Many on the right feared that this was the first step towards handing back the West Bank to the Palestinians. Begin justified his approach by stating that he did not consider Sinai as part of the Land of Israel whereas the West Bank certainly was.
Despite this, many left the Likud to form a far-right breakaway party, Tehiya, a mixed grouping of West Bank secular and religious settlers. Other far-right parties such Tsomet and Moledet followed. Moledet appealed to the most impoverished in Israeli society and advocated the voluntary transfer of Palestinians from the West Bank.
The far-right grew dramatically, leading to Shamir including such parties in a Likud-led government in 1990. They were strongly supported by the right wing of the Likud, whose standard bearer at that time was Ariel Sharon.
Any concessions to the Palestinians, any cessation of settlement building on the West Bank was anathema to the far-right. They left Shamir's government in protest at Israel's attendance at the Madrid conference in 1991. The election of Labour's Yitzhak Rabin in 1992 and the signing of the Oslo Accords brought them on to the streets. "Israel is in danger" was the war cry and, in a volte-face, even diaspora Jews were now urged to protest against an Israeli government and its policies.
On 5 October 1995, Ariel Sharon participated in a far-right demonstration in which Rabin was depicted as an SS officer. Sharon introduced the term "collaborators" and compared Rabin and Peres to Marshal Petain who had sued for peace after France had been defeated by Nazi Germany in 1940.
Sharon ridiculed threats to assassinate Rabin as "deliberate provocations", similar, he said, to those that Stalin had fabricated in order to eliminate his enemies. As history records, the incitement against Rabin by the far-right preceded the shots fired into his back by Yigal Amir by just a few weeks.
The National Religious Party (NRP), the traditional home for religious Zionists, underwent a tremendous transformation after the Six-Day War in 1967. The NRP had formerly been close to the Labour party and saw its mission as protecting the rights of the observant in a secular society. The 1967 war awakened the sleeping messianism within religious Zionism.
The conquered territories offered the opportunity to expand the borders of the state of Israel to that of the biblical Land of Israel. Religious Zionism was morphing into Zionist religion.
Under the influence of Rabbi Zvi Yehuda Kook, young religious Jews began to establish settlements on the newly conquered West Bank in locations which resonated with biblical splendour. Retaining the territories became the status quo. Land became more important than peace. The NRP's old guard was eventually ousted and its successors felt far more comfortable in the company of the traditional Menachem Begin than consorting with the open-necked, freethinkers of secular Labour.
Yet, like the Likud, the NRP also began to experience fragmentation after Camp David. Its defectors joined far-right religious parties such as Tehiya or Morasha - and even the leader of the controversial Jewish Defence League, Rabbi Meir Kahane, a former FBI informer and notorious womaniser, was elected to the Knesset in 1984.
These trends signalled the demise of respect for the rule of law and democratic procedure - hallowed principles held by Menachem Begin.
The handshake between Yitzhak Rabin and Yasser Arafat on the White House lawn in 1993 forced a further split within the Likud. There were ideological purists who opposed any sort of compromise, while others entertained the hitherto heretical idea of negotiating with the PLO. The new leader of the Likud, Benjamin Netanyahu, took a middle path and argued that the Likud now had to adapt to the reality in the post-Oslo era.
Unlike Begin and Shamir, Netanyahu promised allegiance to retaining "the Land of Israel" but, crucially, not in its entirety. The guiding principle for Netanyahu was not totally a matter of ideology, but one of reciprocity. Israel would respond to a Palestinian negative action by a punitive action against Palestinian interests - more often than not, the announcement of an expansion of an existing settlement.
Other political groupings now moved to the right - often as a result of the rise of the Islamist suicide bomber and the increasing number and range of missiles fired into Israel's heartland. The politics of fear - the Iranian nuclear threat and the Islamist capture of the Arab Spring - provided many an ambitious right-wing politician with a drum to bang.
Many of the newly-arrived Jews from the former Soviet Union initially voted for Rabin in 1992. Labour had astutely ditched the Red Flag for fear of conjuring up memories of the old days. But such memories died hard and coupled with acts of terror by members of Hamas, many Russians voted for Natan Sharansky's right-leaning Yisrael B'Aliyah in 1996. This in turn was eclipsed by a hybrid party of Russians and the far-right - Yisrael Beiteinu - led by the Kishinev-born Avigdor Lieberman.
Even Shas, the party of the Sephardim moved to the right as the pronouncements of its spiritual mentor, Ovadia Yosef, became increasingly hawkish and acerbic.
During the past decade, a range of different far-right groupings have coalesced and fragmented but, overall, the far-right has been a permanent feature of government.
It has only been marginalised when a popular leader like Sharon has made a stand to break the mould and follow a different approach such as the withdrawal from Gaza in 2005. Netanyahu's Likud accounts for about 20 seats today - far short of a blocking majority of 61 in the Knesset. Many of his partners in government are therefore parties of the far-right.
His priority has been to prevent any coalition from falling apart. This has led to the politics of stagnation. A bold peace initiative is out of the question since it would lead to dissension and dissolution. And a rival pole of attraction has arrived in the form of the revamped NRP, now called HaBayit HaYehudi, led by Nafatli Bennett, who has attracted many younger, secular voters to this religious party. A 21st-century, self-made millionaire, Bennett has become the dominant voice on the far-right, eclipsing even Lieberman.
Even if the Zionist Camp of Herzog and Livni emerge as the largest group in the coming election, together the parties of Netanyahu and Bennett can muster a probable 30-40 seats. Although the right-wing camp has been fraying around the edges during the past week, the mathematics appear to be against the Israeli left, which seems unable to attract the far-right, the religious right, Russians or Sephardim.
And yet nothing is absolutely certain in this country of independent individuals.
The pieces on the chessboard are still in play - and the politics of Israel are characterised by ruthlessness, expediency and fickle practitioners. We will know soon.
