Israel has enjoyed three critical advantages in its 60-year confrontation with its Arab neighbors. First, it has enjoyed unity of command, while the Arabs were so often divided. Second, it has chosen its allies and arms suppliers well, from France in the 1950s and 1960s to the United States for the past 40 years. And most important of all, Israel has always enjoyed the technological edge that came from a modernized economy and world-class research and university base.

Israelis are getting worried about all three. The country's political divisions are widening, driven by tensions between various ethnic and religious groups. The American alliance, always a little shaky when the Arabs use their oil weapon with cunning, is now also under pressure from critiques of the role and influence of the pro-Israel lobby.

But above all, Israelis are worried about their research base. A new report from Tel Aviv University's Center for Economic Policy Research, with the title, "Brain-Drained," found that a quarter of all Israeli academics (24.9 percent) are now working in the United States.

"The deeper I dug, the clearer it became to me that we have developed a problem that is at a magnitude beyond anything that exists anywhere else in the developed world," said Prof. Dan Ben-David, the report's author. He added that Israel's higher education was being "systematically destroyed. It'll take us a generation or more to repair the damage. In this neighborhood you only get one chance."

"This is a country where we depend on hi-tech which doesn't just come from private investment, but from basic research at universities. We need hi-tech to defend Sderot, to build an air force," he added.

One in three (34 percent) of the Israeli graduates in the U.S. is a computer scientist. Another 29 percent are economists. Another 13 percent are chemists, and just 40 U.S. universities are now hosting 10 percent of Israel's physics graduates.

The report blames a number of factors, including higher U.S. salaries and better research facilities, but stresses that government cuts in university and research budgets have been a central problem. The teaching faculty in some departments of Israel's seven universities had been cut by a third, while the number of students admitted had increased four-fold.

"We have lost an entire generation who finished their PhDs and couldn't find a position. The U.S. and Britain and other countries have doubled research funds over the past decade and we've reduced them," Ben-David noted. He added: "All we have around us are enemies, basically. We have no natural resources; we can compete with our neighbors and the world only though the quality of our manpower."

Ben-David's report is not alone in sounding the alarm. Shraga Brosh, president of Israel's Manufacturers Association, has also condemned the cuts in research and university budgets.

"Our ability to face the future is based on personnel," he warned this week. "The government reduced its research budget over the past five years, knocking 5 billion shekels [$1.2 billion] off research and development at a time when other countries are increasing their budgets. We feel that our best are leaving."

The problems of the Middle East have long proved resistant to change. But few developments could change the situation quite as fast as a sharp decline in Israel's research and technological edge.