Israel is located in the Middle East, bordered by the Mediterranean Sea and Egypt to the West, and Syria and Jordan to the East. The creation of the State of Israel in 1948 was preceded by more than 50 years of efforts by Zionist leaders to establish a sovereign nation as a homeland for Jews. The desire of Jews to return to what they consider their rightful homeland was first expressed during the Babylonian exile and became a universal Jewish theme after the destruction of Jerusalem by the Romans in 70 A.D. and the dispersal that followed. It was not until the founding of the Zionist movement by Theodore Herzl at the end of the 19th century that
practical steps were taken toward securing international sanction for large-scale Jewish settlement in Palestine--then a part of the Ottoman Empire.
Israel is a parliamentary democracy. Its governmental system is based on several basic laws enacted by its unicameral parliament, the Knesset. The president (chief of state) is elected by the Knesset for a 5-year term. The prime minister (head of government) exercises executive power and has in the past been selected by the president as the party leader most able to form a government. In the May 1996 elections, Israelis for the first time voted for the prime minister directly, in accordance with recent legislation. The members of the cabinet must be collectively approved by the Knesset.
Israel has a diversified modern economy with substantial government ownership and a rapidly developing high-tech sector. Poor in natural resources, Israel depends on imports of oil, coal, food, uncut diamonds, other production inputs, and military equipment. Its GDP in 1997 reached $98 billion, or $16,800 per person. The major industrial sectors include metal products, electronic and biomedical equipment, processed foods, chemicals, and transport equipment. Israel possesses a substantial service sector and is one of the world's centers for diamond cutting and polishing. It is also a world leader in software development and is a major tourist destination.
U.S. State Department Background Notes, 12/1998