Today, Israel marks the 60th anniversary, according to the Hebrew calendar, of its founding. World leaders will endorse the event with a major international conference in Jerusalem on May 14-16, the actual date of its founding. It will be attended by United States President George W. Bush, former president of the Soviet Union Mikhail Gorbachev, Former US secretary of state Henry Kissinger, 12 heads of state, media and business tycoon Rupert Murdoch and Google’s co-founder Sergey Brin.

The official celebrations—aeronautical displays, a naval review along the Mediterranean coast, and mass parachute drops—illustrate the character of Israel as a garrison state that polices the region on behalf of US imperialism.

Despite the celebrations, not one of the commentators outside or within Israel has been able to disguise the deep sense of unease and disillusionment that pervades Israel. Many Israelis had opposed a flamboyant celebration: an online petition calling for a scaling back of expenditure achieved 90,000 signatures by the end of March against the original target of 10,000. As a result, the government was forced to announce that 35 percent of the $28 million budget—far less than the $70 million spent on the 50th anniversary in 1998—would be spent on educational, infrastructure and remembrance projects.

Neither could commentators fail to contrast this with how the Palestinians in the Occupied Palestinian Territories, the squalid refugee camps of Lebanon, Syria and Jordan, and in the Diaspora, regard the event.

For them, the creation of Israel, which they call the Naqba, or catastrophe, is synonymous with the forcible expulsion and flight of more than 700,000 Palestinians from their homes, and the start of a life of exile and poverty. Their property was expropriated and they were not allowed to return. Today, the original refugees and their descendants as well as those who became refugees after the 1967 war now number around 4.5 million.

On the occasion of Israel’s anniversary, Palestinians in the West Bank and Gaza face a three-day lockdown. Public sector workers and students will stop work at 11 a.m. to join rallies in the West Bank and Gaza. Sirens will start a two-minute silence at noon.

More than a few commentators noted the contrast with Israel’s celebrations of the 50th anniversary, when many Israelis still harboured illusions that the 1993 Oslo Agreement offered the prospect of a truncated Palestinian state and thus peace with the Palestinians and their Arab neighbours. The Economist magazine noted that Israel’s future was “as uncertain as at any time in its 60-year history.” Michael Oren, an Israeli historian and senior fellow at the Shalem Centre think tank, asked pointedly, “How many countries in the world question whether they will still be around in 20 or 30 or 50 years time? Israel’s survival is nothing that we can take for granted.”

Several factors underlie the deeply pessimistic mood.

The disastrous war in Lebanon

The inconclusive military result of the 2006 war in Lebanon was a debacle for Israel and sent a shudder through its ruling elite. The war was not merely to eliminate Hezbollah as a significant military and political force. It was also to further Washington’s strategic goal in Central Asia and the Middle East, under the cover of the “war on terrorism,” of controlling the region’s oil resources by targeting Iran.

While Hezbollah suffered major losses, its defiant opposition to the Washington-backed bombardment by Israel, which resulted in the deaths of more than 1,000 and many more injured, along with the destruction of much of Lebanon’s basic infrastructure, raised its stature throughout the Middle East. The US-backed Lebanese government was, in contrast, correctly viewed as a quisling regime of Washington.

The debacle showed that Israel was totally unprepared for war against a guerrilla force armed with conventional weapons. It demonstrated the underlying weakness and vulnerability not only of Israel’s military, intelligence and civil defence services, but also the lack of popular support for the militarism of its political leadership.

Israel’s military had grown used to fighting low-intensity operations against the Palestinians. It was not prepared, equipped and trained for long land-based operations against a more substantial military opponent. Moreover, a largely conscript army of young people, supplemented by older reservists, contained many soldiers that did not agree with the war and did not want to fight in it.

Israel’s civil defences—its shelters and supplies in the northern cities and towns that came under attack from Hezbollah’s rockets—had all but disappeared as privatisation, deregulation and financial cutbacks, not to mention bribery and corruption, took their toll. While those citizens who had the money or family and friends in the south fled, the poor and the elderly were left with little or no protection or supplies. The government’s callous indifference to the plight of its citizens was one of the most important factors contributing to the popular pressure for the Winograd commission of inquiry, which lambasted the Kadima-Labour coalition government of Ehud Olmert for its conduct of the war.

Relations with the Palestinians

The situation in relation to the Palestinians, while apparently a “success” story for Israel, has produced widespread political disaffection among Israelis.

Behind the smokescreen of the US-sponsored “peace process,” and with the complicity of Palestinian Authority President Mahmoud Abbas, Israel has further consolidated its land-grab in the West Bank. The government has encircled Jerusalem with settlements that will make it impossible for Palestinians to live in and travel to and from Jerusalem, much less make any part of its capital in any putative state. It has turned the West Bank into a patchwork of disconnected enclaves, confining the Palestinians to 60 percent of the West Bank with 40 percent being off-limits due to the so-called Security Wall, military installations and roads linking the settlements to Israel—replete with 550 roadblocks making movement all but impossible and wrecking the economy.

At the same time, Israel has waged war against the Gaza Strip, assassinated its opponents, killed hundreds of Palestinians and inflicted illegal and cruel collective punishment on the entire population. It has laid siege to Gaza in order to starve the Palestinians into submission. Cutting fuel supplies by 70 percent has led to power cuts, sporadic running water, and 30 million litres of sewage a day being dumped onto Gaza’s beaches. Two weeks ago, UNRWA was forced to stop distributing food aid for several days after its vehicles ran out of fuel. More than 80 percent of Gaza’s population relies on humanitarian assistance, with UN food aid going to about 1.1 million people.

