YEAR IN REVIEW 5749 YEAR IN REVIEW MIDEAST THE INTIFADA dragged on, becoming a way of life in Israel, draining the economy and dividing Israelis over the government and army's role in protecting the populace and quelling the violence. Resourceful settlers used screens to protect their autos from rock-throwers. ANGER AND ANXIETY increased in Israel as a result of the violence of the intifada, as some settlers blamed the army for failing to protect them. There were incidents of vigilantes roaming Arab areas, beating up civilians. 4 0" eta • ISRAELI FRUSTRATION boiled over at several funerals for Jewish victims of Intifada violence, and Prime Minister Shamir, shown here seeking the shelter of his car, was heckled by mourners. Continued From Preceding Page souls, by ensuring that the flow of Jews from Moscow to Jenisalem will continue and in- crease? With reports of at least 500,000 Soviet Jews prepared to leave for the West in the next 50 FRIDAY, SEPTEMBER 29, 1989 decade, the situation presents a true challenge to the Zionist dream — a challenge to make absorption, employment and socialization in Israel viable enough to attract new blood to a Jewish state grown weary from verbal and physical bloodletting. SHIMON PERES suffered a series of political setbacks this year. His Labor Party was outmaneuvered by Likud in forming a coalition after national elections and fared poorly in local elections;and his new post as Finance Minister has kept him out of key decision-making in the cabinet. A Defensive Israel For the most part, Israel was on the defensive this year, diplo- matically and militarily, strug- gling to combat new Palestine Liberation Organization prestige and ongoing intifada violence. Powerful images endure of Yassir Arafat shocking the world last winter when he final- ly uttered the magic formula— renunciation of terrorism, acceptance of United Nations Resolution 242 and recognition of Israel — after proclaiming a Palestinian state. And though there has been bitter debate over since over the veracity of that pledge, it was enough for Washington to open a dialogue with the PLO. In the Jewish world, Israel- Diaspora relations were shaken