UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-K/A







|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------

for the fiscal year ended December 31, 2007

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 incorporation or organization) |  | (I.R.S. Employer Identification No.)



|                                                                                                                                                  |  |           
|------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------
|The Bank of New York Trust Company, N.A. (formerly J.P. Morgan Trust Company, N.A.), 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: Zero Coupon Certificates, Class 1-D





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. Not
Applicable.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company.

See the definitions of large accelerated filer, accelerated filer and smaller reporting company in
Rule 12b-2 of the Exchange Act.



|                        |  |                                                  |  |                           |  |  
|----------------------- |  | ------------------------------------------------ |  | ------------------------- |  | -
|Large accelerated filer |  |  ̈                                                |  | Accelerated filer         |  |  ̈
|                        |  |                                                  | 
|Non-accelerated filer   |  | x  (Do not check if a smaller reporting company) |  | Smaller reporting company |  |  ̈

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

List hereunder the following documents if incorporated by reference and the part of the Form 10-K (e.g., Part I, Part II, etc.) into which
the document is incorporated: (1 Any annual report to security holders; (2) Any proxy information statement; and, (3) Any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933. The listed documents should be
clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended date December 24, 1980). None









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EXPLANATORY NOTE

This Form 10-K/A amends the disclosure provided under Part II, Item 9A.

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, 2007, Trust 1-D: 1,168



|Item 6. | Selected Financial Data.
|------- | ------------------------

Not Applicable.



|Item 7. | Managements Discussion and Analysis of Financial Condition and Results of Operations.
|------- | --------------------------------------------------------------------------------------

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.



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|Item 9A. | Controls and Procedures.
|-------- | ------------------------

As of the end of the period
covered by this report, an evaluation was carried out by Lawrence M. Kusch, Assistant Vice President of the Trustee, of the effectiveness of the Trusts disclosure controls and procedures as defined in Exchange Act Rules 13a-15(e) and
15d-15(e). Based on that evaluation, Mr. Kusch concluded that the Trusts disclosure controls and procedures were not effective because such controls and procedures did not ensure that a report by management on the Trusts internal
control over financial reporting as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) was initially included in the Trusts Form 10-K for the year 2007. Such report appears below.

Management of the Trustee is responsible for establishing and maintaining adequate internal control over financial reporting for the Trust, as such term
is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Management of the Trustee has assessed the effectiveness of the Trusts internal control over financial reporting as of December 31, 2007. In making this assessment, management used
the criteria established in Internal Control  Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based upon such assessment, management of the Trustee believes that, as of December 31,
2007, the Trusts internal control over financial reporting is effective based upon those criteria. This annual report does not include an attestation report of the Trusts registered public accounting firm regarding internal control over
financial reporting. Managements report was not subject to attestation by the Trusts registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Trust to provide only
managements report in this annual report.

There have not been any changes in the Trusts internal controls and procedures for
financial reporting as defined in Exchange Act Rule 13a-15(f) and 15d-15(f) during the fourth quarter of 2007 that have materially affected, or are reasonably likely to materially affect, the Trusts internal control over financial reporting.



|Item 9B. | Other Information.
|-------- | ------------------

None.

PART III



|Item 10. | Directors, Executive Officers and Corporate Governance.
|-------- | -------------------------------------------------------

Not Applicable.



|Item 11. | Executive Compensation.
|-------- | -----------------------

Not Applicable.



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|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 LLP 2007 Audit Expense = $ $25,689.06

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
|     | 
|32.1 |  | Certification by Trustee pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                     



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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 1-DBy:

The Bank of New York Trust Company, N.A.(formerly
J.P. Morgan Trust Company, N.A.) Not in its individual capacity but solely as Trustee on behalf of Government Trust 1-DBy:

/s/ Lawrence M. KuschName:

Lawrence M. KuschTitle:

Assistant Vice PresidentDate:

September 26, 2008




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REPORTS TO HOLDERS OF GOVERNMENT TRUST

May 15, 2007

The Bank of New York Trust Company, N.A.

2 N LaSalle Street, Suite 1020

Chicago, IL 60602

1-800-254-2826

May 15, 2007

To The Holders of

Government Trust Certificates

Zero Coupon Class 1-D

In accordance with Section 4.1 of the Declaration of Trust (Trust), The Bank of New York Trust Company, N.A. (formerly J.P. Morgan 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, 2007 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: $74,966,315.56



|2. | The Principal Balance of the Class 1-D Note after the May 3, 2007
|-- | -----------------------------------------------------------------

Note Payment Date: $677,080,000.00



|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) 254-2826 for further assistance.



