In the wee small hours on Israeli television, they show reruns of what was once a staple form of mass entertainment: kibbutz choirs - the men in pressed work shirts, the women in peasant skirts - singing Hebrew folk melodies exalting the Land of Israel, while a smiling audience joins in. The pictures were black and white, the sets cardboard, and the programmes interminable - a socialist-realist tableau of a simple farming nation engaged in wholesome, patriotic amusement.

Visiting Israel last month, I sat transfixed when I stumbled across the public service channel that replays those old shows. Tonight the national celebrations will be more up to date, as Israel marks its 60th anniversary with street parties this evening and beach barbecues tomorrow. Yet if the world is watching, trying to understand the place Israel was and what it has become, it could do worse than start with those cheesy TV specials.

For one thing, too many critics like to depict the establishment of Israel in May 1948 as little more than an act of western imperialism, inserting an alien, European enclave into the mainly Arab and Muslim Middle East. In this view, the Jewish Israelis of today, with their swimming pools and waterside restaurants, are no different from their counterparts in other settler societies - the whites of Australia or, more painfully, South Africa. A look at the faces of Jewish Israel is one easy rebuttal: the new nation that has formed by mixing Moroccan and Russian, Ethiopian and Kurd, is one of the most ethnically diverse in the world. But there is a more substantial counter-argument, one that can be picked up even on those old TV singalongs.

A favourite in the patriotic repertoire is Ein Li Eretz Acheret (I Have No Other Land). In a way, no other sentence conveys the tragedy of Israel and Palestine more concisely - because of course, and with good reason, the Palestinians feel exactly the same way. They too have nowhere else. Yet this Zionist anthem articulates something very deep in Israelis' sense of themselves: they are a nation formed by those who had no other place to live. The Holocaust, inevitably, looms large in this: the establishment of a Jewish state just three years after the liberation of Auschwitz was no coincidence. After 2,000 years, the world was finally persuaded that the Jews deserved what every other people regarded as a basic right: a place of their own.

A poignant reminder that Jews really had no other place - because the rest of the world did not want them - came with the death last month of Yossi Harel, captain of the Exodus, the leaking, rusting ship that carried 4,500 Holocaust survivors from Europe to Palestine in 1947, only to be sent back - by the British - first to France and then, incredibly, to Germany.

This, surely, gives the Israeli experience a different texture to the founding of, say, New Zealand, Argentina or the US. Those enterprises were fuelled chiefly by ambition and appetite for material resources. Even if those who landed on Plymouth Rock were fleeing religious intolerance, the circumstances of America's pioneers were not those of the Jews in the 1940s. The moral difference between the Jews and the white settlers of America, Africa and Australasia is the difference between a homeless man who needs a roof over his head and the landowner who fancies a second home. Those who lazily brand Zionism as imperialism should be able to tell the difference - and to remember that those who boarded those battered ships felt less like imperialists than refugees desperate for shelter.

The old TV shows provide another, related corrective. They are a reminder that in some ways early Israel was less Rhodesia than it was East Germany, a small country with socialism as the state religion. Back in the 1970s, all Israeli floors looked the same: the tiles were mass produced and there was only one style. Every toilet seat was made by a single kibbutz. Foreign investors were told they were welcome - so long as they were happy to sell a 51% stake in their company to the Histadrut, Israel's TUC.

That collectivism is all but gone. Most of the kibbutzim have privatised: individual members now own their own houses and earn different wages from each other. The kibbutz was never Israel, but it stands as a metaphor for what is happening in the wider society.

Israel itself is privatising, as its people withdraw from the collective sphere and retreat into their own, individual lives. Many speak of the bu'ah they construct for themselves, the bubble in which they can hide away from the fears and angst of Israel's "situation". Polling reveals the dichotomy: while nearly 40% believe the country faces a "serious threat of destruction" from its neighbours, around 83% are "satisfied or very satisfied" with their own lives.

All of which has a bearing on the other meaning of tomorrow's anniversary. The US administration has set the date as a deadline for Israelis and Palestinians to show some progress in the talks launched at Annapolis last November, ahead of President Bush's visit to the region next week.

Israel insists that it is straining every sinew seeking peace, just as it has insisted throughout the past 60 years. I heard the Israeli foreign minister, Tzipi Livni, explain with pride in London last week that she has kept talking to her Palestinian counterpart, even "on days of terror". Some of Prime Minister Ehud Olmert's hawkish critics reckon the peace effort is, if anything, accelerating, in order to distract attention from the new, apparently serious, corruption inquiry just launched against him. And yet, there are few signs of a genuinely urgent Israeli desire for an accord with the Palestinians. The appearance of efforts for peace, in order to placate the legacy-hungry Bush, most certainly, but a fierce yearning for peace is harder to detect.

So when Jimmy Carter was in Jerusalem last month, carrying messages from Damascus and Hamas, no frontline Israeli minister would so much as meet him. Israel says it can't afford to legitimise Hamas, even indirectly, for fear of undermining the Palestinian president, Mahmoud Abbas. Fine. In which case, surely, Israel would be doing all it could to bolster Abbas's credibility - by, say, removing West Bank outposts deemed illegal under Israeli law, or offering compensation to those Jewish settlers ready to leave occupied territory voluntarily and return to Israel-proper. Yet Olmert has done no such thing.

In this, the PM is doing no more than follow the national mood. Israelis have grown cynical about peacemaking. "We pulled out of Lebanon in 2000 and Gaza in 2005, and what did we get for our trouble? Katyushas from Hizbullah and Qassams from Hamas. No thanks." Besides, and few Israelis like to say this out loud, they believe they can get by without peace. Thanks, they whisper, to the separation barrier or wall, terror attacks have dwindled: Palestinian violence is contained. As for the so-called demographic factor - the notion that soon Jews and Arabs in the entire land ruled by Israel will reach numeric parity - that feels abstract and far away.

Israelis will party tonight, celebrating an economy that enjoyed 5.1% growth last year and which provides for many a good life. Only a few insomniacs will watch the old shows and remember the long-ago melodies, including the one that sounds more passe now than ever. It's called Shir L'shalom - and it is the song for peace.