Israel and Vatican City establish full diplomatic relations.

Vatican City ( (listen)), officially the Vatican City State (Italian: Stato della Citt del Vaticano; Latin: Status Civitatis Vaticanae), is an independent city-state and enclave surrounded by Rome, Italy. The Vatican City State, also known simply as the Vatican, became independent from Italy with the Lateran Treaty (1929), and it is a distinct territory under "full ownership, exclusive dominion, and sovereign authority and jurisdiction" of the Holy See, itself a sovereign entity of international law, which maintains the city state's temporal, diplomatic, and spiritual independence. With an area of 49 hectares (121 acres) and a population of about 453, it is the smallest state in the world by both area and population. As governed by the Holy See, the Vatican City State is an ecclesiastical or sacerdotal-monarchical state (a type of theocracy) ruled by the pope who is the bishop of Rome and head of the Catholic Church. The highest state functionaries are all Catholic clergy of various national origins. After the Avignon Papacy (13091377) the popes have mainly resided at the Apostolic Palace within what is now Vatican City, although at times residing instead in the Quirinal Palace in Rome or elsewhere.

The Holy See dates back to Early Christianity and is the principal episcopal see of the Catholic Church, which has approximately 1.329 billion baptised Catholics in the world as of 2018 in the Latin Church and 23 Eastern Catholic Churches. The independent state of Vatican City, on the other hand, came into existence on 11 February 1929 by the Lateran Treaty between the Holy See and Italy, which spoke of it as a new creation, not as a vestige of the much larger Papal States (7561870), which had previously encompassed much of central Italy.

Vatican City contains religious and cultural sites such as St. Peter's Basilica, the Sistine Chapel, and the Vatican Museums. They feature some of the world's most famous paintings and sculptures. The unique economy of Vatican City is supported financially by donations from the faithful, by the sale of postage stamps and souvenirs, fees for admission to museums, and sales of publications. Vatican City has no taxes and items are duty-free.

Israel (; Hebrew: יִשְׂרָאֵל, romanized: Yīsrāʾēl; Arabic: إِسْرَائِيل, romanized: ʾIsrāʾīl), officially the State of Israel (מְדִינַת יִשְׂרָאֵל, Medīnat Yīsrāʾēl; دَوْلَة إِسْرَائِيل, Dawlat ʾIsrāʾīl), is a country in Western Asia. It is situated on the southeastern shore of the Mediterranean Sea and the northern shore of the Red Sea, and shares borders with Lebanon to the north, Syria to the northeast, Jordan to the east, and Egypt to the southwest; it is also bordered by the Palestinian territories of the West Bank and the Gaza Strip to the east and west, respectively. Tel Aviv is the economic and technological center of the country, while its seat of government is in its proclaimed capital of Jerusalem, although Israeli sovereignty over East Jerusalem is unrecognized internationally.Israel has evidence of the earliest hominid migrations out of Africa. Canaanite tribes are archaeologically attested in the region since the Middle Bronze Age, while the kingdoms of Israel and Judah emerged during the Iron Age. The northern Kingdom of Israel was destroyed by the Neo-Assyrian Empire around 720 BCE, and the Kingdom of Judah was incorporated into the Neo-Babylonian Empire in 586 BCE. Some of the Judean population was exiled to Babylon, only to return after Cyrus the Great conquered the region. The Maccabean Revolt against Seleucid rule led to an independent Hasmonean kingdom by 110 BCE. The kingdom became a client state of the Roman Republic in 63 BCE, following which the Herodian dynasty was installed by 37 BCE, and in 6 CE, the former kingdom was finally incorporated into the Roman Empire as the province of Judaea (Latin: Iudaea). A series of unsuccessful Jewish revolts against the Romans that broke out during the first and second centuries resulted in the destruction of Jerusalem, the expulsion of many Jews, and the renaming of Iudaea to Syria Palaestina. In the 7th century CE, the Byzantine-ruled Levant was taken by Arab forces and incorporated into the Rashidun Caliphate. It remained in Muslim hands until the First Crusade of 1096–1099 re-established a Christian sovereign presence; Crusader control was partly dismantled by the Ayyubids in 1187, but ultimately lasted until 1291. The Mamluk Sultanate of Egypt extended its control over the region by the end of the 13th century until its defeat in 1516 to the Ottoman Empire. During the 19th century, a national awakening among Jews led to the founding of Zionism, a movement that espouses the return of a Jewish homeland in Palestine, also known as the Land of Israel, which was followed by the immigration of diaspora Jews.

Following World War I, Britain controlled the entirety of the territory of what makes up Israel, the Palestinian territories, and Jordan as a League of Nations mandate. After World War II, the newly formed United Nations adopted the Partition Plan for Palestine in 1947, recommending the creation of independent Arab and Jewish states, and an internationalized Jerusalem. The plan was accepted by the Jewish Agency but rejected by Arab leaders. Following a civil war within Mandatory Palestine between Yishuv and Palestinian Arab forces, Israel declared independence at the termination of the British Mandate. The war internationalized into the 1948 Arab–Israeli War between Israel and several surrounding Arab states and concluded with the 1949 Armistice Agreements that saw Israel in control of most of the former mandate territory, while the West Bank and Gaza were held by Jordan and Egypt respectively. Israel has since fought several wars with Arab countries, and since the Six-Day War in June 1967 has occupied several territories, and continues to occupy the Golan Heights and the Palestinian territories of the West Bank, including East Jerusalem, and the Gaza Strip, though whether Gaza remains occupied following the Israeli disengagement is disputed. Israel has effectively annexed East Jerusalem and the Golan Heights, though these actions have been rejected as illegal by the international community, and established settlements within the occupied territories, which the international community also considers illegal under international law. Efforts to resolve the Israeli–Palestinian conflict have not resulted in a final peace agreement, while Israel has signed peace treaties with both Egypt and Jordan, and more recently has normalized relations with a number of other Arab countries.

In its Basic Laws, Israel defines itself as a Jewish and democratic state, and as the nation-state of the Jewish people. The country is a liberal democracy with a parliamentary system, proportional representation, and universal suffrage. The prime minister serves as head of government and the Knesset is the unicameral legislature. Israel is a developed country and an OECD member, and has a population of over 9 million people as of 2021. It has the world's 31st-largest economy by nominal GDP, and is the most developed country that is currently in conflict. The standard of living in Israel is the highest in the Middle East, and the country ranks high on the global HDI list. Israel also ranks among the world's top countries by percentage of citizens with military training, percentage of citizens holding a tertiary education degree, research and development spending by GDP percentage, women's safety, life expectancy, innovativeness, and happiness.