The reason for the change in status is flight safety problems and oversight issues that have not yet been solved

This from Category 1 to Category 2. A delegation of FAA had been in Israel for several days and came up with negative conclusions

In January 2005 import of goods (excluding diamonds) totaled $2.8 billion, export of goods (excluding diamonds) totaled $2.0 billion and the trade deficit (excluding diamonds) totaled $0.8 billion