A few isolated Jews came to Paraguay from France, Switzerland, and Italy toward the end of the 19th century and merged with the native population without ever establishing a community. On the eve of World War I, a number of Sephardi Jews emigrated from Palestine. The families, Arditi, Cohenca, Levi, Mendelzon, and Varzan, formed the first community, la Alianza Israelita, in 1917 and established the first synagogue with other Sephardim from Turkey and Greece.
A second wave of immigration in the early 1920s brought Jews from the Ukraine and Poland who founded the Ashkenazi community, Union Hebraica. Between 1933 and 1939, between 15,000 and 20,000 Jews from Germany, Austria, and Czechoslovakia took advantage of Paraguay's liberal immigration laws to escape from Nazi-occupied Europe. Most of them used Paraguay or their Paraguayan visas as stepping stones to Argentina, Brazil, and Uruguay where immigration laws were more severe. The small fraction that remained in Paraguay established the Union de Israelitas por Socorro Mutuo. This group built the main synagogue, later located within the premises of the Union Hebraica. After World War II, a last group of immigrants, mostly survivors from the concentration camps, arrived.
There were some short-lived anti-Semitic decrees in 1936, and some anti-Semitic incidents prior to the establishment of the regime of General Alfredo Stroessner in 1954; however, after that, Jews were not disturbed. Paraguay voted in 1947 for the UN Resolution on the partition of Palestine and has always been friendly to Israel. The population, which lost two-thirds of its members in the war against an array of larger nations between 1865 and 1870, tends to empathize with Israel. An Israeli Embassy was established in 1968.
Today, the Jewish community numbers approximately 900, most of whom live in the capital, Asuncion. The intermarriage rate is rising, but most of the intermarried couples provide their children with a Jewish education. The community, however, is declining through immigration to Argentina and Brazil. Cccasionally immigrants come from those countries to Paraguay, especially due to marriage. A trickle of Jews — 50 people since 1948 — have immigrated to Israel.
The community supports a Jewish school named, "Escuela Integral Estado de Israel," at which Hebrew and Jewish studies are taught in addition to the Paraguayan curriculum. The Estado de Israel school is attended by 71 percnet of the Jewish children. About 50 Jewish students are enrolled at the university, in addition to others who study abroad.
Most Paraguayan Jews work in commerce or industry, but the Jewish community is heavily outnumbered by the richer and more influential Arab colony, whose members engage actively in Paraguayan politics and have intermarried with the country's most influential families. There are also some 40,000 Germans or people of German descent, many of whom openly supported the Nazis before and during World War II. A number of prominent Nazis, among them Josef Mengele of Auschwitz, found temporary shelter in Paraguay. In June 2000, neo-Nazis distributed pamphlets at the American University in Asunción. The pamphlets invited all those with complaints against Jews to come to a meeting. Also in 2000, a teacher was dismissed from the same university following a complaint against him of telling anti-Semitic jokes. Despite these incidents, the Jewish community lives, for the most part, undisturbed.
The Jewish community established the Consejo Representativo Israelita del Paraguay, which represents the Jewish community to the public and authorities. Among its achievements is its successful lobbying effort to prevent the closing of the Israel Embassy in Asuncion. Additionally, community leaders exerted pressure on the government after the Buenos Aires DAIA bombing, leading to the extradition from Paraguay of seven Arabs suspected of complicity in the attack.
Asuncion has three synagogues, Ashkenazi, Sephardi and Chabad, which distributes kosher food and provides a mikvah to the community. The city also has a Jewish museum with a Holocaust memorial. Socially and for the youth, there is a Jewish sports club, a B'nai B'rith club, a Centro Israelita Juvenil, a Wizo chapter, and a Ha-No'ar ha-Ziyyoni movement.
Israeli Prime Minister Netanyahu hosted Paraguayan President Horacio Cartes in Jerusalem on July 19, 2016. The leaders met privately as well as with their delegations, and signed a Memorandum of Understanding (MOU) on technical development assistance for Paraguay. Issues of security, water, agriculture, trade, and legal matters were discussed, and a joint declaration was released which can be read here.