UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-K

[X]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT OF 1934 for the fiscal year ended DECEMBER 31, 2006
                                       OR
[ ]     TRANSITION REPORT  PURSUANT TO  SECTION  13 OR 15(d) OF  THE  SECURITIES
        EXCHANGE ACT OF 1934 for the transition period from           to


                        Commission File Number: 000-17202


                              GOVERNMENT TRUST 1-D
             (Exact name of registrant as specified in its charter)

         Illinois                                            36-6889513
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                            Identification No.)


The Bank of New York Trust Company, NA
(formerly JPMorgan Trust Company, NA), Trustee
2 North LaSalle Street, Suite 1020
Chicago, Illinois                                               60602
(Address of Principal Executive Offices)                     (Zip Code)

Registrant's telephone number, including area code: (312) 827-8617

Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the  registrant is a well-known  seasoned  issuer,  as
defined in Rule 405 of the Securities Act.  Yes [ ]  No [X]

Indicate  by  check  mark if the  registrant  is not  required  to file  reports
pursuant to Section 13 or Section 15(d) of the Act.  Yes [ ]  No [X]

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.  Yes [X]  No [ ]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K (229.405 of this chapter) is not contained  herein,  and will
not be contained,  to the best of registrant's knowledge, in definitive proxy or
information  statements  incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.  [X]

Indicate by check mark whether the registrant is a large  accelerated  filer, an
accelerated  filer, or a  non-accelerated  filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12-b-2 of the Exchange Act.

Large accelerated filer [ ]   Accelerated filer [ ]   Non-accelerated filer [X]

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Act).  Yes [ ]  No [X]

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates  computed by reference to the price at which the common equity
was last sold, or the average bid and asked price of such common  equity,  as of
the last business day of the registrant's most recently  completed second fiscal
quarter.  NOT APPLICABLE

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.  NOT APPLICABLE

Documents Incorporated by Reference: NONE

<PAGE>

                                     PART I

Item 1.  Business.

         NOT APPLICABLE

Item 1A. Risk Factors.

         NOT APPLICABLE

Item 1B. Unresolved Staff Comments.

         NONE

Item 2.  Properties.

         NOT APPLICABLE

Item 3.  Legal Proceedings.

         NONE

Item 4.  Submission of Matters to a Vote of Security Holders.

         NONE

                                    PART II

Item 5.  Market for Registrant's Common Equity,  Related Stockholder Matters
         and Issuer Purchases of Equity Securities.

         Certificate Holders as of December 31, 2006, Trust 1-D: 1,401

Item 6.  Selected Financial Data.

         NOT APPLICABLE

Item 7.  Management's Discussion and Analysis of Financial Condition and
         Results of Operation.

         NOT APPLICABLE

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

         NOT APPLICABLE

Item 8.  Financial Statements and Supplementary Data.

         See Item 15. Exhibits, Financial Statement Schedules.

Item 9.  Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosure.

         NONE

Item 9A. Controls and Procedures.

         As indicated in the  certifications in Exhibit 31.1 of this report, the
         Trustee has evaluated the  Trust's  disclosure  controls and procedures
         as of  December  31,  2006.  Based  on  that  evaluation,  the  Trustee
         concluded  that the Trust's  disclosure  controls  and  procedures  are
         effective in ensuring that material information required  to be in this
         annual report is made known to it on a timely basis.

Item 9B. Other Information.

         NONE


<PAGE>

                                    PART III

Item 10. Directors, Executive Officers and Corporate Governance.

         NOT APPLICABLE

Item 11. Executive Compensation.

         NOT APPLICABLE

Item 12. Security Ownership of Certain Beneficial Owners and Management and
         Related Stockholder Matters.

         NOT APPLICABLE

Item 13. Certain Relationships and Related Transactions, and Director
         Independence.

         NONE

Item 14. Principal Accounting Fees and Services.

         Deloitte & Touche 2006 Auditor Expense = $24,234.96


                                    PART IV

Item 15. Exhibits, Financial Statement Schedules.

         The following documents are filed as part of this report:

         (1)   The information presented in each semi annual report

         (2)   The report of the  independent registered  public accounting firm
               regarding  the annual audit of the  financial  statements  of the
               Trust  required  under  the  Declaration  of  Trust  stating  the
               financial  statements are presented in accordance with accounting
               principles generally accepted in the United States of America.

