By Aluf Benn
Sunday, June 10, 2007

JERUSALEM Something is rotten in the state of Israel. "The lone democracy in the Middle East," as we Israelis proudly call our country, is stumbling from crisis to crisis, and the one that underpins them all is a crisis of leadership.

It's a striking bind for the nation to find itself in 40 years after the Six-Day War of 1967 ushered in an era of high certainty and swagger. Israel's political class is on the verge of imploding -- leaving behind a scandal-ridden country whose top general rushes to dump his stock portfolio on the eve of a war, where once-despised politicians again become serious contenders for the prime ministership after voters threw them out, where an almost universally disliked leader such as Prime Minister Ehud Olmert still manages to hang on.

Perhaps that's why the image of invincibility that Israel enjoyed since the Six-Day War feels so tattered. The public is painfully aware of the Israeli military's failure to defeat several hundred guerrillas from the radical Lebanese militia Hezbollah, as well as its ongoing inability to stop Hamas from firing rockets into the Israeli border town of Sderot from the Gaza Strip. The army now warns of another war this summer, this time with Syria, while the threat of a nuclear-armed Iran looms. No wonder that, despite a booming economy and a sharp reduction in terrorist attacks, many Israelis are fearful about the future.

Throughout this time of genuine danger, our leaders have been sullied by scandal upon scandal. The list of infamy is unbelievable: President Moshe Katsav, a soft-spoken, shadowy politician, stands accused of raping his female former secretaries and has been forced to take a leave while he waits to hear whether he will be indicted. Olmert awaits investigation of petty corruption suspicions relating to his previous ministerial posts. Former justice minister Haim Ramon, a great charmer and rising political star, was convicted of forcibly kissing a young female army officer. Finance Minister Avraham Hirschson, now suspended, is being investigated on suspicion of embezzlement.

Add to that bureaucrats from Israel's Tax Authority, along with Olmert's office manager, who have been arrested and face probable indictments in connection with corruption; the national police chief and his designated successor, who were hounded from office by old scandals; the resignations in the military's high command after its disastrous handling of the summer 2006 war in Lebanon; and a cabinet nominee who turned out to have faked her university degrees. Instead of rising to the challenge of securing the country, ending our occupation of Palestinian territory and growing the economy, Israel's leaders are busy defending themselves from the wrath of the criminal justice system.

What went wrong?

First, there's the very structure of Israel's democracy: In a state without a constitution or strong institutions, where the only checks and balances are the supreme court and commissions of inquiry, and where the life expectancy of governments is barely two years, strong personalities have an enormous advantage. Consider Israel's commanding former prime minister Ariel Sharon (a.k.a. "the Bulldozer"), who held the country in awe; then consider his successor, the less charismatic Olmert, who can barely stay afloat.

Second, public life has come to seem so corrupt that careers in business have much more appeal. Because our best and brightest increasingly view politics as a dirty game, it's no surprise that we have so few fresh leadership candidates -- and so many buoyant businesses.

Third, the endless Arab-Israeli conflict has taken its toll, leading right- and left-wingers to opposing conclusions about how to run the country. The right accuses "the Tel Aviv bubble" of going soft, of having lost its Zionist zeal. The left argues that the West Bank settlers have taken the country hostage to their narrow-minded, messianic ideology. The endless bickering breeds paralysis and drives sensible people to a hatred of politics.

The central irony here, of course, is that the great strength of democratic systems is their ability to be supple, resilient and above all adaptable. That's the theory. But in Israel today, we've replaced regeneration with deja vu.

To understand the current state of affairs, consider the hub of Israeli politics: the Knesset members' cafeteria in Jerusalem. It's a medium-sized hall with about 15 tables, a kosher lunch buffet and wonderful vistas of Israel's capital. One day last week, Binyamin Netanyahu, the leader of the right-wing Likud Party, sat near a window, smiling as he downed a plate of salmon. Bibi (as everyone calls him) was in high spirits: If elections were held tomorrow, he would be the sure winner. Pollsters don't even bother to measure Olmert's approval rating anymore; one March survey gave the hapless prime minister just 3 percent support.

Across the room sat Vice Premier Shimon Peres, eating a schnitzel and contemplating his next political moves with two aides. Peres, soon to turn 84, just announced his candidacy for the largely ceremonial job of state president, to be chosen by the Knesset on Wednesday. "This may be my last contribution," said the serial election loser, who entered political life when FDR was running the United States.

Around the same time, in the back room of a Tel Aviv office building, Ehud Barak convened his campaign team. After several years as a global business consultant, he has again set his sights on running the left-leaning Labor Party, and on Tuesday, the architect of the disastrous 2000 Camp David summit will face off in a neck-and-neck primary runoff with a newcomer to politics, Ami Ayalon.

One cannot escape the feeling of stagnation. Peres, Netanyahu and Barak each served as prime minister between 1996 and 2001, and each was promptly voted out. Now the three has-beens are preparing their comebacks. This would be unthinkable in the United States -- imagine Gerald R. Ford, Jimmy Carter and George H.W. Bush running again in parallel -- but Israeli politics follow different rules. The first law of Israeli politics is, "Every failure is the starting point for the next race." And the second law is, "Persistence will eventually pay off."

One prime example is Olmert. In April, the Winograd Commission, established by the premier to investigate last year's war in Lebanon, repeatedly cited Olmert's "failures" and charged that he had rushed to war against Hezbollah with the unattainable goal of fighting until the radical Shiite militia returned the two Israeli soldiers it had captured in a July 2006 raid. In a system where the division of powers is only theoretical, commissions such as Winograd's serve as a purging mechanism to get rid of failed leaders and military commanders -- but our political system is so weak now that Olmert refused to take the hint. He may hang on for another year.

Meanwhile, Israel's private sector shrugs off the meltdowns in our public life. The economy has shown record performance in the past year, despite the Hezbollah war and the ensuing defense-budget increases. Tel Aviv's stock market is rising from peak to peak almost daily. (It rose even during the recent war in Lebanon; the military chief who had sold his shares at its outbreak lost money.) Twenty years ago, we had no billionaires; now we have 11. Foreign investment is pouring in, sensing no special risk in Israel. So Israelis seem to have finally found a way to cope with the uncertainties of security risk and political chaos. If you're looking for leadership in Israel today, don't look in the Knesset; try the stock exchange.

aluf@haaretz.co.il

Aluf Benn is the diplomatic editor of the Israeli newspaper Haaretz.