Israel Finance Ministry, Yearly Pension Plan Report

STATE OF ISRAEL

This description of the State of Israel is dated as of June 28, 1999 and appears as Exhibit D to the State of Israel's Annual Report on Form 18-K to the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 1998.

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* These areas are subject to interim agreements between Israel and the Palestinian Authority. The Palestinian Authority has gradually taken responsibility for administering certain self rule areas, including most of the Gaza Strip and the cities of Bethlehem, Jenin, Jericho, Kalkilia, Nablus, Ramallah, Tulkarem and part of Hebron.

Except as otherwise specified, all amounts in this report are expressed in New Israeli Shekels ("NIS") or in U.S. dollars ($, dollars or USD). Any amounts stated in U.S. dollars in this report as of a stated date or for a stated period that were converted from NIS into U.S. dollars were converted at the foreign exchange representative rate for U.S. dollars on such date, or at the average of the foreign exchange representative rates for U.S. dollars for each day during such period, as published by the Bank of Israel. The foreign exchange representative rate for U.S. dollars for any day is calculated by the Bank of Israel as the average of the NIS/$ buying and selling rates prevailing in the market on such date. The NIS/$ exchange representative rates as of the following dates and for the following periods were:

Table No. 1

NIS/U.S. Dollar Exchange Rates

	Year
	1994	1995	1996	1997	1998
End	3.018	3.135	3.251	3.536	4.160
Average	3.011	3.011	3.188	3.449	3.800

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Source: Bank of Israel

On June17, 1999, the Bank of Israel foreign exchange representative rate for U.S. dollars was 4.071 NIS per U.S. dollar. For a discussion of the convertibility of the NIS, see "Balance of Payments and Foreign Trade-Foreign Exchange Controls and International Reserves."

The fiscal year of the Government of Israel (the "Government") ends December 31. The twelve month period ended December 31, 1998 is referred to in this Prospectus as "1998" and other years are referred to in a similar manner.

Totals in certain tables in this report may differ from the sum of the individual items in such tables due to rounding. Unless otherwise specified, amounts in NIS or U.S. dollars are given in current amounts.