The sixtieth anniversary of the founding of the State of Israel was the occasion of parades, philanthropic dinners, celebratory articles and festive events here in the United States, but in Israel the mood was pensive and somber. Israelis did not ignore the milestone, but many called for restraint in marking it. An online petition demanding official frugality for the celebration received more than 90,000 signatures. With a series of corrupt leaders, little hope for lasting peace and the increasing nightmarish possibility of an "Islamic" nuclear weapon making its way into the hands of someone in Tehran who just might use it, Israelis, as pundit after pundit pointedly observed, were in no mood to celebrate.

It has long been the case that Israeli writers and intellectuals engage in a discourse about their nation and its problems that is far richer, more nuanced and grounded in reality than that of their American counterparts. As Barack Obama bravely told a Jewish gathering in Cleveland during the Democratic primary season, he was "struck" while visiting Israel by "how much more open the debate was around these issues in Israel than they are sometimes here in the United States." The contrast between Israeli pensiveness and American cheerleading puts one in mind of an early-twentieth-century remark by one of Zionism's founding philosophers, A.D. Gordon. "We don't have to check the pulse of our nationalism," Gordon said, speaking of the Jews who lived in Palestine. It is, after all, a country full of Jews, as Philip Roth's Portnoy marveled thirty-nine years ago. "Jews eating ices, Jews drinking soda pop, Jews conversing, laughing, walking together arm-in-arm...a sea full of Jews! Frolicking, gamboling Jews!" And they all speak a language that was considered dead for, well, I don't know, a thousand or so years. Even the Arabs speak Hebrew. It's a moving miracle to these eyes and ears today, I have to say, much as it must have been back then.

For reasons I cannot fully explain even to myself, despite an intense feeling of engagement with Israelis and their problems and a constant reading of the Israeli press, Israeli novelists and the global press about Israel, I had not visited there in roughly twenty years until I arrived in the late spring of this year. I was eager to get in touch with the people I had known in the past--including those I had studied under at Tel Aviv University nearly thirty years ago--as well as those I have been reading regularly for the past decades. I wanted to see how they assessed Zionism's successes and failures over the past six decades outside the narrowly restrictive and conflict-focused coverage of our own media. Because most American reporters in Israel live and work in Jerusalem, and their focus is usually on issues related to the Palestinian conflict, terrorism and security, one tends to forget that the country is engaged in much more than a destructive and sometimes brutal occupation, on the one hand, and a fight for survival amid a sea of largely hostile neighbors, on the other.

My biggest shock upon landing at Ben-Gurion Airport, outside Tel Aviv, was to find that Israel is a different country from the one I knew and that lives on in popular mythology. Its population has nearly doubled, thanks in part to the immigration (and largely successful integration) of nearly a million Russian and other Eastern European Jews. This population surge, moreover, has corresponded with an economic and cultural transformation that has turned Israel into the equivalent of a small successful European nation with a per capita income approaching $30,000. Tel Aviv is filled with shiny new skyscrapers, shopping malls, pricey boutiques and expensive, decidedly nonkosher gourmet eateries--all of which are packed, by the way, on Friday night, when religious Jews are supposed to be in synagogue or at home enjoying a Sabbath meal. Israel's cultural and artistic flowering is no less impressive. National museums are participating in a nationwide exhibition of sixty years of Israeli art, which frequently manages to be politically provocative and true to the confusing cultural and physical terrain of this quite young nation. (Remember, Israel is twelve years younger than John McCain.) Galleries are everywhere, and the theater and film industries are thriving. With its hedonistic beaches and Bauhaus architecture, Tel Aviv feels like a Hebrew-speaking Barcelona.

Israel's multicultural moment was nicely embodied for me at a party at the home of Israeli pop star David Broza. Gathered around a feast of grilled shrimp and steaks, dozens of musicians, dancers, choreographers, artists and the like from a dozen or so different counties chatted in Hebrew with one another and then sat down to sing. And what did they pick? Led by Zahi, who, I later learned, is of Yemenite origin, and Beto, who is from Brazil, they launched into a folky-acoustic version of Blackstreet's "No Diggity" (I had to Google the chorus, as I was apparently the only one in the room who didn't know the song). Believe me, no one danced the hora.

The new high-tech, globalized Israel is profoundly different from that built on the foundations of a Spartan collectivist culture of Labor Zionism, with its reification of the anti-individualistic ideology of the kibbutz and the hardscrabble agricultural life. As Aluf Benn, diplomatic editor of Ha'aretz, explains to me, this new nation "is the project of the second generation. My parents took part in the nation-building. My grandparents were pioneers. Our generation traveled abroad, we saw a better standard of living, better services, lower taxes on imports. We were fed up with the socialists' way of thinking." Adds Nissim Calderon, a literary critic and professor at Ben-Gurion University of the Negev, "We are no longer a country of self-sacrificing pioneers."

Benn points out that while the Olso agreements have been widely condemned as a failure by most Israelis (and Americans), they played perhaps the key role in inspiring Israel's economic and cultural renaissance. Nation after nation opened up diplomatic and commercial relations with Israel during the peace talks and almost none closed them down after Oslo's failure. The Arab economic boycott withered away. Israelis saw their opportunity and ran with it. Under the hyper-laissez-faire ideologies of Benjamin Netanyahu, Israel shed most of its state-owned industries and pension funds, creating many multimillionaires in the process. This--just as the capitalist textbooks say it should--unleashed a wealth-creating entrepreneurial spirit that has resulted in a far more vibrant (and unequal) economy as well as a decline in the level of services the socialist state had previously provided.

Naturally the transformation rankles some older Israelis. Veteran filmmaker Amos Gitai, who left the country for Europe in disgust in the 1980s but returned when Yitzhak Rabin came to power and tried to negotiate a peace deal, asks, "Do you need--in order to survive in this region--a shining egalitarian nation or can it just be a Western individualized society?" Answering his own question: "You cannot preserve an idea longer than the idea can survive in reality."

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