Building a new nation.
The population of the State of Israel more than doubled inits first five years. Half of the national budget went towards immigrant resettlement, with military spending coming in a close second. In 1950 the Jewish Agency began a program of building ma'abarot, low- cost crowded camps equipped with tents and few modern facilities.
The new settlement program also coincided with"Operation Ezra and Nehemia," which airlifted more than 100,000 Jews from Iraq in 1950-1951. In 1954, as the Moroccan population in Israel grew, the government devised a way to allow these immigrants to skip the ma'abarot (the last of which were closed in the early 1960s), sending them instead to villages and development cities throughout the country.
With much of the government's spending going towards resettlement and the military, there was little left for spurring economic growth. Israel relied on help from the American government and world Jewry,whose charitable contributions together exceeded $750 million between 1949 and1961. The United Israel Appeal and Keren Hayasod gave more $60 million dollars a year through the 1950s. The German reparations treaty, signed in 1952,figured just as prominently, ensuring a flow of approximately $800 million over12 years to institutions in Israel.
By the middle of the decade, Israel's real income--meaning money the nation earned rather than was granted--was climbing, with production rates of goods and quality of life rising. However, large numbers of immigrants, mainly Sephardim from Arab Lands, were still living in poor conditions in development cities.
In the 1950s, the Arab world attempted to pressure Israel through economic sanctions; Israeli ships could not use Arab ports, and Israeli airplanes could not use Arab air space. In 1955, Egypt purchased large amounts of weapons from the Soviet Union and Czechoslovakia. The next year it announced the nationalization of the Suez Canal.
These actions, combined with increased terrorist attacks across the border and Egypt's massive military build-up, prompted Israel to join Great Britain and France in attacking Egypt on October 29, 1956. The British, French, and Israeli combined military action was successful, but the United Nations set up forces in the Sinai to ensure that it would not be repeated.
Six Day War
In May 1967, Egypt expelled the United Nations Emergency Force from the Sinai Peninsula and amassed 100,000 soldiers at the border with Israel. The Six-Day War began on June 5, 1967, when the IDF, led by Chief of Staff Yitzhak Rabin, preemptively attacked Egypt's air force and Jordan attacked Israel. By the end of the war, Israel had gained control of the Old City of Jerusalem and the West Bank (which Jordan had occupied since 1948), the Gaza Strip (which Egypt had occupied since 1948), the strategic Golan Heights from Syria, and the Sinai Peninsula.
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