Document:

Exhibit
      4(2).1

    AMENDMENT
      NO. 1

    

    DATED
      AS
      OF December 30, 2005

    

    TO
      MASTER
      FISCAL AGENCY AGREEMENT,

    

    DATED
      AS
      OF FEBRUARY 16, 2001

    

    BETWEEN

    

    THE
      STATE
      OF ISRAEL

    

    AND

    

    THE
      BANK
      OF NEW YORK

    

    

    WHEREAS,
      the parties wish to amend the Master Fiscal Agency Agreement, dated as of
      February 16, 2001 (the “Agreement”), in respect of the Procedures on Issuance of
      the Bonds to which the Agreement applies;

    

    NOW
      THEREFORE, in accordance with Section 8.2 of the Agreement, the parties hereto
      hereby agree as follows:

    

    1.           Terms
      used and not otherwise defined herein shall have the meaning as provided in
      the
      Agreement. 

    

    2.           Section
      3.1.g of the Agreement is hereby amended and restated to read in full as
      follows:

    “Each
      Friday, the Fiscal Agent shall transfer the subscription funds in respect of
      which Bonds were issued through the close of the business day on the preceding
      Thursday, together with any earnings thereon, into an account to be designated
      by the State. Pending such transfer, the Fiscal Agent shall hold such funds
      in
      an interest bearing account for the benefit of the State.”

    

    3.           Article
      VIII of the Agreement is hereby incorporated mutatis
      mutandis.

    

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    

    

    IN
      WITNESS WHEREOF, the State has caused this Amendment to the Master Fiscal Agency
      Agreement to be signed in its behalf by its Chief Fiscal Officer and the Deputy
      Chief Fiscal Officer of the Ministry of Finance for the Western Hemisphere
      thereunto duly authorized, and the Fiscal Agent has caused this Agreement to
      be
      signed by its President or Vice President, attested by its Secretary or
      Assistant Secretary.

    

    

    STATE
      OF
      ISRAEL

    

    

    BY: 
      /s/Zvi
      Chalamish        
Chief
      Fiscal Officer of the
Ministry
      of Finance for the
Western
      Hemisphere

    

    

    BY: 
      /s/Ran
      Alon          

Deputy
      Chief Fiscal Officer
of
      the
      Ministry of Finance
for
      the
      Western Hemisphere

     

    

    

    THE
      BANK
      OF NEW YORK

    

    

    BY: 
      /s/Fredrick
      W. Clark       
Name:
      Fredrick W. Clark
Title:
      Vice President

    

    

    Attest:

    

    

                            
      /s/Luis Perez        

    Assistant
      Vice PresidentExhibit
      4(2).2

    AMENDMENT
      NO. 2

    

    DATED
      AS
      OF FEBRUARY 24, 2006

    

    TO
      MASTER
      FISCAL AGENCY AGREEMENT,

    

    DATED
      AS
      OF FEBRUARY 16, 2001

    

    BETWEEN

    

    THE
      STATE
      OF ISRAEL

    

    AND

    

    THE
      BANK
      OF NEW YORK

    

    

    WHEREAS,
      the parties wish to amend the Master Fiscal Agency Agreement, dated as of
      February 16, 2001 (the “Agreement”), in respect of the Procedures on Issuance of
      the Bonds to which the Agreement applies;

    

    NOW
      THEREFORE, in accordance with Section 8.2 of the Agreement, the parties hereto
      hereby agree as follows:

    

    1.           Terms
      used and not otherwise defined herein shall have the meaning as provided in
      the
      Agreement. 

