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Background: Following World War II, the British withdrew from their mandate of Palestine, and the UN partitioned the area into Arab and Jewish states, an arrangement rejected by the Arabs. Subsequently, the Israelis defeated the Arabs in a series of wars without ending the deep tensions between the two sides. The territories Israel occupied since the 1967 war are not included in the Israel country profile, unless otherwise noted. On 25 April 1982, Israel withdrew from the Sinai pursuant to the 1979 Israel-Egypt Peace Treaty. In keeping with the framework established at the Madrid Conference in October 1991, bilateral negotiations were conducted between Israel and Palestinian representatives and Syria to achieve a permanent settlement. Israel and Palestinian officials signed on 13 September 1993 a Declaration of Principles (also known as the "Oslo Accords") guiding an interim period of Palestinian self-rule. Outstanding territorial and other disputes with Jordan were resolved in the 26 October 1994 Israel-Jordan Treaty of Peace. In addition, on 25 May 2000, Israel withdrew unilaterally from southern Lebanon, which it had occupied since 1982. In April 2003, US President BUSH, working in conjunction with the EU, UN, and Russia - the "Quartet" - took the lead in laying out a roadmap to a final settlement of the conflict by 2005, based on reciprocal steps by the two parties leading to two states, Israel and a democratic Palestine. However, progress toward a permanent status agreement was undermined by Israeli-Palestinian violence between September 2003 and February 2005. In the summer of 2005, Israel unilaterally disengaged from the Gaza Strip, evacuating settlers and its military while retaining control over most points of entry into the Gaza Strip. The election of HAMAS to head the Palestinian Legislative Council froze relations between Israel and the Palestinian Authority (PA). Ehud OLMERT became prime minister in March 2006 and presided over a 34-day conflict with Hizballah in Lebanon in June-August 2006 and a 23-day conflict with HAMAS in the Gaza Strip during December 2008 and January 2009. OLMERT, who in June 2007 resumed talks with PA President Mahmoud ABBAS, resigned in September 2008. Prime Minister Binyamin NETANYAHU formed a coalition in March 2009 following a February 2009 general election. Direct talks launched in September 2010 collapsed following the expiration of Israel's 10-month partial settlement construction moratorium in the West Bank. Diplomatic initiatives to revive the negotiations through proximity talks began at the end of 2010.
note: data are in 2010 US dollars
GDP (official exchange rate): $201.3 billion (2010 est.);
GDP - real growth rate: 3.4% (2010 est.); 0.2% (2009 est.); 4.4% (2008 est.);
GDP - per capita (PPP): $29,500 (2010 est.); $29,000 (2009 est.); $29,500 (2008 est.);
note: data are in 2010 US dollars
GDP - composition by sector: agriculture: 2.4%; industry: 32.6%; services: 65% (2010 est.);
Population below poverty line: 23.6%;
note: Israel's poverty line is $7.30 per person per day (2007)
Household income or consumption by percentage share: lowest 10%: 2.5%; highest 10%: 24.3% (2008);
Labor force: 3.08 million (2010 est.);
Labor force - by occupation: agriculture: 2%; industry: 16%; services: 82% (September 2008);
Unemployment rate: 6.4% (2010 est.); 7.6% (2009 est.);
Budget: revenues: $60.59 billion; expenditures: $68.68 billion (2010 est.);
Industries: high-technology products (including aviation, communications, computer-aided design and manufactures, medical electronics, fiber optics), wood and paper products, potash and phosphates, food, beverages, and tobacco, caustic soda, cement, construction, metals products, chemical products, plastics, diamond cutting, textiles, footwear ;
Industrial production growth rate: 5.7% (2010 est.);
Electricity - production: 54.5 billion kWh (2008 est.);
Electricity - consumption: 46.38 billion kWh (2007 est.);
Electricity - exports: 2.081 billion kWh (2007);
Electricity - imports: 0 kWh (2008);
Statistics: CIA World Factbook.
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Countries in the East Mediterranean can use gas discoveries as a catalyst for regional cooperation, unlocking the region's production potential.
Through his increasingly belligerent position toward Palestinians and Iran, Netanyahu has managed to incense the United States, Israel's one indispensable ally.
Despite Israel's ongoing sabotage of peace talks, Turkey continues to work toward reconciliation between theocratic rivals in the Middle East.
Two decades of failed negotiations, perpetual conflict and an expanded occupation should encourage an alternative to the two-state solution.