ISRAEL'S 40TH ANNIVERSARY was planned as a year-long celebration but the Palestinian uprisings put a serious damper on the festivities. Some events were canceled and tourism from the U.S. was down, but an open-air concert by the Israeli Philharmonic (shown here) was well attended in Tel Aviv in April. ISRAEL THE SHIN BET, Israel's security services, came under scrutiny and reprimand for mistreating Arab prisoners. Here, the Landau Commssion presents its critical report to Prime Minister Shamir. 118 FRIDAY, SEPTEMBER 9, 1988 `GUILTY' was the verdict from an Israeli court at the conclusion of a year long trial of retired auto worker John Demjanjuk in Jerusalem. Convicted of Nazi war crimes as Ivan the Terrible, he was sentenced to death. NUCLEAR SECRETS revealed by a former Israeli nuclear technician to a British newspaper resulted in an 18-year jail sentence for Mordechai Vanunun, who was convicted of treason.