    

    2.           Section
      2.11 of the Agreement is hereby amended and restated to read in full as
      follows:

    “The
      Bonds shall be executed on behalf of the State with the signatures of its Prime
      Minister and its Minister of Finance, or the Chief Fiscal Officer of the
      Ministry of Finance for the Western Hemisphere and the Deputy Fiscal Officer
      of
      the Ministry of Finance for the Western Hemisphere, any or both of which may
      be
      manual or facsimile, and shall bear the State Seal or State Emblem or a
      facsimile of either. The State may use the signature of any person who shall
      have been its Prime Minister, its Minister of Finance, the Chief Fiscal Officer
      of the Ministry of Finance for the Western Hemisphere or the Deputy Fiscal
      Officer of the Ministry of Finance for the Western Hemisphere at any time
      notwithstanding the fact that such person may have ceased to hold such office
      at
      the time when the Bonds shall actually be countersigned and issued as herein
      provided or may have become Prime Minister or Minister of Finance after the
      date
      shown on the Bonds.”

    

    3.           Article
      VIII of the Agreement is hereby incorporated mutatis
      mutandis.

    

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    

    IN
      WITNESS WHEREOF, the State has caused this Amendment to the Master Fiscal Agency
      Agreement to be signed in its behalf by its Chief Fiscal Officer and the Deputy
      Chief Fiscal Officer of the Ministry of Finance for the Western Hemisphere
      thereunto duly authorized, and the Fiscal Agent has caused this Agreement to
      be
      signed by its President or Vice President, attested by its Secretary or
      Assistant Secretary.

    

    

    STATE
      OF
      ISRAEL

    

    

    BY: 
      /s/Zvi
      Chalamish        
Chief
      Fiscal Officer of the
Ministry
      of Finance for the
Western
      Hemisphere

     

     

    BY:  
      /s/Ran
      Alon          
Deputy
      Chief Fiscal Officer
of
      the
      Ministry of Finance
for
      the
      Western Hemisphere

     

     

    THE
      BANK
      OF NEW YORK

     

     

    BY: 
      /s/Fredrick
      W. Clark      
Name:
      Fredrick W. Clark
Title:
      Vice President

    
 

    Attest:

     

    

                       
      /s/Luis
      Perez        

    Assistant
      Vice PresidentExhibit
      4(3)

     

    

     

    STATE
      OF
      ISRAEL

    MINISTRY
      OF FINANCE 

     

    OFFICE
      OF
      THE LEGAL ADVISOR

     

                            
      December 28, 2006

     

    Ministry
      of Finance

    Government
      of Israel

    1
      Kaplan
      Street

    Hakiriya,
      Jerusalem 91008

    ISRAEL
      

     

    Re:
      The
      State of Israel (Registration No. 333-139481)

     

    Dear
      Sirs: 

     

         I,
      Legal Advisor to the Ministry of Finance of the State of Israel, have reviewed
      the above-referenced Registration Statement on Schedule B (the “Registration
      Statement”), filed on the date hereof with the United States Securities and
      Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended,
      including the Prospectus constituting a part thereof (the “Prospectus”) and any
      amendments or supplements thereto, and the form of the Underwriting Agreement
      and the Master Fiscal Agency Agreement and Amendment Nos. 1 and 2 thereto filed
      as exhibits to the Registration Statement (the “Agreements”), pursuant to which
      the State of Israel (“Israel”) proposes to issue and sell the Bonds.

     

         The
      issuance of the Bonds has been authorized pursuant to the State Property Law
      of
      the State of Israel. 

     

         It
      is my opinion that when the Bonds have been duly authorized, issued and executed
      by Israel and authenticated, paid for and delivered as contemplated by the
      Agreements, the Prospectus and any amendment and supplement thereto, the Bonds
      will constitute valid and legally binding direct and unconditional obligations
      of Israel under and with respect to the present laws of Israel. 

     

           I
      hereby consent to the filing of this opinion as an exhibit to the Registration
      Statement and to the use of my name under the heading “Validity of the Bonds” in
      the Registration Statement. In giving the foregoing consent, I do not thereby
      admit that I am in the category of persons whose consent is required under
      Section 7 of the Act or the rules and regulations of the Commission
      thereunder. I also consent to the reliance on this opinion by Arnold &
Porter as to any matter relating to the laws of Israel, in connection with
      any
      opinion required to be filed with or delivered to the Commission or to the
      Development Corporation for Israel. 

