Dear Friends,

As we approach Rosh Hashanah 5759, I want to wish you a good year, a year of peace and prosperity for the Jewish people everywhere.

It is characteristic of our people that we do not consider the onset of the new year an opportunity to revel. Instead, we review the past year with trepidation, and look forward to the next with awe and determination to improve. This applies to governments as well as to individuals.

Today, I believe we can view the achievements of this government with some satisfaction. We have managed to stabilize the economy by dramatically bringing inflation down, privatizing publicly owned enterprises at an unprecedented pace, attracting more foreign investments than ever, and deregulating the currency. In the world's economic turmoil we have remained an isle of stability.

We have also addressed ourselves to one of the most troubling problems in Judaism — the proposed conversion law and its ramifications. For the first time since the establishment of the state, we have attempted to find a solution which will avoid the need to resort to litigation and legislation. The recommendations of the commission headed by Ya'acov Ne'eman should form a basis for progress in the direction of unity and cooperation.

In the past year the government has devoted considerable time and energy to the peace process. We are committed to the Oslo and Hebron agreements and we have made clear our readiness to make the concessions required by these agreements. But we have also insisted that the Palestinians comply with the commitments they have been making for five years now, particularly in the fight against terrorism, both by word and deed. It is time they rejected the Palestinian Covenant which calls for Israel's destruction, and it is time they cracked down on the infrastructure of the terrorist organizations which now operate openly and freely in the Palestinian Authority areas.

Despite the difficulties which are an inevitable part of such a complicated process, I have no doubt that we shall achieve peace with security for Israel and our neighbors. I also hope that with the help of the democracies we will also be able to remove the dangers to world peace posed by the predatory regimes in the region.

We have good reason to be proud of the state's achievements as we enter its second half-century and approach the 21st century. But we must not forget that the realization of the Zionist dream — the ingathering of the Jewish people in the land of Israel — is not yet complete. Our goal for the next decade must be to have a majority of the Jewish people living in Israel.

The challenges we face are still formidable. To meet them, we must be united in purpose, strong in resolve and unbending in faith.

I wish you all a year of peace, security, health and happiness.