A current and central concern for all those who are concerned with 'peace' in the Middle East is the manner in which the Israeli Labour Party will handle the politically negotiated peace settlement with the Palestinians, and thus fulfil its primary election pledge. In particular, such observers are concerned with the important implications of such a political settlement, which will necessarily entail a socio-economic, political and ideological 'restructuring' of the Israeli state and society. For, unlike previous political negotiations (Camp David Accords in 1979), this time the Israeli State is negotiating with the Palestinians and the Israeli Labour government in power has committed itself to making the compromises needed in order to achieve 'peace'. It is in this context, that Michael Shalev's original, comprehensive and critical political economy of the Israeli state and society achieves its significance. For Shalev's contribution to our understanding of the internal dynamics of Israeli society also enhances our ability to grasp both the nature and extent of the 'economic, political and ideological space' available to the Israeli government in its political negotiations with the Palestinians.