BEIT SHEMESH, ISRAEL — AMERICAN ONLOOKERS can't understand how the Likud party keeps bashing Labor and why the Israeli voter doesn't overwhelmingly choose Labor, for Labor is committed to peace.
What they overlook is Shimon Peres' unpopularity with the public: He has failed in his last five attempts to head an Israeli government. As a political party Labor's future is just as dim, considering that most of the Russian immigrants coming to Israel now will most likely be future supporters of Likud due to their own bad experiences with socialism and the little exposure they've had to liberal ideas.
Labor's demise comes as no surprise to most Israelis. In the municipal elections last winter (more representative of the mood of the electorate, as -- unlike the national elections -- mayors are directly elected), Labor experienced a crushing defeat, losing even traditional strongholds to Likud.
Labor's problems can be traced to the aftermath of the 1973 Yom Kippur War, which saw Israel nearly defeated as a result of a huge intelligence failure of Golda Meir's government. Israel lost 3,500 soldiers; confidence in the ruling aristocracy plummeted. The decline continued when a government-appointed commission of inquiry into the mistakes of the war proved to be a whitewash.
Though out of power since 1977, Labor is still still perceived as ''the establishment,'' due to its ties with major economic forces in the country: the Histadrut Federation of Trade Unions, the Kibbutzim, Koor Industries. In the Fifties and Sixties these links were an asset, as Labor could reward political loyalty with employment. Today these enterprises need government bailouts to stave off creditors; they are electoral liabilities.
Labor and Likud differ in the way they choose their candidates for the Knesset. The entire party names Likud's slate, a job done in Labor by a central committee. The result is fewer younger faces in key spots on the Labor ticket as old-timers like Mr. Peres, Yitzhak Rabin, Mordechai Gur, Yitzhak Navon and Haim Bar-Lev cling to power. The youngest Labor parliamentarian is ,, over 50 and the average age is nearly 60.
Labor has also paid a price for the intifada. According to a poll conducted by the Jaffe Center for Strategic Studies in Tel Aviv, Labor voters were the only group that experienced a moderation of views over the period 1987-1989 in respect to the Arab-Israeli conflict.
''This demonstrates the impossibility of Labor's position,'' says Asher Arian, a political scientist at Tel Aviv University and co-author of the poll. ''The party's voters were a group that ran counter to the dominant trends in society, which because of the intifada are turning more and more to the right end of the political spectrum.''
But does Likud continue to rule Israel because it is the least unpopular of the two major parties, or do its policies more accurately reflect the wishes of the Israeli majority?
For this majority of Sephardim, or Jews from Arab countries who came to Israel in the early 1950s, the Labor Party's tired and worn faces remind them of everything that is wrong in Israel: bureaucracy, socialism, bankrupt state-owned enterprises and a crumbling health-care system. Likud's populist approach, promising peace through strength and a free economy, offers a fresh, positive outlook.
For the most part the Sephardim are content with their lives as taxi drivers, fruit-stall owners, tradesmen and craftsmen. They say they have everything they need: national independence, ethnic and religious pride, cars, videos, foreign travel and education for their children.
Shimshon, a cab driver in the predominantly Sephardic town of Beit Shemesh where I live, bluntly laid it out during a half-hour ride to Jerusalem:
''Unlike Labor and the intellectuals, we're not lamenting over the loss of an Israeli soul which we neither created nor had a part in destroying. We have no socialist dogma about the Jewish religion and can live without a total separation of church and state. We've tasted the rotten fruits of a socialist economy and prefer to go it alone in an open and free market. What then do Labor and Peres have to offer us?
''The reason we support the Likud is because we don't share these heartwarming liberal ideas of how the Arabs should behave. We lived in the Arab world, speak their language and understand better than any European that the Arabs have their own unique value-system which has created a political culture where compromise and moderation are not necessarily a viable option. We understand that. Honor and strength is important to them. We respect this.''
This aspect of Israeli political culture rarely surfaces on CNN or ''Nightline,'' but this is the Israel that America and Western Europe will eventually have to contend with. Overlooking them is futile from an Israeli perspective as skirting the PLO is in the Arab viewpoint.
The age of an Israel ruled by Eastern European social democrats is over. The ''new Israel'' sees things in a Middle Eastern context. The Labor Party is just the first causality.
Mr. Bainerman is a journalist with the Jerusalem Post.