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COUNTRY PROFILES


PROFILE

Full Country Name: The State of Israel
Area: 21,000 sq km (pre-1967 borders)
Population: 7.5m
Capital City: Israel maintains that Jerusalem is its capital city, a claim not recognised by the UK and the international community. The UK locates its embassy in Tel Aviv.
People: Jews (76%), Muslims (16.1%), Christians (3.4%), and Druze
Languages: Hebrew, Arabic. English and Russian widely spoken
Religion(s): Judaism, Islam, and Christianity
Currency: New Israeli Shekel (NIS)
Political parties: Kadima, Likud, Israel Beitenu, Labour, Shas, United Torah Judaism (UTJ), Independence, Meretz, National Union, Jewish Home, United Arab List, Hadash, Balad.
Government: Coalition government led by Likud with Israel Beitenu, Shas, Independence, UTJ, and Jewish Home.
Head of State: President Shimon Peres
Prime Minister: Benjamin Netanyahu
Foreign Minister: Avigdor Lieberman
Defence Minister: Ehud Barak
Membership of international groups/organisations: United Nations, International Monetary Fund, World Bank, OECD and World Trade Organisation.

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ECONOMY

Basic Economic Facts

Annual Growth: 4.7% in 2011
Inflation: 3% in 2011
Major Industries: Electronics, telecommunications, information technology, biotech, tourism, construction, diamonds, and agriculture
Major Trading Partners: USA and EU
Israel has developed a world-class reputation for technological research and development (particularly in electronics, biotechnology, and software). It also enjoys trading exports in cut diamonds, chemicals, pharmaceuticals and agricultural products.

Israel’s economy is in a relatively good situation despite the global financial crisis and the slowdown in the US. The overall performance of the economy in 2009 and in 2010 won plaudits from the World Bank and other leading economic institutions. The two major rating agencies gave Israel an ‘A’ rating and Israel has recently been accepted as a member of the OECD. Much of this is due to the high-tech sector, which continues to go from strength to strength, with growing international respect for Israeli innovation and technology.

Israel's gross domestic product (GDP) grew by 4.1% in 2008,but like the rest of the world began to slow down and in 2009 was only 0.5%. However, the economy recovered well and the GDP of 4.5% for 2010 was double the average for other OECD countries.

For the first time, at the end of 2010, the government approved a two year budget to cover 2011 and 2012. The budget for 2011 was NIS366.8 billion and for 2012 will be NIS385.6 billion. The cabinet has also decided to reduce the budget deficit gradually over the next six years. Military spending and debt repayments remain the major items of budget spending.

It is early days yet to judge the full potential of the Natural Gas fields which were discovered off shore in 2009. These huge deposits, which would supply all internal needs for the next 60 years and allow Israel to join the gas exporters, could have a positive effect on the economy in the coming years. However despite the robust performance of the economy over the past few years, the long term outlook remains dependent on developments in the conflict with the Palestinians and on political and security developments in the region.

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HISTORY

-- 1948 End of British Mandate and State of Israel Proclaimed (14 May)

-- 1948 War/War of Independence (May 1948-March 1949)

-- 1949 First Knesset (parliament) elected; David Ben Gurion first Prime Minister

srael admitted to the United Nations

-- 1956 Suez/Sinai Campaign

1967 June/Six-Day War

-- 1973 Yom Kippur/October War

-- 1975 Israel becomes an associate member of the Common Market

-- 1977 Likud forms its first Government after almost 30 years of Labour/Mapai rule

-- 1978 Camp David Accords, which included a framework for comprehensive peace in the Middle East and Palestinian self-government

-- 1979 Israel-Egypt Peace Treaty signed by Prime Minister Menachem Begin and President Anwar Sadat

1982 Israel invades Lebanon

-- 1985 Free Trade Agreement signed with the United States

-- 1987 The First Intifada begins, lasting six years

-- 1989 Start of mass immigration of Jews from the Soviet Union

-- 1991 Middle East Peace Conference convened in Madrid

-- 1993 Oslo Accords - Declaration of Principles on Interim Self-Government

-- Arangements for the Palestinians signed by Israel and the PLO

-- 1994 Israel-Jordan Peace Treaty signed. Implementation of Palestinian self-government in Jericho and Gaza

-- 1995 Prime Minister Yitzhak Rabin assassinated (4 November). Broadened Palestinian self-government implemented in West Bank and Gaza

1997 Hebron Protocol signed

-- 1998 Wye River Memorandum signed

-- 2000 Israeli withdrawal from south Lebanon Camp David Talks (July) Second ('Al Aqsa') Intifada begins (September)

-- 2001 Ariel Sharon elected Prime Minister (February). Forms a National Unity Government coalition

