The greatest asset brought by the Zionists settling Palestine was their organizational acumen, which allowed for the institutionalization of the movement despite deep ideological cleavages. The WZO established an executive office in Palestine, thus implementing the language of the Mandate prescribing such an agency. In August 1929, the formalized Jewish Agency was established with a council, administrative committee, and executive. Each of these bodies consisted of an equal number of Zionist and nominally non-Zionist Jews. The president of the WZO was, however, ex officio president of the agency. Thereafter, the WZO continued to conduct external diplomatic, informational, and cultural activities, and the operational Jewish Agency took over fundraising, activities in Palestine, and local relations with the British Mandate Authority (administered by the colonial secretary). In time, the World Zionist Organization and the Jewish Agency became two different names for virtually the same organization.

Other landmark developments by the WZO and the Jewish Agency under the Mandate included creation of the Asefat Hanivharim (Elected Assembly--see Glossary) and the Vaad Leumi (National Council) in 1920 to promote religious, educational, and welfare services establishment of the chief rabbinate in 1921 centralized Zionist control of the Hebrew school system in 1919, opening of the Technion (Israel Institute of Technology) in Haifa in 1924, and dedication of the Hebrew University of Jerusalem in 1925 and continued acquisition of land--largely via purchases by the Jewish National Fund--increasing from 60,120 hectares in 1922 to about 155,140 hectares in 1939, and the concurrent growth of Jewish urban and village centers.

The architect of the centralized organizational structure that dominated the Yishuv throughout the Mandate and afterward was Ben- Gurion. To achieve a centralized Jewish economic infrastructure in Palestine, he set out to form a large-scale organized Jewish labor movement including both urban and agricultural laborers. In 1919 he founded the first united Labor Zionist party, Ahdut HaAvodah (Unity of Labor), which included Poalei Tziyyon and affiliated socialist groups. This achievement was followed in 1920 by the formation of the Histadrut, or HaHistadrut HaKlalit shel HaOvdim B'Eretz Yisrael (General Federation of Laborers in the Land of Israel).

The Histadrut was the linchpin of Ben-Gurion's reorganization of the Yishuv. He designed the Histadrut to form a tightly controlled autonomous Jewish economic state within the Palestinian economy. It functioned as much more than a traditional labor union, providing the Yishuv with social services and security, setting up training centers, helping absorb new immigrants, and instructing them in Hebrew. Its membership was all-inclusive: any Jewish laborer was entitled to belong and to obtain shares in the organization's assets. It established a general fund supported by workers' dues that provided all members with social services previously provided by 2000 individual political parties. The Histadrut also set up Hevrat HaOvdim (Society of Workers) to fund and manage large-scale agricultural and industrial enterprises. Within a year of its establishment in 1921, Hevrat HaOvdim had set up Tenuvah, the agriculture marketing cooperative Bank HaPoalim, the workers' bank and Soleh Boneh, the construction firm. Originally established by Ahdut HaAvodah after the Arab riots in 1920, the Haganah under the Histadrut rapidly became the major Jewish defense force (see Historical Background , ch. 5).

From the beginning, Ben-Gurion and Ahdut HaAvodah dominated the Histadrut and through it the Yishuv. As secretary general of the Histadrut, Ben-Gurion oversaw the development of the Jewish economy and defense forces in the Yishuv. This centralized control enabled the Yishuv to endure both severe economic hardship and frequent skirmishes with the Arabs and British in the late 1920s. The resilience of the Histadrut in the face of economic depression enabled Ben-Gurion to consolidate his control over the Yishuv. In 1929 many private entrepreneurs were forced to look to Ahdut HaAvodah to pull them through hard economic times. In 1930 Ahdut HaAvodah was powerful enough to absorb its old ideological rival, HaPoel HaTzair. They merged to form Mifleget Poalei Eretz Yisrael (better known by its acronym Mapai), which would dominate political life of the State of Israel for the next two generations (see Multiparty System , ch. 4).

The hegemony of Ben-Gurion's Labor Zionism in the Yishuv did not go unchallenged. The other major contenders for power were the Revisionist Zionists led by Vladimir Jabotinsky, who espoused a more liberal economic structure and a more zealous defense policy than the Labor movement. Jabotinsky, who had become a hero to the Yishuv because of his role in the defense of the Jews of Jerusalem during the riots of April 1920, believed that there was an inherent conflict between Zionist objectives and the aspirations of Palestinian Arabs. He called for the establishment of a strong Jewish military force capable of compelling the Arabs to accept Zionist claims to Palestine. Jabotinsky also thought that Ben- Gurion's focus on building a socialist Jewish economy in Palestine needlessly diverted the Zionist movement from its true goal: the establishment of a Jewish state in Palestine.