/s/ Lawrence M. KuschLawrence M. KuschAVP, Relationship ManagerFor The Bank of New York Trust Company, N.A. (formerly J.P. Morgan Trust
Company, N.A.), as Trustee and not in its individual capacity.




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REPORTS TO HOLDERS OF GOVERNMENT TRUST

November 15, 2007

2 N LaSalle Street, Suite 1020

Chicago, IL 60602

November 15, 2007

To The Holders of

Government
Trust Certificates

Zero Coupon Class 1-D

In accordance with
Section 4.1 of the Declaration of Trust (Trust), The Bank of New York Trust Company, N.A. (formerly J.P. Morgan 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, 2007 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: $100,809,332.50



|2. | The Principal Balance of the Class 1-D Note after the November 2, 2007
|-- | ----------------------------------------------------------------------

Note Payment Date: $609,236,000.00



|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) 254-2826 for further assistance.



/s/ Lawrence M. KuschLawrence M. KuschAVP, Relationship ManagerFor The Bank of New York Trust Company, N.A. formerly J.P. Morgan Trust
Company, N.A.), as Trustee and not in its individual capacity.




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GOVERNMENT TRUST 1-D

Financial Statements as of December 31, 2007

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 sheets of Government Trust 1-D (the Trust) as of December 31,
2007, 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, 2007 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, such financial statements present fairly, in all material respects, the financial position of Government Trust 1-D
at December 31, 2007, 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
|Deloitte & Touche LLP    
|                         
|Chicago, IL              
|March 28, 2008           



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GOVERNMENT TRUST 1-D

BALANCE SHEET

DECEMBER 31, 2007



|                                                                                         |  |   |            
|---------------------------------------------------------------------------------------- |  | - | -----------
|ASSETS                                                                                   |  |   |            
|LOAN NOTE RECEIVABLE - at amortized cost, inclusive of unamortized premium of $1,877,845 |  | $ | 611,113,845
|ACCRUED INTEREST RECEIVABLE                                                              |  |   | 9,730,092  
|                                                                                         |  |   |            
|TOTAL                                                                                    |  | $ | 620,843,937
|                                                                                         |  |   |            
|LIABILITIES AND TRUST BALANCE                                                            |  |   |            
|ACCRUED EXPENSES PAYABLE                                                                 |  | $ | 7,488      
|TRUST BALANCE - Comprised of owners equity in Government Trust Certificates             |  |   | 620,836,449
|                                                                                         |  |   |            
|TOTAL                                                                                    |  | $ | 620,843,937
|                                                                                         |  |   |            

See notes to financial statements.



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GOVERNMENT TRUST 1-D

STATEMENT OF INCOME

YEAR ENDED DECEMBER 31, 2007



|                                 |  |   |            |  
|-------------------------------- |  | - | ---------- | -
|INTEREST INCOME ON THE LOAN NOTE |  | $ | 65,468,302 |  
|TRUSTEE FEES AND OTHER EXPENSES  |  |   | (51,107    | )
|                                 |  |   |            |  
|NET INCOME                       |  | $ | 65,417,195 |  
|                                 |  |   |            |  

See notes to financial statements.



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GOVERNMENT TRUST 1-D

STATEMENT OF CASH FLOWS

YEAR ENDED DECEMBER 31, 2007



|                                                                          |  |   |              |  
|------------------------------------------------------------------------- |  | - | ------------ | -
|CASH FLOWS FROM OPERATING ACTIVITIES:                                     |  |   |              |  
|Principal and interest received on the Loan Notes                         |  | $ | 175,827,931  |  
|Trustee fees and other expenses paid                                      |  |   | (52,283      | )
|                                                                          |  |   |              |  
|Net cash flows from operating activities                                  |  |   | 175,775,648  |  
|                                                                          |  |   |              |  
|CASH FLOWS USED IN FINANCING ACTIVITIES:                                  |  |   |              |  
|Distributions to certificate owners                                       |  |   | (175,775,648 | )
|                                                                          |  |   |              |  
|Net cash flows used in financing activities                               |  |   | (175,775,648 | )
|NET INCREASE IN CASH                                                      |  |   |             |  
|CASH BALANCE - Beginning of year                                          |  |   |             |  
|                                                                          |  |   |              |  
|CASH BALANCE - End of year                                                |  | $ |             |  
|                                                                          |  |   |              |  
|Reconciliation of net income to net cash flows from operating activities: |  |   |              |  
|Net income                                                                |  | $ | 65,417,195   |  
|Amortization of premium on Loan Note receivable                           |  |   | 935,566      |  
|Decrease in Loan Note receivable                                          |  |   | 107,895,000  |  
|Decrease in interest receivable                                           |  |   | 1,529,064    |  
|Decrease in accrued expenses                                              |  |   | (1,177       | )
|                                                                          |  |   |              |  
|Net cash flows from operating activities                                  |  | $ | 175,775,648  |  
|                                                                          |  |   |              |  

