Israel: Background and Relations with the United States

On May 14, 1948, the State of Israel declared its independence and was immediately engaged in a war with all of its neighbors. Armed conflict has marked every decade of Israels existence. Despite its unstable regional environment, Israel has developed a vibrant parliamentary democracy, albeit with relatively fragile governments. The Kadima Party placed first in the March 28, 2006, Knesset parliament election Prime Minister Ehud Olmert formed a coalition government. The tenure of the government is now uncertain due to a scandal involving Olmert. Israel has an advanced industrial, market economy with a large government role. Israels foreign policy is focused largely on its region, Europe, and the United States. Since 1948, the United States and Israel have developed a close friendship based on common democratic values, religious affinities, and security interests. U.S.-Israeli bilateral relations are multidimensional. The United States is the principal proponent of the Arab-Israeli peace process, but U.S. and Israeli views differ on some issues, such as the Golan Heights, Jerusalem, and settlements. The Bush Administration and Congress supported Israels 2006 military campaigns against Hezbollah and Hamas as acts of self-defense. The United States and Israel concluded a free-trade agreement in 1985, and the United States is Israels largest trading partner. Israel is a prominent recipient of U.S. foreign aid. The two countries also have close security relations. Other issues in U.S.-Israeli relations include Israels military sales to China, inadequate Israeli protection of U.S. intellectual property, and espionage-related cases. This report will be updated as developments warrant. See also CRS Report RL33530, Israeli-Arab Negotiations Background, Conflicts, and U.S. Policy, CRS Report RS22768, Israeli-Palestinian Peace Process The Annapolis Conference, and CRS Report RL33222, U.S. Foreign Aid to Israel.