Israel's growing defense budget (about thirty-five to…

Israel's growing defense budget (about thirty-five to forty percent of GNP), along with rising world oil prices, has also created chaos in the Israeli economy.

Inflation is running at forty to fifty percent annually, wages are falling, and citizen accumulation of so-called black money (unreported income) is rampant.

The worsening economic situation leads to greater income disparities between the Ashkenazim, who dominate the higher echelons of government, the military, and business, and the majority Oriental population, which is primarily employed in low paying blue-collar jobs.

Economic grievances, corruption, and the perceived haughtiness of the Labor elite had led to a major shift in the voting patterns of Oriental Jews (those of African or Asian origin by the mid-1970s.

During the first twenty years of Israel's existence, Oriental Jews voted for the Labor Party mainly because Labor dominates the Histadrut, the Jewish Agency, and other state institutions on which they as new immigrants depended.

But even during the early years of the state, Labor's ideological blend of secular-socialist Zionism conflicted sharply with the Oriental Jews' cultural heritage, which tended to be more religious and oriented toward a free market economy.

As Oriental Jews have become more integrated into Israeli society, especially after the June 1967 War, resentment of Labor's cultural, political, and economic hegemony has increased.

Most unacceptable to the Oriental Jews is the hypocrisy of Labor slogans that continue to espouse egalitarianism while Ashkenazim monopolize the political and economic reins of power.

Oriental Jews, many of whom were forced to leave their homes in the Arab states, also support tougher measures against Israeli Arabs and neighboring Arab states than the policies pursued by Labor.

Their ill feelings are buttressed by the widely held perception that the establishment of an independent Palestinian entity will oblige Oriental Jews to accept the menial jobs performed by Arab laborers, as they had in the early years of the state.