28 April - For the first time, Israel intervened directly in the war between Syria and Lebanese Christians, as Israeli jets shot down two Syrian helicopters, killing four crewmen. Israeli warplanes also bombed Syrian positions on Mount Sannine. Israel claimed that it was taking action to "spread a protective umbrella" over the Lebanese Christian militias.
7 June – Operation Opera: Eight Israeli F-16s, escorted by F-15s, attack and severely damage Osirak, an Iraqi nuclear reactor under construction near Baghdad, which Israeli military intelligence maintain was built by the regime of Saddam Hussein for the purpose of plutonium production to further an Iraqi nuclear weapons program. Israeli intelligence also believed that the summer of 1981 would be the last chance to destroy the reactor before it would be loaded with nuclear fuel.
5 August – Menachem Begin presents his cabinet for a Knesset "Vote of Confidence". The 19th Government is approved that day and the members are sworn in.
14 December – The Knesset approves the "Golan Heights Law" which applies Israel's government and laws to the Golan Heights. The law was condemned internationally and declared null and void by United Nations Security Council Resolution 497.
18 December – Four days after Israel annexed the Golan Heights, the U.S. terminated its recently made Memorandum of Understanding with Israel. The MOU was not reinstated until 17 May 1983.
Israeli–Palestinian conflict
The most prominent events related to the Israeli–Palestinian conflict which occurred during 1981 include: Notable Palestinian militant operations against Israeli targets
The most prominent Palestinian Arab terror attacks committed against Israelis during 1981 include:
March - A terrorist infiltrating from Lebanon using a motorized hang glider manages to reach Haifa and drop some bombs over the city's bay, but is arrested after his glider's motor runs out of fuel and is forced to land.
10 August – Palestinian terrorists threw two bombs at an Israeli embassy in Vienna, wounding a 75-year-old woman.
29 August – 1981 Vienna synagogue attack: Palestinian terrorists killed two people and wounded 30 attending a Bar Mitzvah in Vienna.
10–24 July – The Israeli Defense Forces began a regular bombardment of Palestine Liberation Organization strongholds in Lebanon. The siege escalated after the Palestinian guerillas began shelling Israeli settlements. Until a 24 July ceasefire, 450 Palestinians and Lebanese, and 6 Israelis, died
* 17 July - Israeli bombing of Beirut: Aircraft from Israel bombed a residential area of West Beirut that housed PLO headquarters. Ten apartment buildings were destroyed, more than 300 people were killed and 800 or more injured. Most were civilians.
* 24 July - American mediator Philip Habib brokered a cease-fire between Israel and the PLO, temporarily halting the Lebanese Civil War.
