14 February – The Israeli government decides to transfer Ariel Sharon from his post as Defense Minister, in light of the recommendations of the Kahan Commission report published on 7 February and appoints Moshe Arens as the new Defense Minister.
1 May – 1983 Negev mid-air collision: During air-to-air combat training over the Negev Desert, an Israeli Air ForceF-15D Baz collides with an A-4 Ayit at between 13 and 14 thousand feet altitude, causing the attack jet to explode (the pilot reportedly successfully ejected), and tearing off the starboard wing of the fighter ~2 feet outboard of the engine nacelle. Pilot Zivi Nedivi goes to afterburner to try to stop spinning aircraft, and unaware of the condition of the jet due to fuel leaks obscuring the extent of the damage, makes a blistering 250-260 knot landing at nearest air base, tearing off the arrestor hook and coming to a stop just six feet from the runway threshold.
17 May – Lebanon, Israel, and the United States sign an agreement on Israeli withdrawal from Lebanon.
4 June – Population Census: 4,037,620 inhabitants in Israel.
20 July – The Israeli cabinet votes to withdraw troops from Beirut but to remain in southern Lebanon.
28 August – Menachem Begin announces his retirement from politics.
2 October – The 1983 Israel bank stock crisis erupts fully. The crisis results in the collapse of the stocks of the four largest banks in Israel, and the government's nationalization of those banks.
10 October – Yitzhak Shamir presents his cabinet for a Knesset "Vote of Confidence". The 20th Government is approved that day and the members are sworn in.
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