The recent war in Lebanon left a cloud over Prime Minister Ehud Olmert, Peretz, and IDF Chief of Staff Dan Halutz. The resignations of two senior IDF commanders seem to be creating a snowball effect that could envelope Halutz, Peretz, and ultimately Olmert himself.

Topic B, close behind and related in the national and media mind, is the ongoing shelling of Sderot, a working-class town in southern Israel, and what should be done about it. Hamas, which rules the Palestinian Authority, has taken "credit" for these rocket attacks aimed at civilian areas, which have killed ten people and wounded more than 100 since Israel withdrew completely from Gaza in August 2005.

A sub-plot attracting attention is the sparing between Arkady Gaydamak, a flamboyant billionaire immigrant from Russia who bussed about a thousand people from Sderot for an all-expenses-paid vacation in Eilat, and Olmert, who criticized him for encouraging a freelance evacuation of the city.

Topic C, of course, is Iran, and increasingly vocal concerns that Israel will be forced to confront the growing threat of a nuclear Iran, since the world, including the U.S., has decided not to. Though Israel is loathe to lead this effort, which it is ill-equipped to do on its own, the sense is that if current trends continue there will be no choice.

These security related topics have overshadowed matters of business, culture, and society. Fortunately, aside from a spate of public sector strikes aiming to block the privatization of a bank that provided perks to these workers, the economic mood is upbeat, as tourism, investment, and economic growth have all returned impressively since the war in Lebanon ended less than three months ago. The economy is the ray of light managing to stay bright in an otherwise disheartening picture of a leadership crisis in the face of growing threats.