The main events, which occurred during the term of the 12th Knesset were the continuation of the intifada, the Gulf War and and the beginning of the Middle East peace process. During the first 15 months of the 12th Knesset another national unity government served, even though according to the political make-up of the Knesset, the Likud could have formed a narrow government. The government was forced to resign after the Knesset passed a motion of no-confidence on March 15, 1990, with the Labor Party voting in favor and five of the six Shas MKs being absent.
Thoughout the term of the 12th Knesset the intifada continued to rage in Judea, Samaria and the Gaza Strip, and several grave terrorist attacks occurred, including the deliberate rolling down of bus No. 405 into a ravine along the Tel Aviv-Jerusalem road, in which 14 passangers were killed. Additional serious events connected with the intifada were the disturbances on the Temple Mount during the Feast of Tabernacles, which ended with the killing of 20 Palestinians and the wounding of 53 on the Mount by the Israeli security forces, and the murder of seven Palestinian workers by Ami Popper in Rishon Letzion on May 20, 1990.
On May 15, 1989, the government announced a peace initiative, at the center of which were the opening of talks with Palestinians from the territories and the handling of elections there. It was emphasized that no talks would be held with the PLO. The National Unity Government fell apart against the background of differences of opinion on how the negotiations should be run, and the nature of the agreement to which Israel should strive. These were issues widely debated by the public and in the Knesset. Following the Gulf War, in which, at the request of the U.S., Israel remained passive, even though it suffered at least 40 direct hits by Iraqi Scud missiles, the peace process was given a new impetus and changed course, with the Madrid Conference at its center.
The Conference convened in the Spanish capital at the end of October 1991, and following it, bilateral talks opened between Israel and its neighbors, as well as multilateral talks on specific issues. Within this framework as well, Israel refused to hold contacts with Palestinians directly and officially connected to the PLO, and many discussions took place on this issue both within and outside the Knesset.
Following Israel's policy of constraint in the course of the Gulf War and the Madrid Conference, a significant improvement occurred in Israel's inernational status, which manifested itself in a significant rise in the number of states maintaining diplomatic relations with it. The Arab boycott was also implemented less rigorously and the U.S. involvement in the peace process intensified. However, towards the end of the period the tension between Israel and the U.S. grew against the background of the Washington's conditioning the granting of 10 billion dollars worth of American loan guarantees for the absorption of new immigrants, on the stoppage of all settlement activities in the territories.
Other issues which were dealt with in this period were the immigration from the Soviet Union, and later the republics of the former Soviet Union, and especially the question of "Direct absorption". "Operation Solomon", which took place on Ma 24, 1991, involved the flying of 15,000 Ethiopian Jews directly from Ethiopia to Israel.
The distress of the Jews who remained in Yemen and Syria also came up for discussion. Other issues dealt with by the 12th Knesset were: the Demjanjuk trial; the placing ofthe "Voice of America" transmitters in the Arava; the problems of battered children, youth in distress and violence among youth, and the problem of the adoption of children abroad; the problem of foreign workers in Israel; the AIDS problem and the "Betzelem" reports on human rights violations. In this period the second television channel and cable TV started to function in Israel, and direct broadcasts from the Knesset plenum were begun.
In the course of the term of the 12th Knesset three important basic laws were enacted: the Basic Law: Freedom of Occupation, the Basic Law: Human Dignity and Freedom, and the new version of the Basic Law: the Government, which introduced the system of the direct election of the Prime Minister. As a result of the ugly horse-trading that went on in the efforts to form a new government in the three months after the government was brought down in March 1990, the Basic Law: the Knesset was amended in order to limit manifestations of "Kalanterism" - the phenomena of politicians changing political parties in return for material benefits. There was also an increase in the number of petitions to the High Court of Justice, in connection with the work of the Knesset, and the Knesset held numerous debates that dealt with the functioning of the government system and the Knesset.
Sources: The Knesset