1. During this period Arab refusal to recognise the existence of a Jewish State of Israel continued, and the policy of all Arab governments was to seek Israel’s destruction. After the war of 1948-9, however, Israel’s main security concerns arose out of attacks by irregular forces against civilian targets within Israel. These forces operated from neighbouring states, with bases in the “West Bank” of the Jordan River under Jordanian rule and in Gaza, administered by Egypt.
2. As yet no “Palestinian” identity had emerged. The central issue was the “Refugee question”. The plight of refugees in the UNWRA camps, and the refusal of their Arab host countries to absorb them, created a humanitarian tragedy.
3. The Arab citizens of Israel enjoyed better economic conditions than the refugees or their other Arab neighbours. However the emergency situation meant that they were subject to legal restrictions under a “military government”. There was also financial discrimination in the provision of infrastructure for the Arab towns and villages.
4. The successive Israel Labour governments from 1948 to 1967 operated within a democratic socialist framework in which many of the larger industries were operated by the Trade Union movement, and most agricultural enterprises were co-operatively owned. Throughout this period the country faced severe economic problems. The cost of both absorbing hundreds of thousands of immigrants and spending on defence, and consequent debt service, resulted in almost permanent state of currency depreciation and runaway inflation.
5. The situation was exacerbated by the economic boycott enforced by the Arab League. This took the form of both a direct refusal to trade with Israel and a more serious “secondary boycott” under which companies trading with Israel were themselves boycotted by the members of the Arab League.
6. By the 1950’s the Soviet Union, which had supported Israel in 1948, became active in supporting the Arab countries and encouraging them to attack. It supplied arms, including tanks and sophisticated aircraft, and military advisers, to Syria and Egypt. Meanwhile Israel looked to France for military supplies, and only later to the United States.