More than 40,000 people took part in a mass rally in central Tel Aviv’s Rabin Square on Saturday night to demand an end to the government’s free market policies that have resulted in soaring prices and increasing poverty and social inequality.

Demonstrators carried banners saying, “The people demand public housing” and “The people demand a bigger budget”. The influence of the Occupy Wall Street movement was to be seen everywhere with placards saying “We are the 99 percent”. Another said, “Occupy Oakland”, the Californian city.

Speakers called on Prime Minister Benyamin Netanyahu “one last time to answer the demands of the people”—i.e. for a “social budget” with greater spending on social and public services.

Protest leaders called for a “people’s strike” on November 1. Their statement described it as “an additional stage in the historic struggle for social justice…. [W]e will all go on strike because of our individual distress, but also in order to show solidarity with the hardships of others.”

Many of the roads in the city centre were closed, and there was a heavy police presence. Two people were arrested when scuffles broke out after the police moved three men wearing blindfolds lying down in the street.

Smaller rallies took place in Haifa, Jerusalem, Eilat, Kiryat Shmona and Rishon Lezion. In Jerusalem, about 5,000 demonstrators marched to the Knesset, Israel’s parliament, carrying placards saying, “We won’t be satisfied with crumbs” and “When the government is against the people, the people are against the government.”

Although a protest rally was planned for the southern city of Be’er Sheva, the Home Front Command banned all rallies in the area, citing the danger from rockets fired from the Gaza Strip after Israeli air strikes early on Saturday afternoon killed five members of the Al-Quds Brigades, Islamic Jihad’s armed wing, and critically wounded another three.

Saturday’s rallies were a continuation of the social protest movement that erupted last July with the establishment of a tent city on Rothschild Boulevard in Tel Aviv, which then spread rapidly to other towns and cities. They called for opposition to social inequality and the domination by Israel’s oligarchs, a dozen or so billionaire families, over economic and political life.

The rallies are the first since the 450,000-strong demonstrations on September 3, the largest in Israel’s history. But there is no avoiding the fact that Saturday’s demonstrations were the smallest since the movement began, less than half the organisers’ anticipated 100,000, despite their efforts to publicise the rallies both with posters and via social media. They were also the most muted. According to Gideon Levy in Ha’aretz, the demonstrators were predominantly from Tel Aviv’s better-off layers.

How is this to be explained? Israel’s social crisis has not gone away. Far from it. Prices continue to rise, with a government-mandated 10 percent hike in electricity prices just the latest blow to hard-pressed families. There are long running conflicts over wages and conditions in the hospitals and universities.

Resident hospital doctors have been locked in a bitter dispute with the government over their pay and conditions. They want the agreement, signed last August on their behalf by the Israel Medical Association, overturned. When hundreds of residents tendered their resignations en masse, the government turned to the National Labour Court to outlaw the mass resignations, leading to a mass protest last Monday night.

Yesterday, the start of the new academic year at Israel’s universities and colleges, junior faculty labour unions called a one-day strike in protest over their pay and working conditions. In the last 15 years, Israel’s universities, like their counterparts elsewhere, have come to rely on casual labour and non-tenured staff, who now make up about half the total staff, for the bulk of the teaching.

The 11,000 junior staff are demanding an end to short-term contracts that provide no employment security, and an additional budget for higher education of NIS 60 million to provide better conditions and prospects.

The Netanyahu government has sought to diffuse the movement in a number of ways. It commissioned Professor Manuel Trajtenberg to try to engage the leaders of the social protest movement in a “national dialogue” and come up with some cosmetic reforms while keeping to the overall budget framework. Trajtenberg’s recommendations will do little to address social problems, least of all the high cost of housing that sparked the protests.

The government has also resorted to its tried and tested method of stoking up nationalist and “existential” fears by staging military provocations against Palestinian militants in Gaza. The authorities used the excuse of possible Palestinian retaliation to ban rallies in August and again on Saturday.

The authorities have also made it harder to organise demonstrations. The Tel Aviv municipality demanded NIS 35,000 towards the cost of policing the crowd, plus a NIS 10,000 deposit to cover any potential damage.

But crucially, the “no politics” stance of the protest movement’s leaders has served to confuse and behead the mass movement.

Firstly, the leaders reject any connection between attacks on living standards and the government’s anti-Arab policies. Secondly, they insist on keeping the protest movement non-political, restricting their demands to vague calls for “social justice” and a “welfare state”. This is justified in terms of appealing to all layers of Israeli society, so as not to antagonise the ultra-nationalists and the settler and religious movements.

To this end, they opened the movement up to organisations headed by former Labourites, as well as the Meretz party, the Stalinist Hadash and the Histradut labour federation, which like its counterparts elsewhere, has sold out countless struggles and this year alone has called off several national strikes of public sector workers against budget cuts.

The leaders also welcomed the participation of several mayors, including those of Tel Aviv and Jerusalem, and various local authorities, all of which have carried out the government’s attacks on social and welfare programmes, and later were to close down the tent cities that they supposedly supported.

The protest leaders are determined to keep the demonstrations from posing a challenge to the Netanyahu government, the most right-wing in Israel’s history, while channeling opposition behind Kadima, Labour and other official opposition parties, which are seeking to take political advantage of the movement for their own ends.

While Stav Shafir, one of the student leaders who organised the tent city protests, in a recent interview with Ha’aretz, lambasted Netanyahu, neither she nor any of the other activist leaders are seeking Netanyahu’s removal from office. Shafir said, “The change must be systematic; it is not personal. The ideology of privatisation, of reducing public allocations and of selling society’s resources does not belong to any single individual. The public is seeking a new ideology.” She told Ha’aretz that social issues would dominate in the next national elections, whenever they are held.

Such views represent a political dead end for protesters and the Israeli working class, whose demands can only be met by bringing down the Netanyahu government and fighting for a workers’ government based on socialist policies.

As the protests around Tel Aviv grew throughout July and August, the efforts to avoid a confrontation with the government led the organisers to focus them on smaller cities and scatter the movement from the largest urban area. They billed the mass rallies at the beginning of September as the “climax” of the movement. What they meant was that this was the end—there were no plans for further action.

The leader of the National Union of Students, Itzik Shmuli, who works closely with Ofer Eini, the leader of the Histadrut trade union federation, called for the tent cities to be dismantled. This was a signal to the authorities that they could move in and close them down without any organised opposition, which they promptly did.

The Histadrut leader is on record as saying, “I will not support a movement which aims to humiliate a democratically elected prime minister and bring about his downfall. We are not in Egypt or Syria.”

There is no way forward for workers protesting social inequality outside of a struggle against the Netanyahu government and the policies of imperialism throughout the Middle East, including the Zionist state’s oppression of the Palestinians. The central issue facing workers in Israel is how to turn this social movement into a politically conscious struggle.

This means the building of a new revolutionary leadership in the working class—a section of the International Committee of the Fourth International in Israel to unite Jewish and Arab workers in a struggle for a Socialist Federation of the Middle East.