The Israeli film that I would have chosen for an Academy Award nomination in this, the 60th year of the sovereign Jewish state, is Noodle. Unlike Beaufort, Joseph Cedar’s film about Israeli soldiers in South Lebanon that was nom­inated for best foreign film, Noodle, directed by Ayelet Menahemi, makes only a fleeting allusion to Israel’s military conflicts.

Instead, it’s an emotionally taut story about an Israeli woman who finds herself responsible for a 6-year-old Chinese boy whose mother—an undocumented foreign worker—is picked up by immigration police in Tel Aviv and shipped home. Caring for the child breaks the barriers she’s built against love and puts her on an El Al nonstop flight to Beijing in an attempt to reunite the family. Were it not for the Hebrew dialogue, the story could be placed in any well-off Western country confronted with the dilemmas of illegal immigration.

To Israel’s founders on May 14, 1948, these concepts would have seemed unimaginable, at least in connection to their newborn state: Immigration police in Tel Aviv? El Al nonstop to Beijing? Well-off Western country? They had to contend with entirely different problems—like a looming invasion and internment camps in Cyprus full of Jews waiting for refuge.

But as Bible scholar Uriel Simon of Bar-Ilan University once said: One generation’s solutions are the next generation’s problems. That’s a perfect description of Israel’s progress.

True, the difficulties that Israel faces today stem partly from problems left unsolved in the past. But even more, they are the product of successes. It’s easy to be nostalgic about some of the old challenges—resettling Jewish refu­gees, building a strong military—that fit easily into legend. In contrast, many of Israel’s current issues involve uncomfortable internal disputes. But they are also markers of how far we have come.

Defense and borders: Israel’s Declaration of Independence was issued after the Arabs had rejected the United Nations partition plan for Palestine and included no mention of the new country’s borders. Boundaries would be set in battle. At the moment the state was born, though, the odds of victory against the invading Arab armies looked poor. Yet by the time armistice agreements were signed in 1949, Israel held much more land than the partition plan assigned it. The few, it seemed, had defeated the many.

In recent years, Israeli historians have argued about how accurate that picture was. Israeli New Historian Benny Morris, who has chronicled the battles of 1948, concludes that the real balance of forces was “murky.” By the war’s end, Israel had more soldiers in the field, but the Arabs had more heavy weaponry.

If the balance of power was uncertain in 1948, it became starkly clear after Israel’s triumph in June 1967 and subsequent victory in the face of the 1973 Egyptian-Syrian surprise attack. Israel had become the region’s strongest military power. Yet victory bequeathed two problems that remain the country’s most significant challenges.

Like other military powers, Israel has discovered that contending with insurgents can be harder than defeating a regular army.

“They didn’t think about the possibility that they’d conquer [the area], and then terror would begin as resistance to their army,” an Israeli colonel said to me in March 2003, commenting on the United States invasion of Iraq—but really speaking of Israel’s own experience.

Politically, the 1967 victory left Israel with the dilemma of borders: Should it hold the land it conquered, with its Palestinian population, or seek a peace based on a new partition? Are the armistice boundaries of 1949 an artifact of history or a rough outline of a future border? Divisive as these questions are, they are the product of the founding generation’s ability to build Israel’s strength.

The worries of wealth: Just after Israel became independent, a kibbutznik cousin of mine gave birth in Haifa. The baby was two months premature, and the hospital had no incubators. Resourceful nurses kept the infant alive between two hot-water bottles.

As that incident indicates, Israel in 1948 was poor and underdeveloped. It became even poorer as Jewish refugees poured in. Food was rationed. Exports meant oranges and little else. It was also an intensely egalitarian country ruled by a socialist party. For Jews abroad, the idealized Israeli was a kibbutz farmer and the country was a place that needed donations.

Today, the Israeli economy is powered by high-tech exports and the financial sector. Measured by per capita gross domestic product, Israel is close to Italy. Measured by life expectancy, Israel is more advanced than the United States. But the egalitarian ideal has become a memory. My cousin’s kibbutz, like most others, has privatized.

A recent report on social policy by the Adva Center in Tel Aviv shows that the income of the top 10 percent of Israeli households has risen significantly since 1990 while the income of the lower 60 percent has hardly changed. Shlomo Swirski, Adva’s academic director, points out that the inequality is also geographic, because the high-tech and financial sectors are concentrated in central Israel. Economically, Israel is two countries, one flourishing and the other stagnating—and still depending on philanthropic help. The challenge now is how to bridge that gap.

Look who’s coming: The first promise of the Declaration of Independence was that the new state would “be open for Jewish immigration.” By 1960, nearly a million Jewish immigrants had arrived, more than doubling the country’s population.

The next wave of aliya of that magnitude followed the collapse of the Soviet Union in 1991. But of that round, approximately 30 percent of the immigrants are officially non-Jews. They were able to come because the Law of Return grants the right of entry to the non-Jewish children and grandchildren of Jews. Many undoubtedly regarded themselves as Jews in the Soviet Union.

Besides the legal immigrants, Israel has also become a magnet for “foreign workers” from Asia, Africa and East­ern Europe—some with visas, some here illegally. The term “workers” is a euphemism suggesting they have come temporarily; many are really economic immigrants. Some have Hebrew-speaking children who know no home but Israel. Like the Chinese mother in Noodle, they do menial labor and dodge the police.

So immigration, once simply a value, is now a source of controversy. Who really is Jewish, and who deserves entry on that basis? Does Israel now need a new immigration policy that also allows economic immigrants to be­come naturalized citizens, integrated into a Hebrew-speaking society, spending Rosh Hashana on the beach like other secular Israelis?

State, synagogue and secularism: That last question implies another one, on which Israel’s founders deeply disagreed. Is Zionism a replacement for religion or the fulfillment of it? The successes of both the secular and religious camps in the last 60 years have kept the argument burning.

For many of the secular founders, the New Jew was a secular Hebrew speaker, the Bible was his national epic and labor was his sacrament. Political compromises had to be made with the Orthodox minority—for instance, leaving religious authorities in charge of marriage. But eventually, religion would fade away. For religious Zionists, on the other hand, institutions such as the state rabbinate legitimized the state as Jewish. Some believed that secular pioneers were really doing God’s will and would eventually return to the faith.

Sixty years later, each camp has defied the other’s expectations by thriving. Secular Hebrew culture is alive and well. Meanwhile, Orthodox Jews play a prominent part in public life and religious schoolchildren learn more Torah than their parents did. The ultra-Orthodox, once disdainful of the state, make and break coalitions and depend on government budgets. Israel enters its second 60 years with the role of Judaism in a democratic Jewish state utterly unresolved.

The other Israelis: At the end of 1948, about 17 percent of the population of the new Jewish state was Arab. The proportion hasn’t changed much: Today, official statistics show that about 20 percent of all Israelis are Arab.

But the debate has only intensified over what it means for Israel to be a Jewish state while fulfilling the Declaration of Independence’s promise to ensure “complete equality of social and political rights to all its inhabitants irrespective of religion, race or sex.” The promise remains to be met—as we are often reminded by the elected representatives of the Israeli Arab community in the Knesset. Then again, their presence at the speaker’s rostrum also represents one of the country’s accomplishments.

This is one more reminder: The messy, complex reality of Israel today is a product of the founders’ accomplishments. Their achievements created problems we need to solve—and our solutions will be the problems that our grandchildren confront 60 more years from now.