See notes to financial statements.



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GOVERNMENT TRUST 1-D

STATEMENT OF CHANGES IN TRUST BALANCE

YEAR ENDED DECEMBER 31, 2007



|                             |             |            |   |                                    |  |   |                                |   |  |   |            
|---------------------------- | ----------- | ---------- | - | ---------------------------------- |  | - | ------------------------------ | - |  | - | -----------
|TrustBalance,January 1, 2007 |             | Net Income |   | Distributions toCertificate Owners |  |   | TrustBalance,December 31, 2007
|$                            | 731,194,902 |            | $ | 65,417,195                         |  | $ | (175,775,648                   | ) |  | $ | 620,836,449
|                             |             |            |   |                                    |  |   |                                |   |  |   |            

See notes to financial statements.



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GOVERNMENT TRUST 1-D

NOTES
TO FINANCIAL STATEMENTS

DECEMBER 31, 2007



|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 The Bank of New York Trust Company, N.A. (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, 2007 and November 3, 2007 Note Payment Dates, Israel made its
scheduled payments of principal on the Loan Note in the amounts of $40,051,000 and $67,844,000, respectively. Scheduled principal payments are due on each Note Payment Date as follows:



|                 |  |                  |            |              |                  |                  |   |           
|---------------- |  | ---------------- | ---------- | ------------ | ---------------- | ---------------- | - | ----------
|Payment Date     |  | PrincipalPayment |            | Payment Date |                  | PrincipalPayment
|May 3, 2008      |  | $                | 89,940,000 |              | May 3, 2011      |                  | $ | 47,368,000
|November 3, 2008 |  |                  | 93,710,000 |              | November 3, 2011 |                  |   | 29,248,000
|May 3, 2009      |  |                  | 92,701,000 |              | May 3, 2012      |                  |   | 22,773,000
|November 3, 2009 |  |                  | 93,710,000 |              | November 3, 2012 |                  |   | 16,877,000
|May 3, 2010      |  |                  | 41,800,000 |              | May 3, 2013      |                  |   | 16,877,000
|November 3, 2010 |  |                  | 47,368,000 |              | 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



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of the Certificates. The estimated fair value of the Certificates at December 31, 2007 was approximately $693,194,000. 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-nine of such series of Certificates matured prior to December 31, 2007. Each of the remaining series of Certificates will mature on one of the semiannual certificate payment
dates from May 15, 2008 to November 15, 2013 (each, a Maturity Date). Scheduled distributions are due on the Maturity Dates as follows:



|                  |  |                    |             |               |                   |                    |   |           
|----------------- |  | ------------------ | ----------- | ------------- | ----------------- | ------------------ | - | ----------
|Maturity Date     |  | DistributionAmount |             | Maturity Date |                   | DistributionAmount
|May 15, 2008      |  | $                  | 119,602,178 |               | May 15, 2011      |                    | $ | 54,671,466
|November 15, 2008 |  |                    | 118,993,224 |               | November 15, 2011 |                    |   | 34,245,236
|May 15, 2009      |  |                    | 113,421,718 |               | May 15, 2012      |                    |   | 26,346,224
|November 15, 2009 |  |                    | 109,917,338 |               | November 15, 2012 |                    |   | 19,341,464
|May 15, 2010      |  |                    | 53,444,833  |               | May 15, 2013      |                    |   | 18,519,765
|November 15, 2010 |  |                    | 56,977,695  |               | 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.



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|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.

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 adopted FIN 48 effective January 1, 2007 for all open tax years and has determined that no material uncertain tax positions exist. As a result, the Trust has not recorded
any liabilities for material unrecognized tax benefits as of December 31, 2007.



|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.



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