs is not new, but the tactic seems to be hardening into political dogma.

Jewish Republicans have good reasons to pursue an all-Israel-all-the-time strategy; the domestic issues advocated by their party, including banning abortion, giving money to religious schools and opposing gay rights, are non-starters with a Jewish electorate that remains stubbornly liberal despite an increasingly outspoken conservative minority.

That strategy appears to be a boost to GOP fundraising but a bust at the polls; last year’s congressional contests saw an overwhelming Jewish tilt to the Democrats despite aggressive attack ads by the Republican Jewish Coalition.

The Democrats have less of an excuse, but they increasingly play the same game.

At their recent candidates forum, leaders of the National Jewish Democratic Council (NJDC) encouraged the presidential candidates to address a wide range of issues, but most of them began with and emphasized support for Israel, even though it was a friendly audience that didn’t doubt their pro-Israel credentials.

It was revealing that the Democratic contenders got their biggest ovations for statements on non-Israel issues such as health care reform, economic justice and the genocide in Darfur, not their formulaic comments on Israel.

That relentless Israel focus represents a kind of disenfranchisement for the Jewish majority whose political interests do not begin and end with Israel.

But changing things won’t be easy. Candidates play the Israel card because that’s what they’ve been taught by mainstream Jewish leaders — and because that’s what produces the big bucks in their campaign coffers.

Jewish multi-issue groups continue be active in the domestic realm, but there’s little question that organizations such as the Anti-Defamation League, the American Jewish Committee and the American Jewish Congress spend much more time and energy on the Israel issue than they used to.

One reason is the perceived threat to the Jewish state in an era when international support is waning and new threats like a nuclear Iran loom.

But part of it is also a cold calculation that Israel activism is what attracts big donors to Jewish groups and provides a cohesion and sense of urgency that is often lacking in domestic matters.

Jews remain deeply committed to a wide range of domestic concerns, but beneath that reality are wide differences in positions and priorities. But talk about Israel facing a new Holocaust, and Jews line up to get involved — and to give money.

When Jewish leaders come to Washington or visit with political candidates around the country, they raise other issues, but Israel is almost always at the top of the list, so it’s hardly surprising that candidates have come to believe Israel is the ticket to Jewish political support.

That message is reinforced by networks of pro-Israel campaign funders around the country. Candidates in both parties are heavily dependent on Jewish money, and much of it comes through the pro-Israel network, with the obvious implication that this is what Jewish voters care about the most.

Jews who are motivated mostly by domestic affairs give heavily, too, but their contributions are much less focused, scattered across dozens of issues from energy independence to abortion rights. And more often than not, those contributions are not seen as Jewish contributions, in the same way pro-Israel giving is.

With campaign spending soaring — the 2008 presidential contest will set new records — the pressure to treat affluent constituencies as little more than cash-generating engines will accelerate. In Jewish politics that means candidates will continue to emphasize Israel and give short shrift to the domestic concerns dear to the hearts of most Jewish voters.

The Jewish Funds for Justice domestic policy campaign raises important questions, but the skewed nature of Jewish politics won’t change until groups with a more domestic focus begin to organize contributors, focus their campaign giving and coordinate and concentrate their message.