As Israel marks its 60th birthday, its citizens would seem to have plenty to celebrate. Situated on a patch of stony land, democratic Israel has endured the ravages of war and terrorism and an assortment of enemies sworn to destroy it. Israelis have managed to revive Hebrew, a 4,000-year-old language, and turn it into a vibrant instrument of elegant novelists and growling rappers. In cities like Tel Aviv and Haifa, the high-tech industry has produced years of robust growth and fostered a culture of creativity and inventiveness that is the envy of the Middle East.
But the mood in Israel today...