HISTORY: Israel was founded in 1948 after the Holocaust as a haven for Jews on part of what was their biblical homeland. At the time, the area was British-ruled Palestine and inhabited largely by Arabs, many of whom opposed a Jewish state. The Palestinians hope to establish their own state in the West Bank and Gaza as a result of Arab-Israeli peacemaking.

LAND DISPUTE: In the 1967 Middle East war, Israel captured the West Bank, the Gaza Strip and the Golan Heights. It has annexed the Golan, which Syria wants back in exchange for peace. Two-thirds of Gaza and about a quarter of the West Bank have been handed over to the Palestinian Authority since the 1993 Israel-PLO peace agreement.

POPULATION: At the end of 1995, Israel's population was 5.65 million. About 82% are Jewish and almost all the rest are Arabs, including 750,000 Muslims, 150,000 Christians and 90,000 Druse. The Arab population of the West Bank is estimated at about 1.2 million and that of Gaza at about 800,000.

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