         (3)   Exhibits:

               31.1    Certification  by  Trustee  pursuant  to  Rule 13a-14  or
                       15d-14 of the Securities Exchange Act of 1934, as adopted
                       pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

<PAGE>

SIGNATURE

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


               GOVERNMENT TRUST CERTIFICATES

          By:  The Bank of New York Trust Company,  N.A.
               (formerly  JP Morgan  Trust Company,  NA)
               Not in its individual capacity but solely
               as  Trustee on  behalf  of the  Trust 1-D


          By:  /s/  Richard Tarnas
               -----------------------------------------
        Name:  Richard Tarnas
       Title:  Vice President

        Date:  March 30, 2007



<PAGE>
                                  EXHIBIT 31.1
                                 ---------------
                     Rule 13a-14(d)/15d-14(d) Certification


1.  I have reviewed this annual report on Form 10-K of Government Trust 1-D, for
which The Bank of New York Trust Company, N.A. acts as Trustee;

2.  Based on my  knowledge,  this  annual  report  does not  contain  any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report,

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included  in this annual  report,  fairly  present in all  material
respects  the  financial  condition,  distributable  income and changes in trust
corpus of the  registrant  as of, and for,  the period  presented in this annual
report;

4.  I am responsible for  establishing  and maintaining  disclosure controls and
procedures  (as defined in Exchange Act Rules  13a-15(e) and  15d-15(e),  or for
causing such procedures to be established and maintained, for the registrant and
I have:

     a)  designed  such  disclosure  controls  and  procedures,  or caused  such
     controls and procedures to be designed, to ensure that material information
     relating to the registrant,  including its  consolidated  subsidiaries,  is
     made known to me by others within those entities,  particularly  during the
     period in which this annual report is being prepared;

     b)  evaluated the effectiveness of the registrant's disclosure controls and
     procedures  as of a date  within 90 days prior to the  filing  date of this
     annual report (the "Evaluation Date"); and

     c)  presented in  this annual report my conclusions about the effectiveness
     of the disclosure  controls and procedures based on my evaluation as of the
     Evaluation Date;


Date:   March 30, 2007

By:    /s/ Richard Tarnas
       --------------------------------
Name:  Richard Tarnas
Title: Vice President
       The Bank of New York Trust Company, N.A.
       (formerly  JP Morgan  Trust Company,  NA)


<PAGE>

                     REPORTS TO HOLDERS OF GOVERNMENT TRUST
                                  May 15, 2006


To The Holders of
Government Trust Certificates
Zero Coupon Class 1-D

In accordance with Section 4.1 of the Declaration of Trust ("Trust"),  JP Morgan
Trust Company formerly (Bank One Trust Company, N.A.), as Trustee and not in its
individual   capacity   ("Trustee"),   hereby   provides   the  holders  of  the
above-mentioned  certificates  this  Semi-annual  Report relating to the May 15,
2006 Certificate Payment Date.

Any capitalized terms used herein shall have the meaning assigned to them in the
Trust.

1.       The  aggregate  dollar  amount  distributed  to  holders  of  Class 1-D
         Certificates:  $72,455,168.56

2.       The  Principal Balance of the Class 1-D Note after the May 3, 2006 Note
         Payment Date:  $756,892,000.00

3.       The Deficient amount of the Note Payment:  $-0-

Neither a delinquency  in payment under any of the Notes nor an Event of Default
has occurred and is continuing.

I, Vanessa F. Williams,  a Responsible Officer of the Trustee, to the best of my
knowledge  and belief,  certify  that this  Semi-annual  Report is complete  and
accurate.


                          /s/ Vanessa Williams
                          ---------------------------------
                          Vanessa Williams
                          Trust Officer

                          For JP Morgan Trust  Company,  NA  (formerly  Bank
                          One  Trust  Company),  as  Trustee  and not in its
                          individual capacity.


<PAGE>

                     REPORTS TO HOLDERS OF GOVERNMENT TRUST
                                November 15, 2006


To The Holders of
Government Trust Certificates
Zero Coupon Class 1-D


In accordance with Section 4.1 of the Declaration of Trust ("Trust"),  JP Morgan
Trust Company formerly (Bank One Trust Company, N.A.), as Trustee and not in its
individual   capacity   ("Trustee"),   hereby   provides   the  holders  of  the
above-mentioned  certificates  this Semi-annual  Report relating to the November
15, 2006 Certificate Payment Date.

Any capitalized terms used herein shall have the meaning assigned to them in the
Trust.

