quality:correction, linguistic:translation, information:extraction
Peace process

The 1977 Knesset elections marked a major turning point in Israeli political history as Menachem Begin 's Likud party took control from the Labor Party. Later that year, Egyptian President Anwar El Sadat made a trip to Israel and spoke before the Knesset in what was the first recognition of Israel by an Arab head of state. Sadat and Begin signed the Camp David Accords (1978) and the Egypt–Israel peace treaty (1979). In return, Israel withdrew from the Sinai Peninsula and agreed to enter negotiations over autonomy for Palestinians in the West Bank and the Gaza Strip.

On 11 March 1978, a PLO guerilla raid from Lebanon led to the Coastal Road massacre. Israel responded by launching an invasion of southern Lebanon to destroy PLO bases. Most PLO fighters withdrew, but Israel was able to secure southern Lebanon until a UN force and the Lebanese army could take over. The PLO soon resumed its insurgency against Israel, and Israel carried out numerous retaliatory attacks.

Meanwhile, Begin's government provided incentives for Israelis to settle in the occupied West Bank, increasing friction with the Palestinians there. The Jerusalem Law (1980) was believed by some to reaffirm Israel's 1967 annexation of Jerusalem by government decree, and reignited international controversy over the status of the city. No Israeli legislation has defined the territory of Israel and no act specifically included East Jerusalem therein. In 1981 Israel effectively annexed the Golan Heights. The international community largely rejected these moves, with the UN Security Council declaring both the Jerusalem Law and the Golan Heights Law null and void. Several waves of Ethiopian Jews immigrated to Israel since the 1980s, while between 1990 and 1994, immigration from the post-Soviet states increased Israel's population by twelve percent.

On 7 June 1981, during the Iran–Iraq War, the Israeli air force destroyed Iraq's sole nuclear reactor, then under construction, in order to impede the Iraqi nuclear weapons program. Following a series of PLO attacks in 1982, Israel invaded Lebanon to destroy the PLO bases. In the first six days, the Israelis destroyed the military forces of the PLO in Lebanon and decisively defeated the Syrians. An Israeli government inquiry (the Kahan Commission) held Begin and several Israeli generals indirectly responsible for the Sabra and Shatila massacre and held Defense minister Ariel Sharon as bearing "personal responsibility". Sharon was forced to resign. In 1985, Israel responded to a Palestinian terrorist attack in Cyprus by bombing the PLO headquarters in Tunisia. Israel withdrew from most of Lebanon in 1986, but maintained a borderland buffer zone in southern Lebanon until 2000, from where Israeli forces engaged in conflict with Hezbollah. The First Intifada, a Palestinian uprising against Israeli rule, broke out in 1987, with waves of uncoordinated demonstrations and violence in the occupied West Bank and Gaza. Over the following six years, the Intifada became more organized and included economic and cultural measures aimed at disrupting the Israeli occupation. Over a thousand people were killed. During the 1991 Gulf War, the PLO supported Saddam Hussein and Iraqi missile attacks against Israel. Despite public outrage, Israel heeded American calls to refrain from hitting back.

In 1992, Yitzhak Rabin became prime minister following an election in which his party called for compromise with Israel's neighbours. The following year, Shimon Peres on behalf of Israel, and Mahmoud Abbas for the PLO, signed the Oslo Accords, which gave the Palestinian National Authority (PNA) the right to govern parts of the West Bank and the Gaza Strip. The PLO also recognized Israel's right to exist and pledged an end to terrorism. In 1994, the Israel–Jordan peace treaty was signed, making Jordan the second Arab country to normalize relations with Israel. Arab public support for the Accords was damaged by the continuation of Israeli settlements and checkpoints, and the deterioration of economic conditions. Israeli public support for the Accords waned after Palestinian suicide attacks. In November 1995, Yitzhak Rabin was assassinated by Yigal Amir, a far-right Jew who opposed the Accords.

During Benjamin Netanyahu's premiership at the end of the 1990s, Israel agreed to withdraw from Hebron, though this was never ratified or implemented, and signed the Wye River Memorandum, giving greater control to the PNA. Ehud Barak, elected Prime Minister in 1999, withdrew forces from Southern Lebanon and conducted negotiations with PNA Chairman Yasser Arafat and U.S. President Bill Clinton at the 2000 Camp David Summit. Barak offered a plan for the establishment of a Palestinian state, including the entirety of the Gaza Strip and over 90% of the West Bank with Jerusalem as a shared capital. Each side blamed the other for the failure of the talks.