The appeal of Revisionist Zionism grew between 1924 and 1930 as a result of an influx of Polish immigrants and the escalating conflict with the Arabs. In the mid-1920s, a political and economic crisis in Poland and the Johnson-Lodge Immigration Act passed by the United States Congress, which curtailed mass immigration to America, spurred Polish-Jewish immigration to Israel. Between 1924 and 1931, approximately 80,000 Jews arrived in Palestine from Central Europe. The Fourth Aliyah, as it was called, differed from previous waves of Jewish immigration. The new Polish immigrants, unlike the Bolshevik-minded immigrants of the Second Aliyah, were primarily petty merchants and small-time industrialists with their own capital to invest. Not attracted to the Labor Party's collective settlements, they migrated to the cities where they established the first semblance of an industrialized urban Jewish economy in Palestine. Within five years, the Jewish populations of Jerusalem and Haifa doubled, and the city of Tel Aviv emerged. These new immigrants disdained the socialism of the Histadrut and increasingly identified with the laissez-faire economics espoused by Jabotinsky.

Another reason for Jabotinsky's increasing appeal was the escalation of Jewish-Arab violence. Jabotinsky's belief in the inevitable conflict between Jews and Arabs and his call for the establishment of an "iron wall" that would force the Arabs to accept Zionism were vindicated in the minds of many Jews after a confrontation over Jewish access to the Wailing Wall in August 1929 turned into a violent Arab attack on Jews in Hebron and Jerusalem. By the time the fighting ended, 133 Jews had been killed and 339 wounded. The causes of the disturbances were varied: an inter- Palestinian power struggle, a significant cutback in British military presence in Palestine, and a more conciliatory posture by the new British authorities toward the Arab position.

The inability of the Haganah to protect Jewish civilians during the 1929 riots led Jewish Polish immigrants who supported Jabotinsky to break away from the Labor-dominated Haganah. They were members of Betar, an activist Zionist movement founded in 1923 in Riga, Latvia, under the influence of Jabotinsky. The first Betar congress met at Danzig in 1931 and elected Jabotinsky as its leader. In 1937, a group of Haganah members left the organization in protest against its "defensive" orientation and joined forces with Betar to set up a new and more militant armed underground organization, known as the Irgun. The formal name of the Irgun was the Irgun Zvai Leumi (National Military Organization), sometimes also called by the acronym, Etzel, from the initial letters of the Hebrew name. The more extreme terrorist group, known to the British as the Stern Gang, split off from the Irgun in 1939. The Stern Gang was formally known as the Lohamei Herut Israel (Fighters for Israel's Freedom), sometimes identified by the acronym Lehi (see Glossary). Betar (which later formed a nucleus for Herut--see Appendix B) and Irgun rejected the Histadrut/Haganah doctrine of havlaga (self-restraint) and favored retaliation.

Although the 1929 riots intensified the Labor-Revisionist split over the tactics necessary to attain Jewish sovereignty in Palestine, their respective visions of the indigenous Arab population coalesced. Ben-Gurion, like Jabotinsky, came to realize that the conflict between Arab and Jewish nationalisms was irreconcilable and therefore that the Yishuv needed to prepare for an eventual military confrontation with the Arabs. He differed with Jabotinsky, however, on the need to make tactical compromises in the short term to attain Jewish statehood at a more propitious time. Whereas Jabotinsky adamantly put forth maximalist demands, such as the immediate proclamation of statehood in all of historic Palestine--on both banks of the Jordan River--Ben-Gurion operated within the confines of the Mandate. He understood better than Jabotinsky that timing was the key to the Zionist enterprise in Palestine. The Yishuv in the 1930s lacked the necessary military or economic power to carry out Jabotinsky's vision in the face of Arab and British opposition.

Another development resulting from the 1929 riots was the growing animosity between the British Mandate Authority and the Yishuv. The inactivity of the British while Arab bands were attacking Jewish settlers strengthened Zionist anti-British forces. Following the riots, the British set up the Shaw Commission to determine the cause of the disturbances. The commission report, dated March 30, 1930, refrained from blaming either community but focused on Arab apprehensions about Jewish labor practices and land purchases. The commission's allegations were investigated by an agrarian expert, Sir John Hope Simpson, who concluded that about 30 percent of the Arab population was already landless and that the amount of land remaining in Arab hands would be insufficient to divide among their offspring. This led to the Passfield White Paper (October 1930), which recommended that Jewish immigration be stopped if it prevented Arabs from obtaining employment and that Jewish land purchases be curtailed. Although the Passfield White Paper was publicly repudiated by Prime Minister Ramsay MacDonald in 1931, it served to alienate further the Yishuv from the British.

The year 1929 also saw the beginning of a severe economic crisis in Germany that launched the rise of Adolf Hitler. Although both Germany and Austria had long histories of anti-Semitism, the genocide policies preached by Hitler were un6bc unprecedented. When in January 1930 he became chancellor of the Reich, a massive wave of mostly German Jewish immigration to Palestine ensued. Recorded Jewish immigration was 37,000 in 1933, 45,000 in 1934, and an all- time record for the Yishu of 61,000 in 1935. In addition, the British estimated that a total of 40,000 Jews had entered Palestine without legal certificates during the period from 1920 to 1939. Between 1929, the year of the Wailing Wall disturbances, and 1936, the year the Palestinian Revolt began, the Jewish population of Palestine increased from 170,000 or 17 percent of the population, to 400,000, or approximately 31 percent of the total. The immigration of thousands of German Jews accelerated the pace of industrialization and made the concept of a Jewish state in Palestine a more formidable reality.

Data as of December 1988