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One Israel was formed by Labour Party leader Ehud Barak in the run up to the 1999 elections with the aim of making the Labour Party appear more centrist and to reduce its secularist and elitist reputation amongst Mizrahi voters (Gesher was led by prominent Mizrahi politician and former Likud MK David Levy whilst Meimad is a religious party) modelled on Tony Blair's transformation of the British Labour Party into New Labour. The coalition agreement gave Gesher the number three spot on the list (behind Barak and Shimon Peres), two other safe positions and a promise that Levy would get a ministerial position. Meimad were promised one safe spot on the list and a ministerial position for a member who did not make it into the Knesset.
In the run-up to the election surveys predicted the party would win 33 seats. However, although One Israel did emerge as the largest faction in the Knesset, its 26 seats was the lowest ever by a winning party (Labour's 34 in the 1996 elections whilst running alone had been the previous low). Of the 26 seats, Labour took 22, Gesher 3 and Meimad one. As per the pre-election agreement, Levy was appointed Deputy Prime Minister and Minister of Foreign Affairs and Meimad's Michael Melchior was made Minister of Social and Diaspora Affairs.
Barak, who had beaten Binyamin Netanyahu in the election for Prime Minister, had to form an unstable coalition government with six other parties; Shas, Meretz, Yisrael BaAliyah, the Centre Party, the National Religious Party and United Torah Judaism.
Barak's participation in the Camp David Summit with Yasser Arafat in summer 2000 led to Gesher pulling out of the alliance on 4 August and the end of One Israel. Labour and Meimad continued as a joint faction Labour-Meimad.
After the party's collapse, Barak was investigated following allegations that the One Israel had broken the party funding law by allowing money from abroad to be directed into campaign funds through non-profit groups in order to get around spending limits. State Comptroller Eliezer Goldberg had already fined the party 13 million shekels for breaking fundraising laws. It later became known as the "Barak Organisation Affair".
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