-- 2003 Israeli Cabinet accepts the steps set out in the Roadmap (May)
-- August 2005: Disengagement plan is implemented: Israel evacuates all settlers from the Gaza Strip and from four settlements in the northern West Bank
-- September 2005: The Israeli Defence Forces withdraw from Gaza
-- November 2005: Ariel Sharon resigns from Likud to form a new political party, Kadima January 2006: Ehud Olmert becomes Acting Prime Minister, after Sharon suffers a stroke ;sworn in as Prime Minister following March general election

-- June 2006, Palestinian militants kill two Israeli soldiers and abduct Corporal Gilad Shalit from Kerem Shalom in southern Israel and take him into the Gaza Strip

-- July 2006 Second Lebanon War breaks out following the Hizballah abduction of two Israeli reservists from Northern Israel to Lebanon and the killing of another eight soldiers

2006 Ceasefire and end of Second Lebanon War

-- November 2007 Middle East Summit in Annapolis; Israelis and Palestinians agree to implement roadmap

-- July 2008 Following allegations of fraud and misconduct, Prime Minister Ehud Olmert announces he will not run for the leadership in the Kadima primary, effectively announcing his stepping down as Prime Minister

-- September/October 2008 Tzipi Livni elected leader of ruling Kadima party but fails to form a coalition government; President Peres calls elections

-- 19 December 2008 Six-month cease-fire between Israel and Hamas expires

-- 27 December 2008 Israel launches Operation Cast Lead in Gaza Strip in response to persistent rocket attacks on southern Israel

-- 8 January 2009 UN Security Council passes Resolution 1860 proposed by UK calling for an immediate ceasefire

-- 18 January 2009 Israel and Hamas announce unilateral ceasefires

-- 10 February 2009 Elections for 18th Knesset held; Kadima wins 29 seats, Likud 28

-- 20 February 2009 President Peres ask Benjamin Netanyahu to form coalition

31 March 2009 New Israeli government sworn in

-- 26 November 2009 President Netanyahu declares a partial freeze on Israeli settlement construction in the West Bank

-- 26 September 2010 Settlement construction freeze expires and is not renewed

-- 17 January 2011 Defence Minister Ehud Barak splits from Labour Party, taking five MKs with him to form a new faction called Independence.

-- 9 September 2011 MK Shelly Yechimovich becomes chair of the Labour party

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INTERNATIONAL RELATIONS

Israel has diplomatic relations with 160 countries. It has over 90 diplomatic missions.
Of its neighbours, Israel has diplomatic relations with Egypt (Israel-Egypt Peace Treaty 1979) and Jordan (Israel-Jordan Treaty of Peace 1994). Lebanon and Syria do not have diplomatic relations with Israel. The governments of Tunisia, Morocco, and Oman suspended diplomatic relations at the start of the Second Intifada (2000).

ISRAEL'S RELATIONS With the UK

The UK established full diplomatic relations with Israel in 1950. Since this point, bilateral relations between the UK and Israel have been solid, but not without differences of opinion. An active British Jewish community has always brought vitality to the relationship. There are regular Ministerial exchanges.

In November 2008, the Israeli President, Shimon Peres, visited the UK and addressed members of both Houses of Parliament. He also received an honorary knighthood from HM The Queen.

Diplomatic Representation

The UK has full diplomatic relations with Israel. The British Embassy in Israel is located in Tel Aviv. Responsibility for East and West Jerusalem, the West Bank, and Gaza lies with the British Consulate-General in Jerusalem.

UK in Israel (http://ukinisrael.fco.gov.uk/en)
UK in Jerusalem (http://ukinjerusalem.fco.gov.uk/en)

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GEOGRAPHY

Green-line' Israel (1949 armistice boundaries) covers 21,000 sq. km and is about the same size as Wales. But Israel's borders and the status of Jerusalem are still disputed. Israel has occupied East Jerusalem, the Golan Heights, the West Bank, and Gaza since 1967 (Israel withdrew from Gaza in 2005, but maintains control of Gaza’s airspace and borders on three sides). In 1980, Israel annexed East Jerusalem. In 1981, it annexed all of the Golan Heights area captured from Syria in 1967. Mount Hermon, the highest peak in the annexed Golan Heights, is 2,000 metres high. By contrast, the Dead Sea is the lowest point on earth, at 396 metres below sea level.

Israel is 550 km long but only 12 km wide at its narrowest point within the Green Line. Its main regions are:

-- Galilee – an area of partly forested rolling hills, bordered by the Sea of Galilee in the east, the Mediterranean in the west, and the Lebanese border in the north.

-- Carmel – a limestone escarpment with Mediterranean scrub vegetation, running south from Haifa, parallel to the Mediterranean coast.

