One of the cynical political jokes making the rounds these days as Israel gears up for its general elections in May asks: "What was Jonah doing in the belly of the whale?"

The answer: "Trying to bring about change from within."

The black humor lies in the fact that there is more discontent with the system this election year than perhaps ever before and virtually every politician is promising reform. Yet never have domestic and bureaucratic problem seemed more all-encompassing and whale-like.

Despite the fact that Israel will face a major international effort toward a Middle East settlement soon after the election, it is more than likely that domestic issues will loom larger in the coming campaign than foreign affairs. There is a widespread feeling that, although there is little Israel can really do about OPEC, the Arabs or the Americans, Israel can and should try to put its own house in order before international challenges can be met.

Buffetted by repeated scandals and whiffs of corruption in high places, culminating in the dramatic suicide of a Cabinet minister in early January, the Israeli voter faces a 30 per cent inflation rate and a 5 per cent unemployment rate, a shockingly high figure in a country dedicated to the proposition of full employment. Repeated wildcat strikes and labor unrest have added to a growing sense of social decomposition. The number of Jews immigrating to Israel has dropped alarmingly - a statistic that strikes at the very heart of Zionism - and a top-heavy and inefficent bureaucracy seems to grow ever more unresponsive to the needs of the people.

Observers say it is virtually impossible for any one party or alignment to win a outright majority in the 120-member Knesset (Parliament) and the gloomy prognosis is that, no matter who wins, their plurality will probably be smaller than ever and the subsequent need for, and dependence, upon, coalition partners will be greater than ever. This does not bode well for those who would see a strong government emerging from the May elections and is another dimension of the whale that so many Israelis feel is swallowing them.

Some political analysts feel that Israel runs the danger of becoming like the French Fourth Republic - a state where the fragmentation of political parties guaranteed a succession of weak governments and political instability.

Since the founding fathers wrested independence from the British and defeated the combined Arab armies that sought to defeat a Jewish state 83 year ago, every Israeli government has been dominated by the Labor Party and its allies. Traditionally Labor could always count on cornering close to 50 per cent of the vote. Putting together a workable coalition was never difficult.

Moreover, the Labor Party itself enjoyed strict discipline with party lists being drawn up in smoke-filled rooms. There has never been anything resembling a primary system in Israel and the voters have had little to say about the candidates for whom they are asked to vote.

The writing was on the wall following the last election in 1973, however, when the Labor alignment's share of the vote slipped to about 30 per cent. This year, faced with so many economic problems and scandals, the Labor Party finds itself in serious trouble.

In December, Labor Prime Minister Yitzhak Rabin expelled Labor's traditional coalition ally, the National Religious Party, from the coalition, hereby precipitating the political crisis that caused him to hand in his resignation and call for early elections in May.

Today, for the first time in Labor's hitory, Rabin presides over a minority, interim government stripped of allied and unable to pass legislation - not even the government's own budget.

The government is in a shambles with three ministers belonging to the Religious Party, having been expelled, two more ministers belonging to another minority party serving as captives because the law requires them to stay on until elections, and a sixth minister Abraham Ofer, having committed suicide amid as yet-unproven charges of corruption.

For the first time in the party's history, a prime minister is being openly challenged for the party's leadership while he is in office. Both Defense Minister Shimon Peres and a former Former Foreign Minister Abba Eban hope to unseat Rabin at the Labor Party convention in late February.

The decline in the Labor Party's fortunes is not simply a matter of economic woes and domestic troubles, according to Herbert Smith, one of Israel's foremost political analysts, but also because of a political generation gap in Israel that is wider than that in the United States, To the older, over 45 generation, especially the generation that emigrated from Europe, party loyalties are very important. The Labor Party had a position here not unlike that held by the Democratic Party among immigrants in the big East Coast cities of the United States a couple of generations ago.

"Changing political parties in Israel used to be like changing your religion, "Abba Eban said recently, "A solemn and dramatic thing to do.But no more."

The younger generation "sabras," or native-born Israelis tend to be less religious, less party conscious and much more independent politically. According to Smith, 40 to 50 per cent of the voters this year are "up for grabs" and not committed to voting for any one party or bloc. As in tha United States, political personalities have become more and more important as party loyalities die.

Party loyalities were never as important to the Oriental Jews, who came from Middle Eastern and North African countries, and despite their growing numbers they are under-represented in the top government and party bureaucracies where the European immigrants hold sway. The younger Oriental Jews tend to vote against Labor according to Smith, in an anti-establishment vote.

The most clear-cut exception to the general decline of party loyalities is the Israeli Arab vote - that is, the vote among Arabs who are Israeli citizens, not the residents of the West bank and the Gaza who live under military occupation. The Israeli Arabs now make up about 8 per cent of the total vote and in recent years the Rakach or Communist, Party has been making great gains. As many as 40 per cent of Israeli Arabs could vote Communist this year - not because of any dedication to Marxism, but not of frustration against what they feel is second-class citizenship and discrimination in this predominantly Jewish land.

But if the overall trend is toward the breakdown of party loyalties and more Democratic selection of candidates, the political machinery has not yet changed enough to accomodate these trends. Therefore, it is likely that the next government to rule israel may end up in a weak position overly dependent on coalition allies.