Yitzhak Shamir’s second term as Prime Minister was marked by two major events: the 1991 Gulf War, in which Shamir – despite Iraqi missile attacks on Israel’s civilian population – chose a policy of restraint; and the October 1991 Middle East Peace Conference in Madrid that inaugurated direct talks between Israel and the neighboring Arab states as well as multilateral regional talks. Two momentous events overshadowed other issues on the public agenda. The first, beginning in 1989, was the victory in the long struggle for Jewish emigration from the USSR, which brought 450,000 immigrants to Israel in the next two years; the second was “Operation Solomon,” in May 1991, in which 15,000 Ethiopian Jews were rescued and brought to Israel in a massive airlift.
After his party lost the 1992 elections, Shamir stepped down from the party leadership and in 1996 also retired from the Knesset.