As the last week of the Jewish Year wound to a close, it was appropriate for Tel Aviv to be dominated by the annual DLD Conference. High tech presentations filled one of the major boulevards, parties to network and celebrate innovation were scattered across the beach and in bars throughout the city, all of which complemented the core conference sessions that took place in an old converted train station. Ten delegations, totaling 300 people came here from China. Large contingents from Japan, Singapore, Brazil, Norway, as well as many other points near and far were also represented. According to Israeli venture capital doyen and DLD Conference Chairman Yossi Vardi — “This year’s gathering was the biggest ever.” For the first time, Vardi had to close registration a week before the conference began.

The DLD conference is emblematic of the duality that is Israel at the close of the Jewish year 5778, i.e., a country whose economic boon steadily continues and whose reputation as the ‘startup nation’ remains unique. During the first half of this past year, Israeli startups raised over $3 Billion in fresh financing.

Partly as a result of the robust economy, 89% of Israelis recently surveyed stated they were happy with their lives. The same survey also revealed that in a country with a population 8.9 million, a remarkable 7.6 million Israelis have traveled abroad.

Ironically, the very same week thousands were busy exalting Israeli technology in peaceful Tel Aviv, the Israeli army confirmed Israel had attacked targets in Syria 200 times during the last 18 months. Twice in the past two months, it looked like we might be dragged into another war in Gaza with Hamas (a risk that has not diminished). Hundreds of acres of Israeli fields along the Gaza border have been destroyed by incendiary balloons sent by our Gaza neighbors.

Next week will mark 25 years since Israel signed the Oslo Accords with the Palestinian Liberation Organization. The accord brought about mutual recognition between Israel and the Palestinians, and allowed the PLO to establish a presence in the West Bank and Gaza. Back then, most Israelis were optimistic peace could be achieved soon. Most believed the solution to Israeli-Palestinian dispute was a two-state solution. Polls today show 89% of Israelis expressed pessimism at the chances peace could be achieved in the coming year. Support for a two-state solution has fallen among Israeli Jews to the lowest point since the Oslo Accord, with 47% in favor and 46% opposed. 25 years of terror attacks, wars in Lebanon and with Gaza have left the Israeli public decidedly discouraged regarding the chances of peace.

It's not only when it comes to peace that Israeli are troubled. 78% are unhappy with the current state of affairs regarding the role of religion in the state. For those in “progressive” Tel Aviv, this year has seemed to be an unending battle for Israel’s liberal soul; a fight against the government’s passing of what were seen as a number of illiberal laws. At the Global Cities Summit (part of DLD week), when Tel Aviv Mayor Ron Huldai was asked what were some of the significant challenges he faced as mayor, Huldai responded — ensuring Tel Aviv continues to carry the torch of freedom in the arts and culture for the country.

I asked Yifat Oren, CEO of Leumi Tech, recently named one of Israel’s 100 most influential people by The Marker newspaper, how she explains the ability of Israelis to be so happy about their lives, despite the lack of peace and the fact our children all still must serve in the army— her response: “It is a very good question you raised. I think Israel is very unique in that people have a sense of purpose, [i.e.] making the Jewish State strong, defending it to make sure it lasts. The overall economy is doing well, unemployment is very low, the weather is great. It is very important people are living near their families and are not lonely ... people are very close to their communities (whether it be their neighborhood, their work colleagues, the people they served with in the army). All those things are probably what makes people content.”

On the face of it, 5778 was indeed an outstanding year for Israel. The American embassy was moved to Jerusalem (under President Trump, the US government has been tremendously supportive of Israel), and terror has reached record lows. Nevertheless, despite the fact the average Israeli is very satisfied with his or her life, most people realize that the good times are unlikely to continue forever, and the many fundamental challenges Israel faces will have to be met sooner, rather than later.