The year witnessed both the Gulf War in which Israel became a one-sided participant, and the launching of the peace process. Between 15 January and the end of the war on 28 February, 39 Scud missiles were fired at Israel. Some landed in heavily populated areas causing much damage, but only one death and some wounded. Israel acceded to an American request that it do not launch an independent military action and pursued a policy of restraint which won it much praise in the free world. At the conclusion of the Gutf War, it became obvious that a new reality had been created, a new world order in the words of President Bush and a new Middle Eastern order.
The United States now wanted to reorganize the defense of the Middle East against both Iraq and Iran, who were seen as the key dangers to the stability of the region. The United States felt bound to deal with the resolution of the Arab-Israel conflict, a promise made to its Arab partners in the anti-Saddam Hussein war coalition. A new mood prevailed in the Arab world. The result of the Gulf War was seen as another Arab humiliation by Western technology led by American might. It was realized in most Arab capitals that the danger to the Arabs does not emanate from Israel but from Iraq and Iran determined to impose their brand of Islam ic fundamentalism on the rest of the Arab world. It was clear that another Arab-Israel war would be fought with non-conventional weapons, wreaking havoc on all nations in the region. It was clear to all the Arab states that they will have to deal with Israel on issues such as water, arms reduction, environment, economic development and refugees since any agreement without Israel would not be worth the effort. But the Arabs felt that Israel must now address itself to both issues of Palestinians and the territory.
Israel emerged from the Gulf War scathed and bruised. Israel's economic vulnerability was evident. For the first time in its history it abandoned the doctrine of retaliation and allowed the stationing of foreign troops, mainly Americans, on its soil, to man Patriot ground-to-air missiles. The end of the Gulf War raised some doubts in Washington about Israel's strategic value to the Untied States. The collapse of the Soviet Union meant, on the other hand, that Syria and other Arab states have lost their military and political backer and that the United States became the dominant superpower in the region.
Between March and October 1991 Secretary of State Baker undertook eight trips to the Middle East to bring about the convening of a peace conference and the launching of the peace process. The key issues that he had to resolve were the nature of the ceremonial opening, Israel's insistence on direct bilateral and multilateral talks, the role of the powers, the role of the Europeans and the UN, the Palestinian representation and letters of assurances to Israel (and the Arabs) on all those issues. There were ups and downs in the talks, but it was obvious that once Syria agreed to participate in the process, all other elements will be resolved On 18 October, the United States and the Soviet Union (which had on that day restored full diplomatic relations with Israel), issued letters of invitations to the parties to come to Madrid for the ceremonial opening. The Palestinian delegation would be part of the Jordanian delegation thus excluding the PLO from the process. The UN would be a silent observer and the Europeans will be participants. The United States accepted the Israeli idea of a two-track process, and the negotiations would be based on both Resolution 242 and the 14 May 1989 Israeli initiative. The peace conference was convened in Madrid on 30-31 October.
Following a series of speeches by Presidents Bush and Gorbachev, the prime ministers of Spain and Israel, the foreign ministers of Syria, Egypt and Lebanon, as well as the head of the Palestinian delegation and the European participant, it started the second stage - that of bilateral and direct negotiations. These were moved to Washington and the second round took place in the American capital on 4 December.
Relations with many nations of the world improved considerably as a result of Israel's policy of restraint during the Gulf War. Messages of support streamed to Jerusalem and visitors came to express their solidarity. In spite of the war, immigration continued and some 75,000 immigrants arrived from the former Soviet Union. In a dramatic operation, on 25 May Israel rescued 14,400 Ethiopian Jews and airlifted them to Israel hours before the collapse of the Mengistu regime. Thus, 1991 was a turning point in the history of the Middle East and of the Arab-Israel conflict. Israel achieved its dream, that of direct peace negotiations with its neighbours.