Once again, however, Israel’s inhuman and illegal actions against the Palestinians have served to increase support for Hamas and political Islam and have sickened the majority of Israelis who want a peaceful settlement with the Palestinians.

Social schisms

The last, and in may ways most important, factor in generating the public unease surrounding the anniversary is the phenomenal growth of social differences in Israel as a result of the free-market policies pursued by successive governments. Privatisation, pension, and welfare reform, budget and tax cuts, and deregulation have turned the dream of the egalitarianism and collectivism, once proclaimed as the raison d’etre of a national home for the Jews, into a nightmare.

Israel’s economy is entirely dependent upon financial support from the US and preferential trade agreements. Its high-tech industries, biotech, nanotech, smart materials, alternative energy and arms are geared towards the US and Europe. But while economic growth has been more than 3 percent a year for the last four years, Israel’s new wealth is highly concentrated. The Gini coefficient, measuring income inequality, has risen continually, ranking Israel as one of the most unequal states in the developed world.

A National Insurance Institute report published last February showed that 20 percent of families live below the poverty line. Measures taken to force people off welfare and into work have provided employers with a new pool of cheap labour so that in the past five years the proportion of working poor—families with at least one wage earner—has risen by a third. Poverty among children has grown, reaching 36 percent last year, in part as a result of changes to the benefit system.

The financial squeeze is affecting the middle-income groups as well. Home ownership is becoming increasingly unaffordable. New mortgages in 2006 were 50 percent lower than in 2003. Citizens’ advice bureaus are reportedly full of middle class people seeking legal and financial advice. As Yuval Elbashan, deputy manager of Yedid, a network of citizens groups, said, “The poor don’t have budgets to manage.”

Because Israel is so heavily dependent on Washington’s subventions, this situation is set to worsen dramatically as the economic crisis takes its toll on the US budget.

In addition to the growing social polarisation, Israel is split along ethnic, religious, and ideological lines. Fully 20 percent of the Israeli population are Arabs, who are treated as second-class citizens. Their refugee relatives cannot return to Israel, whereas Jews abroad automatically qualify for citizenship. They find it almost impossible to get jobs in industries proclaimed as “strategic,” such as electricity and water, or to lease land from the Jewish National Fund, despite a Supreme Court ruling in their favour. Their cities, towns and villages get less financial support from the state budget.

Israeli commentators are full of dire warnings of a demographic time bomb. The higher birth rate among Israeli Palestinians and those on the West Bank and Gaza means that within 20 years there will be more Palestinians than Jews in Israel and the Occupied Territories, threatening the Jewish nature of the state that is so central to Zionism.

There are also increasing conflicts between the religious and secular Jews in a country where the religious authorities control many aspects of social law such as citizenship, marriage and divorce. Far-right orthodox parties, and settler-based parties that play a key role in cobbling together coalition governments, have sought to extend the dictates of Jewish religious law over ever-wider areas of social life.

Those Jews whose families came from the Middle East and North Africa are also treated as second-class citizens, when compared to those from Europe. Among the 1 million immigrants from Russia are more than 300,000 non-Jewish immigrants. Amongst these layers, the growing social polarisation and political disorientation have led to the growth of Israel’s own neo-Nazi movement. There have been 500 incidents of attacks and abuse in the last two years and there are reportedly several hundred mainly young neo-Nazis in Israel. A few weeks ago, four young Russian immigrants were sentenced to between 18 months and four years for assault and racism after filming one another beating-up ultra-orthodox Jews and homeless people. Another four members of the gang face similar charges.

These social and political developments have undermined the central pillar of Zionism, its demand for national political unity against those deemed to be the external “enemies” of the Jewish people. As such, they threaten the country’s political and social stability.

Some of Israel’s most important institutions are coming under pressure. Its role as a subcontractor for US imperialism means ever-greater military expenditure and ongoing conflict with its neighbours, particularly Iran and the Palestinians. But there is a growing reluctance to join the army. One quarter of the young men and women called up for national service evade it, citing religious exemption or mental health problems. A growing number of reservists are refusing to fight on moral grounds.

There is also growing political, social and industrial unrest within Israel. The government is the representative of a corrupt and venal financial elite. It is widely reviled, with polls showing approval levels for Prime Minister Olmert at less than 10 percent. Olmert himself faces three investigations for corruption and could be charged as soon as the anniversary celebrations are over, making elections a near certainty.

All this is a far cry from the secure economic future that the Zionist dream seemed to offer the Jewish people 60 years ago. It is this that underpins the increasing disillusionment with Israel today.

A number of factors have led Israeli workers to identify with the Zionist state—particularly the Holocaust and Israel’s encirclement by hostile and despotic regimes. Despite this, there has always been—whatever the confusion within the working class—opposition to the oppression of the Palestinians and the desire for peace with their Arab neighbours. In the coming period, these sentiments will grow as class divisions within Israel become more pronounced.

Such objectives, together with the securing of a decent standard of living for all Israeli citizens, can only be achieved by unifying the Arab and Jewish working class, cutting across the ethnic, religious and national divisions fostered by the bourgeoisie. It means waging a common struggle against the Israeli and Arab ruling elites and for the building of the United Socialist States of the Middle East. The International Committee of the Fourth International seeks via the World Socialist Web Site to construct the leadership to accomplish this historic task.