January 11: Finance Minister Hurvitz resigns. His successor will be Minister of Communication Yoram Aridor. Prime Minister Menachem Begin proposes advancing the elections from November to June.
January 13: Minister of Communication, Yoram Aridor, announces that TV programs will be broadcast in color.
January 22: The one-shekel coin is put into use. The public is irritated by its tiny size.
February 1: The treasury announces tax reductions on cars and electrical appliances.
February 2 - 3: The Tel Aviv Stock Exchange crashes. Stocks drop by an average of 15%.
February 22, 24, 25: University lecturers and the entire educational system strike.
February: At a press interview, US President Ronald Reagan responds to a question on the Israeli West Bank settlement activity: "I disagreed with the previous administration referred to them as illegal; they are not illegal."
February: Deputy Prime Minister Yigael Yadin announces his retirement from political life and the dissolution of his political party, the Democratic Movement, when the term of the Knesset ends.
March: Strikes in all sectors continue throughout the month.
March: The ultra-Orthodox demonstrate in Jerusalem over the opening of a new traffic artery - the Ramot road - adjoining one od their neighborhoods. Thousands demonstrate on the Shabbat of 14 March at the Ramot road. Passing cars are stoned.
March 6 - 7: A Palestinian terrorist using a windsurfer infiltrates into Acco and takes a hostage. After a dramatic nightlong search, he is apprehended asleep in an Arab village in the Galilee while the hostage has escaped.
March 8: The Israeli freighter "Massada" sinks in the vicinity of the Bermuda Triangle with a loss of 24 crew members.
March 26: Maccabi Tel Aviv wins the European basketball cup for a second time, beating Sinudyne Bologna 80:79.
April: Following a Syrian bombardment of Christian strongholds on the Damascus-Beirut road, Foreign Minister Yitzhak Shamir declares: "Israel cannot sit idly by and watch Syrian troops massacre Lebanese Christians." A week later, Israeli troops attack Syrian-supported terrorist targets in Lebanon. Israel publicly acknowledges it is supplying Lebanese Christians "with means and equipment to protect themselves."
April 16: A hot-air balloon operated by Palestinian terrorists is brought down near Kibbutz Manara in the Galilee. The terrorists are killed.
April 20 - 21: Intensive skirmishes take place between Israeli forces and Palestinian terrorists in southern Lebanon. Israeli planes attack terrorist bases. The Upper Galilee panhandle is bombarded by Katyushas.
April 28 : Israeli warplanes shoot down two Syrian helicopters involved in a Syrian offensive against the Lebanese Christians. The Syrians deploy Soviet surface-to-air missiles in Lebanon's Bekaa Valley, posing a threat to Israeli aircraft. US special envoy Philip Habib spends the ensuing months attempting to resolve the crisis.
April 29: Syria positions S.A.6 antiaircraft missiles in Lebanese territory.
April: The Reagan administration decides to sell five airborne warning and control system planes (AWACs) and other military equipment to Saudi Arabia. Israel opposes the sale as a grave threat to its security.
May 19: US special envoy Philip Habib presents a proposal for the solution of the Lebanese problem and the Syrian missile crisis.
May: Prime Minister Menachem Begin demands that Syria remove its surface-to-air missiles from Syrian territory bordering Lebanon, as well as from the Bekaa Valley. He acknowledges that planned Israeli attacks on the missiles had been postponed at the urging of the US.
May 28: Israeli planes destroy Libyan antiaircraft missile positions on the outskirts of Beirut.
June 3: Prime Minister Menachem Begin declares in the Knesset: "Should the [Lebanese] Christians be attacked by the Syrian air force, we will help you with our air force", adding that the "security and survival" of Lebanon's Christians was of "vital interest" to Israel.
June 4 : Menachem Begin and Anwar al-Sadat hold a summit meeting at Sharm el-Sheikh.
June 7 : Israeli warplanes completely destroy Iraq's Osirak nuclear reactor near Baghdad. Prime Minister Menachem Begin justifies the preemptive attack because Israel believes that the Iraqis intend to produce atomic weapons and use them against Israel. Neither the US nor Egypt had advance information of the attack, which comes three days after the Begin-Sadat meeting and several weeks before the elections. The operation is criticized by Shimon Peres and Yitzhak Rabin, who describe it as an election ploy.
June 19 : The US joins other Security Council members in condemning the Israeli raid on the Iraqi nuclear reactor. An Israeli statement asserts it "will continue with all means available to it to protect its people and prevent its enemies from developing weapons of mass destruction.
June 30 : Israel holds national elections of the 10th Knesset, with 1,937,366 votes cast. Likud wins 48 seats; the Alignment 47 seats; and the National Religious 4 seats.
July 10 - 24: Violence flares in northern Israel and southern Lebanon, with Israeli attacks on terrorist targets in Lebanon and the PLO shelling of population centers in northern Israel. The town of Kiriat Shmonah is virtually abandoned and thousands of Galilee families are forced to dwell in air raid shelters. Israeli warplanes bomb PLO headquarters in Beirut. Several hundred persons are killed. In reaction, the US postpones delivery of F-16s to Israel. On 24 July, a cease-fire, arranged by US special envoy Philip Habib, takes place.
July: Israel, Egypt, and the US sign an agreement on the nature of multinational force that is to monitor security arrangements after Israel evacuates the Sinai in April 1982.
July: The feeling at the end of the month in Jerusalem is of military and political defeat. The IDF and the Israeli air force had failed to break the PLO in southern Lebanon.