1.       The  aggregate  dollar  amount  distributed  to  holders  of  Class 1-D
         Certificates:   $76,612,179.25

2.       The Principal Balance of the  Class 1-D Note after the November 3, 2006
         Note Payment Date:  $717,131,000.00

3.       The Deficient amount of the Note Payment:  $-0-

Neither a delinquency  in payment under any of the Notes nor an Event of Default
has occurred and is continuing.

I, Lawrence M. Kusch,  a Responsible  Officer of the Trustee,  to the best of my
knowledge  and belief,  certify  that this  Semi-annual  Report is complete  and
accurate.  If you have any questions  regarding  this notice please  contact our
Customer Service group directly at (800)275-2048 for further assistance.


                                  /s/ Lawrence M. Kusch
                                  -------------------------
                                  Lawrence M. Kusch
                                  AVP, Relationship Manager

                                  For  The Bank of New York Trust Company,  N.A.
                                  (formerly  JP Morgan  Trust Company,  NA), as
                                  Trustee  and  not  in its individual capacity.


<PAGE>

                              GOVERNMENT TRUST 1-D
                  Financial Statements as of December 31, 2006
           and Report of Independent Registered Public Accounting Firm
           ----------------------------------------------------------


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


Government Trust 1-D

We have audited the  accompanying  balance  sheet of  Government  Trust 1-D (the
"Trust") as of December 31, 2006,  and the related  statements  of income,  cash
flows and  changes in Trust  balance for the year then  ended.  These  financial
statements are the responsibility of the Trust's management.  Our responsibility
is to express an opinion on these financial statements based on our audit.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Trust is not required to have,
nor were we engaged to perform,  an audit of its internal control over financial
reporting.  Our audit included  consideration of internal control over financial
reporting as a basis for designing audit  procedures that are appropriate in the
circumstances,  but  not  for  the  purpose  of  expressing  an  opinion  on the
effectiveness  of  the  Trust's  internal  control  over  financial   reporting.
Accordingly,  we express no such opinion. An audit also includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements,  assessing the accounting  principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation. Our procedures included confirmation of the securities held by the
Depository as of December 31, 2006 for the account of the  Government of Israel,
for the purpose  described  in Note 4 of the notes to financial  statements,  by
correspondence  with the  Depository.  We  believe  that our  audit  provides  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of  Government  Trust 1-D at
December  31,  2006,  the results of its  operations,  cash flows and changes in
Trust balance for the year then ended, in conformity with accounting  principles
generally accepted in the United States of America.


/s/ Deloitte & Touche LLP
-------------------------

New York, NY
March 23, 2007


<PAGE>

GOVERNMENT TRUST 1-D
BALANCE SHEET
DECEMBER 31, 2006
--------------------------------------

ASSETS

LOAN NOTE RECEIVABLE - At amortized cost,
inclusive of unamortized premium of $2,813,411                 $ 719,944,411

ACCRUED INTEREST RECEIVABLE                                       11,259,156
                                                     ------------------------

TOTAL                                                          $ 731,203,567
                                                     ========================


LIABILITIES AND TRUST BALANCE

ACCRUED EXPENSES PAYABLE                                             $ 8,665

TRUST BALANCE -Comprised of owners'
equity in Government Trust Certificates                          731,194,902
                                                     ------------------------

TOTAL                                                          $ 731,203,567
                                                     ========================

See notes to financial statements.


<PAGE>

GOVERNMENT TRUST 1-D
STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 2006
--------------------------------------


INTEREST INCOME ON THE LOAN NOTE                                $ 73,273,321

TRUSTEE FEES AND OTHER EXPENSES                                   $ (57,149)
                                                       ----------------------
NET INCOME                                                      $ 73,216,172
                                                       ======================


See notes to financial statements.



<PAGE>

GOVERNMENT TRUST 1-D
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 2006
--------------------------------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Principal and interest received on the Loan Notes              $ 149,125,388
Trustee fees and other expenses paid                                 (58,040)
                                                        ---------------------

Net cash provided by operating activities                        149,067,348
                                                        ---------------------

CASH FLOWS USED IN FINANCING ACTIVITIES:
Distributions to certificate owners                             (149,067,348)
                                                        ---------------------

NET INCREASE IN CASH                                                       -

CASH BALANCE - Beginning of year                                           -
                                                        ---------------------

CASH BALANCE - End of year                                               $ -
                                                        =====================


Reconciliation of net income to net cash provided by operating activities:
  Net income                                                    $ 73,216,172
  Amortization of premium on Loan Note receivable                    982,768
  Decrease in Loan Note receivable                                73,712,000
  Decrease in accrued interest receivable                          1,157,300
  Decrease in accrued expenses                                          (892)
                                                        ---------------------
Net cash provided by operating activities                      $ 149,067,348
                                                        =====================


See notes to financial statements.


