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Where was Israel in January 2000? Benjamin Netanyahu had just been sent packing and Ehud Barak was soaring. After years in which the right had blocked peace and Shas had threatened enlightenment, the Israeli horizon was once again clear. The economy broke out of its prolonged recession and headed for an unprecedented period of growth. High-tech set new records, and expectations of prosperity reached new heights. A peace agreement with Syria was to be signed within a few months. A peace agreement with the Palestinians was to be signed by the summer. Israel was determined to leave behind its nationalist-religious past, join the rest of the world and strive for the future. The first decade of the third millennium stood to be a decade when conflicts, treading water and backwardness were to be ended. A decade of plenty and peace.

There was plenty of plenty in the past decade. In a certain sense, the story of the decade was the economic story. First the high-tech bubble burst, then Israel underwent a deep crisis that brought it to the edge of an abyss. But when finance minister Silvan Shalom and Benjamin Netanyahu set the Israeli market free, they freed the great creative energy latent in Israelis. So 2003 to 2008 were years of rapid growth, and the Israeli economy was even able to get through the crisis year 2009 successfully.

\The Israel of the past decade proved that when initiative and economic activity were concerned, it was still going strong. Even under the most difficult circumstances, the Israeli tiger did not stop loping forward.

But there has been no peace in the past decade. The Barak-Assad process was a failure and the Barak-Arafat process crashed. The Sharon-Arafat process produced a document that was not applied and the Olmert-Abbas process yielded a proposal that was not accepted. The Olmert-Assad process to this day has not borne fruit. Five separate peace processes have turned out to be futile. Even though Israel went a long way, it was not able to find a Palestinian partner for peace. Even though two Syrian presidents went a long way, they did not find an Israeli partner for peace. The desired peace with the Palestinians turned out to be an impossibility. The possible peace with the Syrians turned out to be not what was desired.

Contrary to the 1990s, which yielded two dramatic peace agreements, the years since 2000 have not produced even one. They yielded three wars.

In one of these wars, Israel won big. In the security sphere, Israel's biggest achievement of the decade was defeating terror. The price was heavy - intensifying the occupation, building the wall and neglecting to deal with threats from afar. But eventually Israel thwarted the suicide bombings that had rocked its cities and disrupted its way of life over three years. It achieved security and normalcy for its citizens.

In the decade's second war, Israel failed. The war of 2006 achieved a transient deterrent against Hezbollah, but this was not decisive. The result is that the threat from the north is higher. Likewise, Operation Cast Lead produced ambiguous results. The decade's third armed conflict demonstrated Israel's military prowess, but the Palestinians paid an insufferable humanitarian price while Israel paid a heavy diplomatic price. The decade's three bad wars did not distance us from the next war. They brought us closer.

The strategic invention of the last decade was the unilateral withdrawal. The withdrawal from Lebanon was unavoidable and was carried out in exemplary fashion but it, too, helped increase Hezbollah's strength. The Gaza disengagement lacked a diplomatic dimension and led to a gain in power by Hamas. On the one hand, the withdrawals expressed an insight that was late in coming, that the occupation was useless. On the other, they expressed a shortsighted view and an inability to deal with a complex strategic reality. As a result, at the end of the decade, Israel ruled over fewer non-Israelis than at the beginning. However, Israel at the end of the decade was far more threatened. The quiet it appeared to be enjoying was misleading.

On the first morning of the new decade there is no euphoria in Israel. Our economic and security strength creates a certain kind of self-confidence. But the challenges are unprecedented - the Iranian nuclear project, the missile threat, the occupation, the loss of legitimacy, the leadership crisis, the governability crisis, the social woes, the education collapse.

In an amazing way, the previous decade did not yield any substantial response to any of these challenges. It gave us a good life for the moment without having to contend seriously with our basic problems. The new decade will not be able to continue this regime. The processes that are eroding Israel's support walls have gone too far. Unless there is a sobering up and a change of direction, the next 10 years could be more difficult than the 10 preceding ones. To avoid waking up despondent on January 1, 2020, we have to wake up now.