August 3 : A dispute erupts between the archaeological activities at a site in Jerusalem's City of David. Orthodox authorities wish to halt the excavation because they believe the site to be an ancient Jewish cemetery. The Supreme Court will rule that excavation at the site is legal.
August 5: The new government is installed, with Menachem Begin Prime Minister, Ariel Sharon as minister of defense, and Yitzhak Shamir as minister for foreign affairs. David Levy is deputy prime minister.
August 7 : Saudi Crown Prince Fahd announces an eight-point peace plan for the Middle East to replace the Camp David Accords. It is rejected by Israel and the PLO.
August 24: A new power station at Hadera links up with the national grid.
August 25 : Menachem Begin and Anwar al-Sadat hold a summit meeting at Alexandria and discuss the resumption of autonomy talks.
Summer: The IDF general staff begins to improve two basic operational plans. "Little Pines" covers an invasion of southern Lebanon, designed to destroy the PLO military presence. Implicit is avoidance of a clash with the Syrians. "Big Pines" is a more invasive operation, reaching as far north as Beirut, and possibly also ejecting Syrian units from the southern and central Lebanon and the southern Beka'a. From the start Defense Minister Ariel Sharon pushes "Big Pines".
September 22: Talks on the autonomy of the West Bank and Gaza Strip resume between Israel and Egypt.
September 24 - 26: An Israeli missile boat runs aground off the Saudi coast. It is extricated after contact is made with the Saudis through the Americans.
September: Prime Minister Menachem Begin meets with US President Ronald Reagan in Washington. An agreement is reached on wide-ranging cooperation on military matters. The US will purchase 200 million dollars of Israeli-produced military equipment. In an apparent misunderstanding, Begin continues to denounce the proposed US sale of arms, including AWACs to Saudi Arabia.
September: The new Northern Command Operations Commander (OC), Major-General Amir Drori, is given both versions of the Invasion plans.
October 6 : Egypt's president Anwar al-Sadat is assassinated during a military parade marking the 8th anniversary of the Yom Kippur War. The assassins are Muslim fundamentalists opposed to Sadat's peace with Israel and his liberal interpretation of Islamic law. He is replaced by Vice President Hosni Mubarak.
October 10 : Prime Minister Menachem Begin attends Sadat's funeral in Cairo and later meets with President Mubarak. They pledge "to each other peace forever."
October 16: Moshe Dayan dies aged 66.
October 27: An Israeli-Egypt agreement on the completion of Israel's withdrawal from Sinai is signed.
October: Ariel Sharon declares in front of the General Staff that he supports the implementation of "Big Pines" and encourages the IDF and IAF to continue and increase their preparations for an Invasion of Lebanon that "includes Beirut".
November 1: The Hebrew University begins the academic year in its campus on Mount Scopus after a hiatus of over three decades.
November 8: A new military airfield in the negev, Uvdah, is inaugurated.
November 20: The first Israeli woman undergoes in vitro fertilization.
November 30 : Israel and the US sign a Memorandum of Understanding on Strategic Cooperation to deter Soviet threats in the Middle East. In response to Arab criticism, the US notes that the memorandum is not addressed to any other country than the Soviet Union.
December 1: The settlers of Yamit in northern Sinai barricade themselves in their settlement in protest against the scheduled evacuation.
December 7: Defense Minister Ariel Sharon visits the settlement of Yamit and promises to act on the issue of compensation.
December 14 : Israel adopts the Golan Heights law extending the "Israeli law, jurisdiction, and administration" to the Golan Heights. Although reported as a annexation, it is not: the Golan Heights are not declared to be Israeli territory.
December 18 : The US suspends a memorandum of strategic cooperation it signed with Israel on 30 November after Israel adopts the Golan Heights law.
December 20: Defense Minister Ariel Sharon submits "Big Pines" to the cabinet. He tells the ministers that the IDF does not intend to assault Beirut, this would be left to the Phalange. Prime Minister Begin demands that the plan is approved immediately. The cabinet, led by Interior Minister Yosef Burg, refuses.
December 23: A slash in subsidies of basic commodities result in cost-hikes of 20% - 25%.
December 24 - 25: Talks between the Yamit settlers and the minister of finance on the issue of compensation break down.
In 1981, Israel's annual inflation rate is 101.5%.
"Spiritual Resistance: Art from Concentration Camps, 1940-1945", a selection of drawings and paintings from the collection of Kibbutz Lohamei HaGetaot, is published.
A Museum for Jewish Art from Italy opens in Jerusalem. Mainly from the collection of U. S. Nahon, the museum houses almost 1,000 objects, including the original synagogue of Conegliano Veneto, which was built in 1701 and brought to Israel in 1952.
Ziva Amishai-Maisels, Israeli scholar of Jewish art, writes "Jacob Steinhardt: Etchings and Lithographs", which contains a classified catalogue of 246 etchings and lithographs. Jacob Steinhardt, painter and printmaker and an early disciple of German expressionism, left Germany for Palestine in 1933.
T. Carmi, Hebrew poet and historian, edits "The Penguin Book of Hebrew Verse", in which he traces the development of Hebrew poetry from biblical times to the contemporary period.
The Israel Museum in Jerusalem exhibits "Hebrew Micrography: One Thousand Years of Art in Script" and "The Jews of Kurdistan: Daily Life, Customs, Arts and Crafts."
The Museum of the Diaspora in Tel Aviv exhibits "La Nación" - The Spanish and Portuguese Jews in the Carribean"; "Jews from the Konkan: The Bnei Israel Communities in India"; "The Wonderful Island of Djerba: An Ancient Jewish Community on the Tunisian Coast"; and "The Jews in France under the Revolution and the Empire."