Rabin relinquishes the prime ministership in April…

Rabin relinquishes the prime ministership in April during the electoral campaign, and steps down as leader of the Labor Party after it is revealed that he and his wife have maintained bank accounts in the United States, in violation of Israeli law.

He is replaced as party leader by Shimon Peres.

The Israeli cabinet continues to reject the participation of the PLO in the peace process but agrees not to look too closely at the background of Palestinians who might become members of delegations from Arab countries.

Likud Party leader Menachem Begin's vision of Israel and its role in the region are deeply rooted in the Revisionist platform with which he has been associated since the days of Jabotinsky.

He strongly advocates Israeli sovereignty over all of Eretz Yisrael, which in his view includes Jerusalem and the West Bank, but not Sinai.

Begin's campaign benefits immensely from Sephardic resentment over the patronizing attitude of the Labor establishment and its treatment of non-European Jewish immigrants as second-class citizens.

Begin appeals to many because he is viewed as incorruptible and untarnished by scandal.

He is a strong leader who does not equivocate about his plans for a strong Israel (which he believes includes the occupied territories), or about his willingness to stand up to the Arabs or even the superpowers if Israel's needs demand.

Begin also attracts some veteran Labor Zionists for whom his focus on Jewish settlement and self-reliance is reminiscent of an earlier unadulterated Labor Zionism.