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These tent cities, transit camps, and development towns often became places of poverty,
alienation, and unemployment. Many of the immigrants faced downward mobility, having
lost all of their property in their homelands. Those from Europe had lost everything to the
Nazis and the postwar Communist governments; those from the Middle East had seen their
property taken by Arab governments or neighbors. Few were able to fi nd jobs in Israel's fl edg-
ling economy equivalent to those they had held before emigration.
The new state absorbed hundreds of thousands of immigrants during its fi rst fi fteen years
as best it could despite limited resources. Still, a sense of resentment and alienation prevailed
among the last wave of immigrants to arrive, especially among those from Morocco. Since
most of the better-off Jews from North Africa had gone to France, those who migrated to Israel
tended to be poorer and less educated. As late arrivals, they had more problems fi nding jobs
and housing, and they were sent to more remote places where living conditions were worse
than in other regions. Another grievance was the tendency of government offi cials —who were
sometimes high-handed and arrogant — to press them toward assimilation into a more Euro-
pean culture instead of maintaining their traditional Middle Eastern one.
This gap between European Jews and a part of the Middle Eastern Jews later led to friction.
Some considered that the many Mizrahi immigrants became a poorer, less infl uential “second
Israel.” The friction peaked in the 1970s and 1980s, becoming a political factor of importance,
although it diminished thereafter with political shifts, the broadening culture, and the demo-
graphic transition to a third generation, born in Israel, that often intermarried and had no
personal memories of the traumatic immigrant experiences.
Both immigrants and the native-born sought to build a new Israeli identity based on recon-
nection with the land, a goal exemplifi ed by the popular craze for archaeology. Throughout
Israel, groups of young people conducted amateur weekend archaeological expeditions. Their
chief ambition was to turn up artifacts related to the ancient Jewish presence in the Land of
Israel.
A rapidly growing population, together with the economic fallout occasioned by the War of
Independence, made austerity unavoidable in the 1950s. Support from Diaspora Jews helped,
especially from Jews living in the United States, but the state remained in diffi culties.
The issue of German reparations to Israel for the property lost and the suffering endured
under the Nazis, fi rst raised in 1950, aroused strong emotions. Some saw the very idea of ac-
cepting reparations so soon after the Holocaust as tantamount to taking blood money — that
is, as accepting the idea that money could compensate for the mass murder of European Jews.
The government took a different view, arguing that Germany had acquired a huge quantity of
Jewish assets after the war that should rightfully be in the hands of the people from whom it
had been stolen.
After initial talks between Jerusalem and Bonn, the Knesset approved further negotiations
in January 1951. These resulted in a March 1953 treaty in which Germany promised $820 mil-
lion to Israel. A structure was set up to deal with claims for individual restitution. The repara-
tions issue was an agonizing one for the young State of Israel— at one point resulting in a near
riot by opponents, led by the Herut Party —but the resulting payments provided a crucial
injection of funds into the Israeli economy at a time when this was vital.
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