The strike took hold following the failure of last-minute overnight talks between the unions and government aimed at averting the industrial action.
Histadrut chairman Ofer Eini stormed out of the overnight talks, saying the government had failed to guarantee salary payments for the 3,700 local authority employees whose wages have been withheld.
The strike has caused the closure of all local authorities, except for departments dealing with special education. In addition, all government ministries, with the exception of the Defense Ministry, are closed to the public. The National Insurance Institute, the Employment Service, the Israel Land Administration, the vehicle licensing office, and the land registration office are also shut.
There is no train service, nor are planes being allowed land or take off at Ben-Gurion International Airport. Sea ports are also shut down.
Bank of Israel employees are imposing sanctions, although ATMs will be restocked with cash. Health services and the security services, banks and the stock exchange are operating as usual.
The National Labor Court has yet to rule on the state's petition for an injunction against the strike. Israel Radio said that the court is expected to rule on the matter within a short time.
The state is arguing that the strike is unjustified given the progress that has been made in negotiations on the issue.
The state informed the court Wednesday morning that only 10 local authorities and three religious councils have yet to receive state funds in order to pay their employees, promising that those bodies would receive the funds by Thursday.
In addition, the state said the government would discuss sanctions against local authorities that fail to pay their employees' wages, a key Histadrut demand, during the next cabinet meeting.
Eini and the director-general of the Prime Minister's Office, Ra'anan Dinur, conducted intensive negotiations throughout the night Tuesday, during which the Histadrut agreed to take responsibility for part of the solution to the crisis and grant loans to local authorities that the government is unable to pay.
According to the proposal, the Histadrut would grant loans totaling millions of shekels to 625 employees in 10 local authorities which are worst-hit by financial difficulties.
But Eini said Wednesday morning that the government "was not willing to say unequivocally that every worker would be paid today. We will not agree to lees than this. We must put an end to this issue once and for all."
"It is unacceptable that in a properly functioning country employees go to work and don't get paid," said Eini. "The prime minister promised a complete solution and when I say a complete solution, that means until the last employee [is paid]."
Dinur also gave the Histadrut documents showing the government had transferred funds to 20 local authorities for the purpose of paying employees.
The government has transferred NIS 175 million to local authorities in the past two months, including NIS 85 million during the past two weeks, although not all of the funds were used to pay employees - in part because some of the money was used to pay off authorities' debts.
The government agreed to amend the Municipalities Law such that an emergency committee would be formed to take over control of any local authority that fails to pay a quarter of its employees for two months.
Eini asked for the public's forgiveness Wednesday morning, but said that the issue of employees' wages is a matter of principle and called on Israel's citizens to "show restraint and patience."
England fans can land
All flights from England will be allowed to land in Ben-Gurion Airport, general strike notwithstanding, a senior Histadrut official told Haaretz last night after attending a meeting between Eini and the heads of large unions.
The chairman of the Israel Football Association, Avi Luzon, succeeded on Tuesday in persuading Eini to permit the English fans to land in Israel despite the strike, contrary to the labor federation chief's earlier decision to allow only the English team to land.
On Tuesday, Eini met Airport Authority Chairman Pinhas Idan, and the two decided not to deny thousands of England fans to attend the game in Ramat Gan.
"We're expecting from 5,000 to 7,000 English fans to arrive in an airlift from England," a senior Histadrut official said. "We will prepare accordingly. They will all be well treated in spite of the strike. We won't tarnish Israel's image in Europe and won't hinder the huge celebration planned here," he said.