1992- Introduction

The elections of June 1992 returned the Israel Labor party to power. Yitzhak Rabin was quick to form his left of center coalition government with Meretz and Shas. He set out to achieve two goals. The first was to reorder Israel's priorities, and place greater emphasis on domestic affairs such as education, the economy and the country's infrastructure. There was no doubt in the minds of the prime minister and his team that the top priority lay in providing a proper absorption for some half million immigrants who began to arrive in Israel in late 1989, the majority of them from the former Soviet Union. Their absorption, and that of an additional half-million immigrants projected to arrive by the year 2000, meant mainly seeking such resources that will generate tens of thousands of jobs, find housing solutions and provide the necessary social services for these people. There was also a need to reform some of the country's institutions. All this could not be achieved without a breakthrough in the peace process, which would enable Israel to concentrate its efforts on the home front.

This meant an attempt to reach an agreement with the Palestinians on the institution of a five-year interim self-government period projected in both the 19 78 Camp David Agreement and the Madrid Peace Process, both processes started by the Begin and Shamir governments. At the same time there was a need to deal with the growing wave of terrorism in the territories and inside Israel proper. These acts of terror and violence were carried out by those extremist Palestinian organizations that were determined to derail the peace process. In December the Government expelled some 415 Hamas activists and supporters to Lebanon and encountered much criticism for that act.

In view of the fact that the bilateral peace talks, conducted in Washington under the terms of the Madrid Peace Process, failed to break the deadlock, Israel began to seek new channels to deal directly with the relevant parties. This meant mainly Jordan and the Palestinians. Thus the first few months of the new Government witnessed and attempt to learn the new realities and chart a new course which was totally different from that of the previous Government. The first major decision was effectively to freeze new buildings in the Gaza Strip and the West Bank. Some confidence-building measures were also undertaken. As always, Israel sought to coordinate its policies with those of the United States, then in the final throes of the 1992 presidential campaign. The new Israeli priorities enabled the Bush Administration to respond positively to Israel's request for a $10 billion loan guarantee. Warm working relations were also achieved with Egypt, whose president, Hosni Mubarak, became a central figure in the peacemaking process. In the international arena, Israel began to feel the positive impact of the Madrid Peace Process. This was seen in the somewhat less virulent language used in the annual resolutions of the UN General Assembly.

By late 1992, the stage was set for the dramatic events that were to unfold in 1993.