<PAGE>

GOVERNMENT TRUST 1-D
STATEMENT OF CHANGES IN TRUST BALANCE
YEAR ENDED DECEMBER 31, 2006
--------------------------------------

    Trust                                                          Trust
   Balance,                              Distributions to         Balance,
January 1, 2006        Net Income       Certificate Owners     December 31, 2006

$ 807,046,078         $ 73,216,172       $ (149,067,348)        $ 731,194,902
===============      ==============     ==================     =================


See notes to financial statements.



<PAGE>

GOVERNMENT TRUST 1-D
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006
--------------------------------------


1.   ORGANIZATION AND OPERATIONS

     Government  Trust 1-D (the "Trust") is a limited purpose trust  established
     under the laws of the state of Illinois  pursuant to a Declaration of Trust
     (the  "Declaration")  between  the  Trust  and Bank of New York  (formerly,
     JPMorgan  Trust Company,  N.A.,  formerly,  Bank One Trust  Company,  N.A.,
     formerly, First National Bank of Chicago), as Trustee (the "Trustee").  The
     Trust was created for the sole purpose of the issuance and sale of a single
     class of Zero Coupon Certificates (the  "Certificates").  The assets of the
     Trust consist of a Promissory  Note (a "Loan Note") from the  Government of
     Israel  ("Israel").  The Loan  Note is backed  by a full  faith and  credit
     guaranty (the  "Guaranty")  issued by the United States of America,  acting
     through the Defense Security Assistance Agency of the Department of Defense
     (the  "DSA"),  of the due and  punctual  payment of 90% of all  payments of
     principal and interest due on the Loan Note (the "Guaranteed  Portion") and
     a security  interest  in certain  collateral,  consisting  of  non-callable
     securities issued or guaranteed by the United States Government, sufficient
     to pay the  remaining  10% of all payments of principal and interest due on
     the Loan  Note  (the  "Unguaranteed  Secured  Portion").  The Loan Note and
     Certificates will not be subject to prepayment or acceleration.

2.   LOAN NOTE

     The Loan Note in the original principal amount of $1,300,000,000  evidences
     a loan made by the Trust to Israel subject to the terms and conditions of a
     Loan  Agreement  (the "Loan  Agreement")  dated as of  September  29,  1988
     between the Trust and Israel. The Loan Note is carried at amortized cost on
     the accompanying Balance Sheet because of the Trust's intent and ability to
     hold the Loan Note to maturity.  The proceeds  from the Loan Note were used
     to prepay  certain  loans made to Israel from the Federal  Financing  Bank.
     Semi-annual  payments  of  interest at an annual rate of 9.7450% are due on
     the Loan Note on each May 3 and November 3 (each a "Note Payment Date"). On
     May 3, 2006 and  November  3,  2006 Note  Payment  Dates,  Israel  made its
     scheduled  payments  of  principal  on the  Loan  Note  in the  amounts  of
     $33,951,000 and $39,761,000, respectively. Scheduled principal payments are
     due on each Note Payment Date as follows:

             Payment         Principal            Payment            Principal
              Date            Payment              Date               Payment

             May 3, 2007    $40,051,000      November 3, 2010       $47,368,000
        November 3, 2007     67,844,000           May 3, 2011        47,368,000
             May 3, 2008     89,940,000      November 3, 2011        29,248,000
        November 3, 2008     93,710,000           May 3, 2012        22,773,000
             May 3, 2009     92,701,000      November 3, 2012        16,877,000
        November 3, 2009     93,710,000           May 3, 2013        16,877,000
             May 3, 2010     41,800,000      November 3, 2013        16,864,000

     The Government of the United States,  acting through the DSA, has agreed to
     guarantee  the repayment of the  Guaranteed  Portion due to the Trust under
     the Note.  Israel has agreed to pledge  certain  collateral as security for
     the repayment of the Unguaranteed  Secured Portion, as more fully described
     in Note 4. The estimated fair value of the Loan Note  approximates the fair
     value of the Certificates.  The estimated fair value of the Certificates at
     December 31, 2006 was approximately $808,690,000.  The estimate of the fair
     value of the  Certificates  is based  upon the  present  values of the cash
     flows using risk-adjusted spreads to the U.S. Treasury curve.

