Israel is ranked among the "Tier 2" countries in the report, which includes countries that are making efforts to combat trafficking in persons. Tier 1 countries are those in which anti-trafficking standards are fully enforced, while the Tier 3 rank is assigned to countries that are not making significant efforts to combat trafficking within its borders.

In 2001, when the annual report was compiled for the first time, Israel received the lowest (Tier 3) ranking. After stepping up enforcement efforts last year, Israel was moved up to the Tier 2 group, the same ranking it received this year. During the first two years, Tier 3 countries were given the chance to improve their ranking, but will now be subject to economic sanctions by the United States.

"The government of Israel does not fully comply with the minimum standards for the elimination of trafficking. However, it is making significant efforts to do so," the report states. In previous years, the report highlighted the trafficking of women to Israel for prostitution. This year, it also notes the abuse of foreign workers.

"Although the government has pursued numerous cases of trafficking for the purpose of sexual exploitation, it must continue taking steps to combat trafficking for forced labor and sexual exploitation," the report declares. "Labor trafficking is a relatively new phenomenon in Israel," the report notes, urging Israel's government to "ensure that employers comply with labor regulations, protect the rights of migrant workers, and curb fraud associated with issuance of work permits."

The report continues: "Women from Moldova, Russia, Ukraine, and other countries in the former Soviet Union are trafficked to Israel for the purpose of commercial sexual exploitation. Persons in search of work are trafficked into situations of coerced labor, where they endure physical abuse or other extreme working conditions. Many low-skilled foreign workers in Israel have their passports withheld, their contracts altered, and suffer nonpayment of salaries of varying degree and duration.

Construction firms and other businesses have brought male laborers from China and Bulgaria into Israel to work under conditions equivalent to debt bondage or involuntary servitude."

The report notes that the government, together with NGOs, "has undertaken public awareness campaigns that include the development and distribution in Israel of flyers and other information in Russian on trafficking for commercial sexual exploitation."

The report states that "the maximum penalty for aggravated trafficking or trafficking of a minor is 20 years in prison" but notes that "the majority of cases are resolved through plea bargains that result, on average, in sentences of about two years."