This chapter provides an overview of Israel’s well-developed communityoriented primary care system and its exceptional contribution to improving the quality of health care while containing costs. It describes its strengths and weaknesses and focuses on the challenges that now face Israel. The chapter starts by acknowledging Israel’s world-class quality monitoring mechanism for community care which sets a blueprint for others to follow, but which has the potential for further development. It then highlights the need to strengthen co-ordination between community and hospital care. Recent changes to the resource allocation formula signal Israel’s commitment to redressing geographical differentials in health care capacity between central regions of the country and the North and South, but they need to go further if real change is to be realised. Attention is drawn to serious shortfalls in numbers of physicians and registered nurses, and the need to develop strategies that bolster their numbers and ensure staff are drawn into Israel’s periphery. The chapter also notes that public health and primary prevention services need strengthening.