With the year 2010 around the corner, Israelis are looking forward to continued calm and economic development in the new year.

However, as far as the Israeli-Palestinian peace process is concerned, the prospect for reaching a peace deal in the new year remains nothing but elusive.

Hope for continued calm

The year of 2009 has been a key one for people living in Sderot, an Israeli town just a mile or so away from the Hamas-controlled Gaza Strip, as Israel's Operation Cast Lead in Gaza, which was launched on December 27, 2008 and concluded about three weeks later, almost brought to an end the thousands of rockets that were fired from Gaza towards Israel during the previous eight years.

Following Operation Cast Lead, residents of Sderot and other nearby towns and villages heaved a collective sigh of relief.

People were able to do something for the first time in some eight years -- they could shop, walk in the streets, picnic in the local park, allow their children to meet friends -- all without having to wonder where the nearest bomb shelter was located.

Shalom Qatar, a 15-year-old boy living with his family in Sderot, ended years-long sleep in his parents' bed amid fears of the rockets.

His mother Batya Qatar said, "since Cast Lead there've been over 300 Qassam rockets, which is more than enough, but it is very different from what there were prior to the operation."

She said she and many others just hope that the new year brings peace and calm, not only to Israelis but also to their neighbors so that maybe for once, the region can know no bloodshed.

While the Qatar family and other residents of this backwater of Israel are feeling somewhat more relaxed a year after Operation Cast Lead, concerns still existed.

They also fear that 2010 or some point further into the future will bring with it a return of the violence.

"We all know (the Palestinians) are rearming via the tunnels and the ships and that more sophisticated weaponry are getting to them. I really believe they're just waiting for the appropriate moment," said Qatar.

Escaping global recession

While 2009 was a year of despair for many of the world's economies, Israel escaped the global financial crisis with a few scratches but no deep wounds.

For Israeli economists such as Professor Arie Melnik of the University of Haifa, the last 12 months have been an "interesting" period.

While Melnik's Department of Economics introduced a couple of new courses dealing with aspects of the downturn in the world economy, he really felt little effect in Israel from global events.

"We weren't affected because our financial sector didn't hand out the bizarre loans the Americans and Europeans distributed," he said.

Israeli exports also survived the year, because they are items in demand overseas, Melnik explained.

Israeli products in a variety of industries are market leaders and those areas were carefully chosen by Israeli entrepreneurs because they are sectors that are unlikely to contract in the near future.

Night vision equipment is always needed by the world's armies, for example. Israel's drip-irrigation systems are purchased the world over. The same can be said for much of Israel's high-tech industry, which is extremely diversified, so even if one area suffers because of international factors the other areas will not, said Melnik.

Looking ahead, Melnik expects unemployment to continue to fall in 2010, with other key indicators of Israel's macro-economy remaining positive.

The one area where Melnik does perceive there to be an issue is the growing gap between Israel's rich and poor. A report published on Sunday pointed to the increased gap between the richest 10 percent of Israelis and the rest of the population.

Melnik said this has been the result of government policy over the last 20 years and while no one government would admit to it being the direct result of policy, it is clear that is the case.

He also believes the Israeli brain drain will continue. While Melnik said he is committed to Israel, he sees other more poorly paid academics being tempted to the United States and elsewhere, where salaries are more competitive.

Diplomatic impasses

The last year proved to be one in which Yigal Palmor slept less than he would have liked.

The multilingual spokesman of Israeli Foreign Ministry was kept busy with Operation Cast Lead, the damning Goldstone report on the Gaza offensive, legal efforts against Israel around the world and with the small matter of the Israeli-Palestinian peace process the international community would like to see rebooted.

Israel was particularly incensed by the Goldstone report, which suggested Israel might have been guilty of war crimes in its Gaza operation. From Palmor's perspective, the media coverage that went with the 500-page document was also problematic.

"On the whole the reportage was on very surface level and was very difficult to deal with factually," he said.

Looking back on 2009, Palmor felt it is too early to judge US President Barack Obama's impact on the region, saying that only those with the "Twitter here and now mentality" are prepared to judge him.

The fruits of Obama's attempts to bring Israel and the Palestinians back to the negotiating table are yet to be seen.

The Israeli-Palestinian peace talks have been suspended since Operation Cast Lead and there has been little sign of an early resumption of the talks.

While not keen to don the hat of prophet, Palmor believes the characters who will shape his agenda for 2010 and indeed that of the rest of the country will be the same as in 2009.

"There's no doubt that Hamas' campaign against Israel and that of its supporters will continue. It's clear there's an ongoing problem in the peace process with the Palestinians. The Iranian nuclear situation isn't going to change. The basic diplomatic components aren't going to change but I can't tell you what the specifics will be," said Palmor.

For Israel, every year presents new challenges.

In its 61 years since independence, Israelis have seen more than enough wars and terrorism to make them realize these are threats that will continue to dog the country for the foreseeable future.

As Palmor pointed out, what changes from year to year are the minutiae.

In Israel the macro is already mapped out, but the micro is unpredictable in one of the most tumultuous places in the world.

(Xinhua News Agency December 29, 2009)