The Israeli education system, from its inception at the beginning of the century, strove to consolidate and disseminate a new national identity. These efforts met with considerable success, although patterns of cultural and social differentiation were concurrently formed in the schools between youths from European backgrounds and those of Middle Eastern origin. The reform of secondary education in the direction of comprehensive schools in the 1960s and 1970s was expected to eliminate cultural 'gaps' and equalize educational opportunities for all. These goals were achieved only in part because of the operation of new selection mechanisms inside secondary education, which became universal following the reform. The 'autonomization' of schools as not-for-profit organizations and their opening to parental choice have in the past few years been presented as freeing Israeli education from its centralistic - bureaucratic bonds. Analysis of the politico-cultural and socio-economic changes over the last two decades in Israel indicates that these steps are in line with the traditional structural differentiation in education on the basis of class and cultural background. The new arrangements - like the old ones - strive to secure secondary-school tracks leading to university education in order to preserve the status of youth from the well-established middle classes.