Claim: Tel Aviv is the economic center of Israel.

Israel -LRB- -LSB- ˈɪzreiəl -RSB- ; -RRB- , officially the State of Israel -LRB- -LSB- mediˈnat jisʁaˈʔel -RSB- دَوْلَة إِسْرَائِيل -LSB- dawlat ʔisraːˈʔiːl -RSB- -RRB- , is a country in the Middle East , on the southeastern shore of the Mediterranean Sea and the northern shore of the Red Sea . It has land borders with Lebanon to the north , Syria to the northeast , Jordan on the east , the Palestinian territories of the West Bank and Gaza Strip to the east and west , respectively , and Egypt to the southwest . The country contains geographically diverse features within its relatively small area . Israel 's economy and technology center is Tel Aviv , while its seat of government and proclaimed capital is Jerusalem , although the state 's sovereignty over East Jerusalem is internationally unrecognized.The Jerusalem Law states that `` Jerusalem , complete and united , is the capital of Israel '' and the city serves as the seat of the government , home to the President 's residence , government offices , supreme court , and parliament . United Nations Security Council Resolution 478 -LRB- 20 August 1980 ; 14 -- 0 , U.S. abstaining -RRB- declared the Jerusalem Law `` null and void '' and called on member states to withdraw their diplomatic missions from Jerusalem . The United Nations and all member nations refuse to accept the Jerusalem Law -LRB- see -RRB- and maintain their embassies in other cities such as Tel Aviv , Ramat Gan , and Herzliya -LRB- see the CIA Factbook and Map of Israel -RRB- . The U.S. Congress subsequently adopted the Jerusalem Embassy Act , which said that the U.S. embassy should be relocated to Jerusalem and that it should be recognized as the capital of Israel . However , the US Justice Department Office of Legal Counsel concluded that the provisions of the act `` invade exclusive presidential authorities in the field of foreign affairs and are unconstitutional '' . Since passage of the act , all presidents serving in office have determined that moving forward with the relocation would be detrimental to U.S. national security concerns and opted to issue waivers suspending any action on this front . The Palestinian Authority sees East Jerusalem as the capital of a future Palestinian state . The city 's final status awaits future negotiations between Israel and the Palestinian Authority -LRB- see `` Negotiating Jerusalem , '' Palestine -- Israel Journal -RRB- . See Positions on Jerusalem for more information .   In 1947 , the United Nations adopted a Partition Plan for Mandatory Palestine recommending the creation of independent Arab and Jewish states and an internationalized Jerusalem . The plan was accepted by the Jewish Agency for Palestine , and rejected by Arab leaders . Next year , the Jewish Agency declared `` the establishment of a Jewish state in Eretz Israel , to be known as the State of Israel . '' Israel has since fought several wars with neighboring Arab states , in the course of which it has occupied territories including the West Bank , Golan Heights and the Gaza Strip -LRB- still considered occupied after 2005 disengagement -RRB- . It extended its laws to the Golan Heights and East Jerusalem , but not the West Bank . Israel 's occupation of the Palestinian territories is the world 's longest military occupation in modern times . Efforts to resolve the Israeli -- Palestinian conflict have not resulted in peace . However , peace treaties between Israel and both Egypt and Jordan have successfully been implemented .   The population of Israel , as defined by the Israel Central Bureau of Statistics , was estimated in to be people . It is the world 's only Jewish-majority state , with 74.8 % being designated as Jewish . The country 's second largest group of citizens are Arabs , at 20.8 % -LRB- including the Druze and most East Jerusalem Arabs -RRB- . The great majority of Israeli Arabs are Sunni Muslims , including significant numbers of semi-settled Negev Bedouins ; the rest are Christians and Druze . Other minorities include Arameans , Armenians , Assyrians , Black Hebrew Israelites , Circassians , Maronites and Samaritans . Israel also hosts a significant population of non-citizen foreign workers and asylum seekers from Africa and Asia , including illegal migrants from Sudan , Eritrea and other Sub-Saharan Africans .   In its Basic Laws , Israel defines itself as a Jewish and democratic state . Israel is a representative democracy with a parliamentary system , proportional representation and universal suffrage . The prime minister is head of government and the Knesset is the legislature . Israel is a developed country and an OECD member , with the 35th-largest economy in the world by nominal gross domestic product . The country benefits from a highly skilled workforce and is among the most educated countries in the world with one of the highest percentage of its citizens holding a tertiary education degree . The country has the highest standard of living in the Middle East and the third highest in Asia , and has one of the highest life expectancies in the world .