The changes effected on the Labor Party board, reviving its traditionally social-democratic positions, coupled with the emergence of new parties as the Retirees’ Party and the Lechem (Bread), shifted the spotlights onto social issues during the campaign, in spite of concerns with the Israeli-Palestinian conflict in light of the new framework drawn by the unilateral withdrawal from the Gaza Strip and the electoral victory of the Hamas. Amir Peretz’s campaign pledged to carry out social reforms and increase minimum wage to USD 1,000.

On March 28 there were elections to compose the parliament of Israel and the ensuing result to distribute 120 seats was as follows:

A thirty-seven percent absenteeism rate was considered high and there was not the usual showdown between the Likud and the Labor Party, as the former split up when Ariel Sharon and his group left in order to found a new political party called Kadima (Forward). Labor leaders, in turn, replaced Shimon Peres in the presidency of the party for Amir Peretz, former president of Israeli trade union federation Histadrut. After the party primary in which he lost, Peres also joined the Kadima, while Sharon suffered a disabling brain stroke and was replaced at the head of government and the party by Ehud Olmert.

The changes effected on the Labor Party board, reviving its traditionally social-democratic positions, coupled with the emergence of new parties as the Retirees’ Party and the Lechem (Bread), shifted the spotlights onto social issues during the campaign, in spite of concerns with the Israeli-Palestinian conflict in light of the new framework drawn by the unilateral withdrawal from the Gaza Strip and the electoral victory of the Hamas. Amir Peretz’s campaign pledged to carry out social reforms and increase minimum wage to USD 1,000.

Today Israel spends 30% of its budget on security and just 6% on social policies. Unemployment for the Israeli population is at 9% and the minimum wage is worth USD 700. Between 1990 and 2005, households below the poverty line in Israel rose from 15% to 20.5%. Among the elderly the percentage rises to 25% and many of them survive on charity. Responsibility for this lies with the neoliberal economic measures adopted by Benjamin Netanyahu, who preceded Ariel Sharon as prime minister and later was Sharon’s minister of finance.

The result for Labor was good, but the task of composing the new cabinet is a Kadima prerogative, a party which, basically, campaigned in defense of a proposal to end the Israeli occupation by withdrawing from the West Bank territories, where the vast majority of the population is Palestinian, and thereby unilaterally defining Israel’s borders. This position is believed to have the American support, but neither meets UN resolutions nor is an answer to the problem of some 2.5 million Palestinian refugees abroad, not to mention the situation of political prisoners.

The new government will be led by Prime Minister Olmert, who has 40 days from the official announcement of the result to set up his cabinet. If willing to govern, Olmert will need the Labor Party, which might therefore exert great influence on Israel’s economic policy and on the peace process.