Binyamin Netanyahu, the Israeli prime minister, has announced the formation of a committee to look into the soaring cost of living after a quarter-million people marched in one of the biggest protests in the country's history.
The Israeli PM said on Sunday that the committee, headed by Harvard-educated Israeli economist Manuel Trajtenberg, would hold "a broad dialogue with various sectors in the community".
Netanyahu, a champion of free market reform, announced the appointment of the committee of experts at the weekly cabinet meeting to propose socio-economic reform.
But holding out the prospect of "major change", he cautioned he would "not be able to satisfy everyone".
"Over the past few weeks, we have witnessed a public protest that expresses real hardship," he said.
While Netanyahu's governing coalition faced no immediate threat, a summer of discontent in Israel has underscored the potential electoral impact of a burdened middle class rallying under the banner of "social justice" and rewriting a political agenda long dominated by security issues.
In under a month, the popular protest movement has swollen from a cluster of student tent-squatters into a diffuse, countrywide mobilisation of Israel's middle class.
"This movement really is reaching across Israeli society," Al Jazeera's Cal Perry said, reporting from the tent city in central Tel Aviv. "What people will tell you is that the middle class is slowly disappearing."
"The prime minister has formed a committee to take a look at what exactly the protesters want. The president said a few days ago that these are legitimate demands that the protesters have ... And it's going to take a financial burden on this country.
The announcement follows three weeks of protests sparked by complaints over housing costs.
Since then, the protests have gained new momentum as Israelis grow increasingly frustrated with their struggle to make ends meet despite economic growth in the country that is outpacing that of other developed nations.
Saturday’s turnout of over 250,000 people in public squares presented Israel’s most stable government in years with a chorus of discontent it could not afford to ignore.
Prime Minister Benjamin Netanyahu sought to rein in expectations and said Israel would need to proceed cautiously, especially after Standard & Poor’s downgraded the United States’ credit rating on Friday.
“We cannot take all the lists of problems, and all the list of demands, and pretend we will be able to satisfy everyone,’’ Netanyahu said.
“We need to be fiscally responsible, while making some socially sensitive amendments,’’ he said.
After weeks of vague calls for change, protest leaders published a list of specific demands late last week, including the construction of affordable housing and a reduction of the 16 percent sales tax. It is not clear how they would pay for the array of services they are demanding.
The government committee will present its recommendations within a month, according to Gidi Schmerling, a Netanyahu spokesman.
Netanyahu “has defined a goal - to correct social wrongs - and he will work towards that goal in a genuine and intensive manner,’’ Schmerling said.
The protest organizers, a loosely organized group of young Israelis stunned by the mass response to their complaints, have called for a million-person march in 50 cities across the country on Sept. 3.
Although they have sought to steer clear from appearing political in their calls for reform, the mass rallies have given voice to the growing wealth disparity in the country and what critics contend is an inequitable distribution of government resources.
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