3.   THE ZERO COUPON CERTIFICATES

     On September 29, 1988, the Trust issued 51 separate series of Certificates,
     Class 1-D.  Thirty-seven  of such series of  Certificates  matured prior to
     December 31, 2006. Each of the remaining series of Certificates will mature
     on one of the  semiannual  certificate  payment  dates from May 15, 2007 to
     November 15, 2013 (each, a "Maturity  Date").  Scheduled  distributions are
     due on the Maturity Dates as follows:

             Maturity       Distribution          Maturity        Distribution
               Date            Amount               Date             Amount

             May 15, 2007    $74,966,316      November 15, 2010    $56,977,695
        November 15, 2007    100,809,333           May 15, 2011     54,671,466
             May 15, 2008    119,602,178      November 15, 2011     34,245,236
        November 15, 2008    118,993,224           May 15, 2012     26,346,224
             May 15, 2009    113,421,718      November 15, 2012     19,341,464
        November 15, 2009    109,917,338           May 15, 2013     18,519,765
             May 15, 2010     53,444.833      November 15, 2013     17,685,066


     Each of the Certificates  evidences an undivided fractional interest in the
     Trust,  and  represents  the right to receive a portion  of the  semiannual
     payments due on the Loan Note held by the Trust.

4.   THE COLLATERAL

     In accordance  with the Collateral  Depository  Agreement (the  "Depository
     Agreement")  between  Israel,  the  Trustee,  and The Bank of New York,  as
     depository  (the  "Depository"),  and in order to provide  security for the
     payment of the  Unguaranteed  Secured  Portion,  Israel has pledged certain
     collateral,  consisting of non-callable  securities issued or guaranteed by
     the United  States  Government  (together  with the proceeds  thereof,  the
     "Collateral"). The Collateral is of such amounts and has such payment dates
     as to  enable  the  Trustee  to  receive  on or  immediately  prior to each
     semiannual  Maturity  Date an  amount  sufficient  to pay the  Unguaranteed
     Secured Portion if timely payment on the Loan Note has not been received by
     the related Note Payment Date. All of the Collateral was deposited with the
     Depository on the date that the loans  evidenced by the Loan Note were made
     by the Trust to Israel.


5.   THE TRUSTEE

     Pursuant to the  Declaration,  the  Trustee  established  a separate  trust
     account  for the Trust.  All  payments  received  with  respect to the Loan
     Notes, the Guaranty and any relevant  Collateral are deposited in the trust
     account for the benefit of the holders of the Certificates  after deducting
     fees of the Trustee and any  additional  expenses of the Trust.  Any excess
     funds  remaining in the trust account after the payment of principal on the
     Certificates  will  revert  back to Israel to the  extent  such  funds were
     provided by Israel but not needed for the above purpose.

6.   INCOME TAXES

     The Trust is  classified  as a Grantor  Trust  and will not be  subject  to
     Federal income taxes.  Each  Certificateholder  will be treated for Federal
     income  tax  purposes  as the  owner  of a  pro rata  undivided  fractional
     interest  in the  assets  held by the Trust.  The  difference  between  the
     financial  reporting  and  income  tax  bases  of the  Trust's  assets  and
     liabilities is not significant.

7.   RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS


     In September 2006, the Financial Accounting Standards Board ("FASB") issued
     Interpretation No. 157 entitled Statement of Financial Accounting Standards
     No. 157, Fair Value  Measurements  ("SFAS 157").  SFAS 157 is effective for
     fiscal years  beginning  after  November  15,  2007.  SFAS 157 defines fair
     value,  establishes  a framework  for  measuring  fair  value,  and expands
     disclosure  requirements  about  fair  value  measurements.  The  Trust  is
     currently  evaluating  the  impact of  adopting  SFAS 157 on its  financial
     statements.  At this time, the impact to the Trust's  financial  statements
     has not been determined.

     In July 2006,  the FASB  released  "Accounting  for  Uncertainty  in Income
     Taxes" ("FIN 48"),  which is effective  for fiscal  years  beginning  after
     December 15, 2006. FIN 48 clarifies  accounting for income taxes recognized
     in  the  financial  statements  in  accordance  with  FASB  Statement  109,
     "Accounting   for  Income   Taxes."   This   interpretation   prescribes  a
     comprehensive  model for how an entity should recognize,  measure,  present
     and disclose in its financial  statements  uncertain tax positions that the
     entity has taken or expects to take on a tax return. The Trust is currently
     evaluating  the impact of adopting FIN 48 on its financial  statements.  At
     this time,  the impact to the  Trust's  financial  statements  has not been
     determined.

                                     ******