8 January - Yehoshua Ben-Zion convicted of embezzling £20 million from the Israeli-British Bank which collapsed in July 1974 owing British investors £46.6 million. He was sentenced to 12 years in prison. Later, Ben-Zion was pardoned by the Israeli president after intervention of Menachem Begin and was released after serving 3 years.
25 April – Leading Israeli pop star Mike Brant, who achieved world fame after moving to France, leaps to his death from a six store apartment in Paris.
6 March – Savoy Hotel Attack: eight Al-Fatah commandos seize the Savoy Hotel in Tel Aviv after they rowed ashore to Israel from the Mediterranean Sea. 13 civilians were taken hostage. The Israeli counter-terrorism unit Sayeret Matkal stormed the hotel later in the day, killing seven of the eight militants. Five of the hostages were freed while eight hostages and three of the Israeli soldiers died in the operation.
3 May – The Israeli capital of Jerusalem was struck by missiles for the first time, after two Czechoslovakian made Katyusha rockets, fired by Arab guerillas, struck 500 meters from the Knesset parliament building.
15 June – Kfar Yuval hostage crisis: a terror cell consisting of Palestinian Arab terrorists from the Arab Liberation Front cross the border from Lebanon and manage to infiltrate moshav Kfar Yuval in the night and enter one of the houses of the moshav. They kill one of the family members who tries to fight them and then hold the rest of the family members as hostages, demanding the release of Palestinian terrorists held in Israeli prisons. A raid by an IDF infantry unit kills all four terrorists. Two hostages and one soldier are also killed during the raid.