-- Coastal Plain – a strip some 12-20 km wide along the Mediterranean with the greater part of Israel's population and industry.

-- Jerusalem Hills – forested hills, with commuter towns and villages.

-- Negev – a rock desert extending over 40% of Israel's land area, in the south.

-- Jordan Valley – an extension of the Great Rift Valley in Africa, running along Israel's eastern border.

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TRADE AND INVESTMENT WITH THE UK

Bilateral business relations are excellent and continue to flourish, with almost 300 Israeli firms operating in the UK. Trade relations between the two countries continue to be strong. Israel is the UK’s largest individual trading partner in the Near East and North Africa region and ended 2010 as the UK’s 29th largest market worldwide and is the third biggest export market in the Middle East. Major British companies, including HSBC, Lloyd’s of London, Glaxo SmithKline, and British Airways, have significant business interests in Israel. The excellent trade links between the UK and Israel are reflected in the number of high-level visitors and numerous trade delegations.

Like the UK, Israel is an R&D- intensive society and bilateral links are encouraged through schemes such as the Britain-Israel Research and Academic Exchange (BIRAX) (http://www.britishcouncil.org/israel-education-birax.htm) and the EU's Framework Programme for research and technological development. In January 2011, the UK-Israel Life Sciences Council held its inaugural meeting in Jerusalem bringing together senior British and Israeli academics.

UK-Israel Technologies Hub

The UK-Israel Technologies Hub was launched in October 2011.

The Hub is tasked with promoting economic growth and innovation in the UK and Israel by creating lasting partnerships between the two countries in technology. We will position the UK as a natural partner of choice for Israel in technology, and ensure the UK market can make full use of the breadth and quality of Israeli R&D and innovation

UK Trade & Investment Country Profile: Israel (https://www.uktradeinvest.gov.uk/ukti/appmanager/ukti/countries?_nfls=false&_nfpb=true&_pageLabel=CountryType1&navigationPageId=/israel)

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POLITICS AND ELECTIONS

Israel is a democratic republic. Elections to the single-chamber legislature, the Knesset, are based on a system of proportional representation. The Knesset has 120 members who are elected from party lists. No Israeli political party has ever won an absolute majority in the Knesset. The law stipulates that elections should be held every four years, but they are often called sooner.

Israel does not have a written constitution, but a series of 'Basic Laws'.

The President is the Head of State, which is mainly a ceremonial post. The current incumbent, Shimon Peres, was elected by members of the Knesset in June 2007.

Elections to the current Knesset took place on 10 February 2009. These elections distributed seats among 12 parties: Kadima 28, Likud, 27, Israel Beitenu 15, Labour 13, Shas 11, United Torah Judaism 5, The New Movement - Meretz 3, National Union 4, Jewish Home 3, Hadash 4, United Arab List 4, Balad 3. Since no party had an overall majority, President Peres asked Benjamin Netanyahu to form a coalition government. The Knesset approved Netanyahu’s government on 31 March 2009. The coalition is currently made up of Likud, Israel Beitenu, Shas, Independence (which split from Labour), United Torah Judaism, and Jewish Home. The next election will take place in 201.

THE UK’S ROLE IN THE MIDDLE EAST PEACE PROCESS

The British government seeks urgent progress on a two-state solution to the Israeli-Palestinian conflict. The conflict matters to British national security, and we will take every opportunity to help promote peace in the Middle East. Our goal is a secure and universally recognised Israel living alongside a sovereign and viable Palestinian state, on the basis of 1967 borders with limited agreed land swaps, with Jerusalem the future capital of both states, and a fair settlement for refugees.

For more information, go to: Middle East Peace Process (http://www.fco.gov.uk/en/fco-in-action/conflict/middle-east-peace-process/) .

JERUSALEM

Under the UN partition resolution (1947) Jerusalem was to be a corpus separatum under a UN administered Special Regime. But in the 1948 war, Israel occupied West Jerusalem and Jordan occupied East Jerusalem, including the Old City.

In the 1967 war, Israel also occupied East Jerusalem. The Israeli government immediately extended its civil law to the whole city, simultaneously greatly enlarging the municipal boundaries into the West Bank. This purported annexation of East Jerusalem was affirmed in 1980 when Israel enacted its 'Jerusalem Law', formally declaring East and West Jerusalem together, 'whole and united', to be 'the capital of Israel'.

The 1993 Declaration of Principles and the 1995 Interim Agreement left the issue of Jerusalem to be decided in "permanent status" negotiations between the two parties.