    
      	 	 	 
	 	 	 
	 	Sincerely,
	 	 
	 	/s/ Yemima Mazouz
	 	 
	 	
              Yemima
                Mazouz, Adv.

              Legal
                Advisor to the Ministry of Finance

              Government
                of IsraelEXHIBIT
      4(4) 

     

    December
      28, 2006

     

    Ministry
      of Finance

    Government
      of Israel

    1
      Kaplan
      Street

    Hakirya,
      Jerusalem 91008

    ISRAEL
      

     

    
      
        
          	
                	Re:	
                  The
                    State of Israel (Registration
                    333-139481)

                

        

      

    

     

    Ladies
      and Gentlemen: 

     

         We
      have acted as special United States counsel for the Government of Israel
      (“Israel”), in connection with the preparation of the registration statement
      under Schedule B (the “Registration Statement”), filed with the Securities
      and Exchange Commission (the “Commission”) under the Securities Act of 1933, as
      amended (the “Act”), pursuant to which Israel is registering U.S.$1,650,000,000
      aggregate principal or maturity amount of its Bonds (the “Bonds”) to be offered
      and sold from time to time as set forth in the Registration Statement and the
      prospectus (the “Prospectus”) contained therein and any amendments or
      supplements thereto. We are also familiar with the form of Underwriting
      Agreement and the Master Fiscal Agency Agreement, including the amendments
      thereto (together, the “Agreements”) filed with the Commission and made a part
      of this Registration Statement. 

     

         In
      rendering the opinion expressed below, we have examined such certificates of
      public officials, corporate documents and records and other certificates and
      instruments, and have made such other investigations, as we have deemed
      necessary in connection with the opinion set forth herein. Furthermore, we
      have
      assumed the genuineness of all signatures, the authenticity of all documents
      submitted to us as originals, the authority of Israel to enter into the
      Agreements and cause the issuance of the bonds, and the conformity to authentic
      originals of all documents submitted to us as copies. As to any document
      originally prepared in any language other than English and submitted to us
      in
      translation, we have assumed the accuracy of the English translation.

     

         This
      opinion is limited to the federal laws of the United States and the laws of
      the
      State of New York, and we do not express any opinion herein concerning the
      laws
      of any other jurisdiction. Insofar as the opinion set forth herein relates
      to
      matters of the law of Israel we have relied upon the opinion of the Legal
      Advisor to the Ministry of Finance of the State of Israel, a copy of which
      is
      being filed as Exhibit 4(3) to the Registration Statement, and our opinion
      herein is subject to any and all exceptions and reservations set forth therein.
      

     

         Based
      upon and subject to the foregoing, we are of the opinion that when the Bonds
      have been duly authorized, issued, and executed by Israel and authenticated,
      paid for and delivered as contemplated by the Agreements, the Prospectus and
      any
      amendment and supplement thereto, the Bonds will constitute valid and legally
      binding direct and unconditional obligations of Israel under the laws of the
      State of New York, subject to bankruptcy, insolvency, reorganization, fraudulent
      conveyance, moratorium, receivership and similar laws relating to or affecting
      creditors’ rights generally and to equitable principles (regardless of whether
      enforcement is sought in a proceeding in equity or at law). 

     

         We
      are also of the opinion that the principal anticipated federal income tax
      consequences of the purchase, ownership, and disposition of the Bonds are as
      set
      forth in that section of the Prospectus entitled “United States Taxation.”

     

         We
      hereby consent to the filing of this opinion as an exhibit to the Registration
      Statement and to the reference to this firm under the headings “United States
      Taxation” and “Validity of the Bonds” in the Registration Statement. In giving
      the foregoing consent, we do not thereby admit that we are in the category
      of
      persons whose consent is required under Section 7 of the Act or the rules
      and regulations of the Commission thereunder. 

     

    

     

    Sincerely,

     

    /s/
      Arnold & Porter LLP

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