We can't really talk about Israel without going into politics.
The politics in Israel was one of the main things I didn't miss while traveling with Up With People :)
There are so many conflicts...
I'm going to talk about few of them, and not with the same focus.
The main issue in the news right now might be the attempt to free Gilad Shalit:
More general issues would be:
Relationship with the Arabics: The way to treat the terrorists threat, the way to react to arabic actions. The status of arabic people who live (legally or not) in Israel.
How much Judaism is part of Israel? should we make it easier for jews to come to Israel (since it was founded as shelter for jews), should we have laws to ensure jewish majority in the population? The jewish laws reflect greatly on the country law: We celebrate Jewish holidays and events, You can only get married or divorced by a specific religious groups, which means that a Christian and a jew can not get married together in Israel, not to talk about gay marriage (You can however get married outside of Israel and get a union recognition). Some other processes require religious approval, and a lot of organizations (like public transportation) are not allowed to work on saturday because of religious reasons.
The status of immigrants (legal or not).
The salary of teachers (because the level of schools seems to drop down)
The amount of money that goes to the military, should the service be required? what should be the status of someone who escapes the military?
The amount of money that goes into social needs. Right now there are plenty of new laws to protect the employees, that harms the employers, and makes it almost imposible to fire an employee. The irony is that the employees who need this protection, are the ones who's employers don't follow the laws any way.
And an ongoing subject is the corruption in politics, people in politics keep getting caught and jailed for different crimes (our last president is accused at the moment in sexual harassment), and the public get frustrated from the system, since there is no one to vote for. Democracy is defiantly not something to be proud of, a lot of adjustments are needed. My father says that a key element to improve the system would be to make sure everyone in politics studied to get there (like a test in politics). He have some other ideas that I don't remember at the moment.