THE UK POSITION ON JERUSALEM

Jerusalem holds particular significance for many groups around the globe, especially the three Abrahamic faiths of Islam, Judaism and Christianity. The UK believes a solution to Jerusalem must be sought as part of a negotiated settlement between the Israelis and the Palestinians, and the solution must allow for all those people for whom Jerusalem means so much to access and enjoy it.

Although the UK accept de facto Israeli control of West Jerusalem, we consider East Jerusalem to be occupied territory. It is crucial that the parties involved come to an agreement whereby Jerusalem can be a shared capital of the Israeli and Palestinian States.

We consider attempts by Israel to alter the character or demography of East Jerusalem are unacceptable and extremely provocative. Settlements, as well as the evictions and demolitions of Palestinian homes in East Jerusalem are illegal and deeply unhelpful to efforts to bring a lasting peace to the Arab-Israeli conflict.

The UK will continue to add to international calls for restraint and the avoidance of provocative actions from both sides in and around Jerusalem.

Our Embassy to Israel is in Tel Aviv, not Jerusalem. In East Jerusalem we have a Consulate-General, with a Consul-General who is not accredited to any state: this is an expression of our view that no state has sovereignty over Jerusalem. The UK believes that the city's status has yet to be determined, and maintains that it should be settled in an overall agreement between the parties concerned.

The British Government supports the right of the Palestinian people to establish a sovereign and independent Palestinian state and looks forward to early fulfilment of this right, provided there is a concomitant recognition of Israel's right as a state, and the right of its citizens to live in peace with security.

DEFENCE

The Israel Defence Forces (IDF) comprise an Army of 125,000 regulars, of whom 100,000 are conscripts, and an additional 460,000 are reservists; an Air Force manned by 32,000 regulars, of whom 22,000 are conscripts, and an additional 5,000 reservists; and a Navy manned by 8,000 regulars, of whom 3,000 are conscripts, and an additional 2,000 reservists. There is also a paramilitary Border Police force of 6,000 responsible for control of frontiers, as well as responsibility for security in Jerusalem.

Israel has compulsory military service; both men and women are called up at the age of 18. Some 60% of Israeli women and 72% of men are actually conscripted. Compulsory military service is 36 months for men and 24 months for women. Men are required to do reserve duty until the age of 40, and some women until the age of 30, although reserve duty obligations vary depending on the unit. There is continuing controversy in Israel about the exemption from military service of Orthodox Jews studying in religious seminars (yeshivot), although there are increasing numbers of Orthodox Jews choosing to do military service in one form or another.

The IDF is responsible for securing all international borders around the State of Israel, including the control of airspace and coastal waters. The IDF is the occupying power in the Occupied Territories and therefore acts as the interface between the State of Israel and the Palestinians.

The Co-ordinator for Administration in the Territories (COGAT) is a Major-General who answers to the Defence Minister and the IDF Chief of Staff. COGAT is also responsible for liaison with the International Community and NGOs operating in the occupied territories.

Since Israel completed its disengagement from the Gaza Strip in September 2005, IDF Ground Forces are now located outside the Strip. However the IDF continues to control the airspace over Gaza and coastal waters. Restrictions on movement are imposed on people and goods entering and leaving the Gaza Strip.

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HUMAN RIGHTS

The situation in Israel & the OPTs continued to be of concern to the UK. Our particular concerns include Israeli demolitions and evictions of Palestinians in East Jerusalem and the West Bank; the human rights effects of restrictions on Gaza; the increase in the number of attacks by extremist Israeli settlers; the treatment of Palestinian suspects by the Israel justice system; and the allegations of abuse of detainees in Palestinian Authority prisons.

We welcomed the release of Gilad Shalit in October 2011, after he was held by Hamas without access to the Red Cross or contact with his family for over five years. Human Rights and Democracy: The 2010 Foreign and Commonwealth Office Report can be found here.
(http://s3-eu-west-1.amazonaws.com/htcdn/Human-Rights-and-Democracy-The-2010-Foreign-Commonwealth-Report.pdf)

UK SUPPORT ON Human Rights

While the UK recognises Israel’s right to protect itself against terrorist attacks, the Israeli government is called upon to do so in full compliance with its obligations in international law. The UK works with Israeli ministers, officials, and the military to address matters of policy. The UK continues to raise a range of human rights concerns with the Israeli authorities, including on the construction of settlements and route of the barrier, the conduct of Israel’s armed forces, Palestinian movement and access, and the humanitarian situation in the Gaza Strip. The UK supports a number of Israeli NGOs which work on human rights issues.

One of the key tools we have to promote change on human rights issues is the Middle East and North Africa Conflict Pool, which is a Tri-Departmental Programme fund, jointly managed by the Foreign & Commonwealth Office, the Ministry of Defence and the Department for International Development.

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Last Updated: March 2012

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