It was an almost unbelievable news story: in order to trim the national budget, the Ministry of Education had decided to dismiss hundreds of teachers. A private company got the job of delivering the bitter news to the dismissed teachers. Two days before Passover - one of the highpoints of the Jewish calendar, both for religious and secular Jews, when families sit together around the table for the joyous Seder ceremony - the messengers of the company spread out to do their job. They knocked on the doors at midnight and delivered the notices.

Even the Israeli public, which does not get excited any more about anything, was shocked for a moment. How could such a thing happen? Couldn't they have waited until after the feast? What brutality!

For me, it was much more than a mistake of some government office. This is a symbolic act, which reflects all that is wrong in today's Israel.

First of all, the cruelty. It wasn't deliberate, of course. The Minister of Education did not tell the private contractor: hand them the notice in as painful a way as possible. The contractors, too, did not sit down and decide: let's do it just before Passover and knock on their doors in the middle of the night, like Stalin's secret police or our undercover soldiers in Nablus.

No, nobody decided. Nobody thought about it. And that is really the most shocking part: the total insensitivity.

Even three or four years ago, this would not have been possible. Somebody would have intervened in time and shouted: "What are you doing? Are you crazy?"

The Jews always defined themselves as "the compassionate sons of the compassionate". They believed that compassion is a Jewish invention and quoted the old texts (such as the Sabbath injunction in the Ten Commandments, ordering Jews to relieve their slaves and draft animals every seventh day.) Nietzsche, who abhorred pity, accused Judaism of creating a morality of pity.

The new Hebrew society that was created in this country was always proud of its "mutual responsibility", the fact that nobody went hungry in our society, that the incapacitated, sick, old and unemployed were protected by the whole of society. Once, when I was asked what being a Jew meant to me in my childhood, I mentioned compassion, together with seeking justice, hating violence, striving for peace and loving education.

Not any more. After two years of the al-Aksa intifada , the senses of Israeli society have become almost completely blunted. The terrible things that happen daily in the occupied territories pass without mention. "Closures" and curfews that last for months, hunger and thirst, sick people dying for lack of treatment, the demolition of homes and the uprooting of groves - these are "small change", routine matters. Men, women and children shot by snipers in their homes and on the streets? Who cares. A young American woman crushed to death by a giant bulldozer while trying to prevent the demolition of a Palestinian home? So what. She deserved it, anyway. A stone-throwing Palestinian boy shot dead by a tank? Three lines in the paper. Maybe not even that.

The callousness has spread from the occupied territories into Israel itself. Photos in the paper show people rummaging in garbage bins? Well, that's how it is. Government offices send hungry poor people to get a free meal at private charities? Who cares.

The new Minister of the Treasury, Binyamin Netanyahu, a man who receives 50 thousand dollars for a single lecture in the United States, has submitted an economic plan that hurts the poorest of the poor. It reduces monthly old-age allowances (to less than $300), child allowances, unemployment payments, subsidies for homes for retarded children and the elderly and the education and health budgets.

Does the public revolt? Do masses of students take to the streets? Do the media explode in anger? Does the opposition in the Knesset (if there is such an animal) shake heaven and earth? Not at all. The Trade Union Federation (Histadrut), representing the strongest and richest workers' committees, threatens a general strike. What else? Here and there a politician issues a statement, hoping to get into the headlines. Here and there a handful of people of conscience protest. Here and there a columnist writes an indignant article. And that's that. So the poor will be a little poorer and the rich a little richer. Big deal.

When Netanyahu himself is asked about the plan, he takes to the well-established Israeli line: There is no alternative. The Israeli economy is sinking. It's all the fault of Arafat. The intifada has destroyed our economy,

And that is a new thing altogether with far-reaching implications.

This needs an explanation: for more than five decades, Israeli society has enjoyed the sweet illusion that there is no connection at all between our policy towards the Arabs and our economic situation. This is a cornerstone of our national consciousness.

During my ten years in the Knesset, I made at least a hundred speeches on this one point. In economic debates I pointed to the security policy and the occupation. In debates about security policy, I raised questions about the economic price.

Each one of these speeches aroused a furious and impatient reaction from all parts of the House. In security debates they shouted at me: "What has that to do with the economy? We are now speaking about terrorism!" In economic debates they shouted: "We are discussing the economy, so what are you dragging your Palestinians into this for!" (Only once in all those years, a Deputy Minister of the Treasury took me aside in the corridor and said: "You are the only one who made sense." (Not being an economist, I was flattered.)

This ignoring of the price of the war and the occupation has had curious results: the poorest people, the unemployed and the inhabitants of the run-down so-called "development towns" have always voted Likud. In the last elections, they voted solidly for Sharon. They had only two demands: to screw the Arabs and to put an end to the economic crisis. They saw no contradiction between the two.

But for some months now, there has been a change in public consciousness. In order to counter the accusation that the government's economic policy has caused the depression, the Sharon people have had to admit that the intifada is the main cause, even if the worldwide crisis added to it. The intifada dealt a terrible blow to tourism, one of the most important sectors of our economy. Foreign investments, which are essential to economic growth, have all but stopped. The giant army necessary for the fight against the intifada, together with the settlers, devour a huge proportion of our GNP (many times more, per capita , than in the USA).

Some people believe that if the depression deepens, the "weak strata" (as the poor are called in Israel) will one day rise against the Sharon government, the masses will pour onto the streets and topple it. That may be too optimistic. But at least one can dream about the night when, at midnight, the people knock on the door of the government and hand it a notice of dismissal.