The day after Israel declared its independence on May 14, 1948, the new nation was invaded from all sides by Arab armies. That failed. So the humiliated Arab governments turned on their own Jewish citizens to exact the revenge they had publicly promised: the confiscation of assets, denaturalisation and, finally, expulsion to the new state of Israel as a demographic time bomb. Iraq was the model. Here's how they did it.

On July 19, 1948, Iraq amended penal code Law 51 against anarchy, immorality, and Communism, adding the word "Zionism". Zionism itself now became a crime, punishable by up to seven years in prison. Every Jew was thought to be a Zionist, and so every Jew was effectively criminalised .

After the Third Reich fell, some 2,000 ex-Nazis escaped to Arab countries to continue the war against the Jews. Soon, the familiar sequence of Nazi-style pauperisation began in Baghdad.

Jewish businesses were boycotted; their owners were systematically arrested; funds dried up. Many purged Jewish government employees, highly skilled and formerly well paid, were now destitute and reduced to selling matches on the streets to avoid being arrested for vagrancy. Jewish home values dropped by 80 per cent.

The once genteel and gracious life of Jews in Iraq was about to be terminated. The Zionist underground stepped up activities. Bribery helped - $450,000 was given, mainly to the Iranian prime minister. Iran suddenly announced it would open its doors as a grand humanitarian gesture. Iraqi Jews in large numbers were now permitted to transit via Iran, eventually 1,000 per month.

With the escapees went their money and some possessions. In other words, it was a flight of capital as well as people. Quickly, the rapid subtraction of Jews from the financial, administrative, retail, and export sectors proved devastating to Iraq's economy. Over the centuries, Jews had become essential to the economy. An estimated 130,000 Jews lived in the Iraq of 1949, with about 90,000 residing in Baghdad. Jewish firms transacted 45 per cent of the exports and nearly 75 per cent of the imports.

On March 3, 1950, to halt the uncontrolled flight of assets and people, Iraqi Prime Minister Tawfig as-Suwaydi engineered the passage of an amendment to Law 1, the Denaturalisation Act. The amendment revoked the citizenship of any Jew who willingly left the country. Once Jews registered to emigrate, they were required to leave within 15 days. The window would not be wide. The amendment to Law 1 would expire in one year.

The doors swung open, albeit only briefly. Iraqi officials guesstimated that 7,000 to 10,000 of the most undesirable Jews, mainly those already pauperised, would be the only ones to leave. They were wrong.

Exit doors became floodgates. Thousands immediately registered to leave. Household by household, Jewish families finally - almost unanimously - realised that their precious 2,600-year existence in Iraq was over. Wave after wave, groups left the country via the existing overland routes. But land routes were not enough.

Israel knew an airlift was needed. The Mossad called in its most reliable partner for airlifting Jews: Alaska Airlines. El Al and Alaska formed a new airline, Near East Air Transport (NEAT).

Flights would operate through Nicosia, Cyprus, or possibly direct to Tel Aviv if the fact of Israel-bound flights could be kept secret. But NEAT needed an Iraqi partner to secure charter rights in Iraq.

The perfect partner was the well-established Iraq Tours, based in Baghdad. Who was the chairman of Iraq Tours? It was Iraq Prime Minister Tawfig as-Suwaydi, the man who had engineered Law 1, the Denaturalisation Act.

On May 19, 1950, the first 175 Jews were airlifted out of Iraq in two C-54 Skymasters. Israel at first called the rescue Operation Ali Baba, later code named Operation Ezra and Nehemiah, after the prophets who had led the Jews of Babylon out of exile back to Israel millennia before.

Israeli and Iraqi officials were stunned. Israel envisioned flying out about half the Iraqi Jewish population - 40,000 the first year, and more thereafter, to a total of 60,000. But within days of the airlift's inauguration, some 30,000 Jews had registered at their synagogues and were therefore required to leave within 15 days. Once at the airport, departing Jews were abused and humiliated. Rings were pulled from their hands and linings were torn from their hats as officials looked for valuables during a thorough search.

There were not enough hours in the day to transfer the thousands who were now stateless in their own country, penniless amid all the wealth they had left behind, and reviled in the nation they had loved for two millennia.

The Iraqi government made it clear: these Jews were now stateless refugees, devoid of legal rights in Iraq, and essentially all "Zionist criminals". Many were now homeless and sleeping on the streets.

Baghdad announced that if these Jews were not removed - and swiftly - the government was prepared to move them into concentration camps. The very phrase "concentration camp", coming on the heels of the Holocaust, was chilling.

More planes were needed. British airlines BOAC and BEA agreed to participate in the lucrative airlift. Iraqi Airways was given the ground maintenance contract, 30 dinars for every flight plus a 7.7 per cent fee to Iraqi Airways for each British plane used. Who was the director-general of Iraqi Airways? It was Sabah Said, the son of the re-ascended Iraqi Prime Minister, Nuri Said. The prime minister's son received an additional 5.5 per cent "special fee".

Tiny Israel did not know whether it had enough tents. The Jewish state tried to negotiate for fewer refugees per month.

Nuri Said now realized that his 120,000 captive Jews could be turned into a demographic weapon against Israel. In March 1951, he engineered yet another statute, this one, Law 5, permanently freezing all the assets of the Jews who were denaturalised by the previous law. Law 5 was concocted in secret. Leading government officials only learned about it just before the vote. As the measure was being ratified, Baghdad's telephones went dead so desperate Jews would not learn of the new law and use precious moments to transfer or save their property. To make sure Jews could not touch their funds, the government ordered all banks to close for three days.

Now, 120,000 Jews would arrive in Israel penniless with no hope of later calling on their former wealth. Concomitantly, Said demanded that Israel absorb 10,000 refugees per month, every month to intensify the strain on Israel's resources.

Exacerbating the crisis, Said ruled that as of May 31, 1951, no more exit visas would be issued. If Israel would not accept these stateless enemies now, the concentration camps would be readied. Iraq's parliament had already discussed such camps. Said clearly expected the Jewish state to crack beneath the weight of the humanitarian effort.

Estimates of the value of Iraqi Jewry's seized assets ranged from six million to 12 million dinars or, at its highest valuation, some $300 million at current values.

Israeli foreign minister Moshe Sharett declared: "The value of the Jewish property frozen in Iraq will be taken into account by us in calculating the sum of the compensation we have agreed to pay to Arabs who abandoned property in Israel."

Israel had no choice but to absorb all 120,000 Iraqi Jews. The daily spectacle in Baghdad of forlorn Jews being hustled into truck after truck, clutching nothing but a bag and their clothes, was a cause for great jubilation on the streets of Baghdad. The crowds gleefully stoned the trucks that delivered the refugees to the airport. Jews were mocked every step of the way.

Between January 1950 and December 1951, Israel airlifted, bussed, or otherwise smuggled out 119,788 Iraqi Jews - all but a few thousand.

Within those two years, Iraq - to its national detriment - had excised one of its most commercially, industrially, and intellectually viable groups, a group that for 2,600 years had loyally seen that country as their chosen place on earth. This dispossessed group, arrived in Israel with nothing but their memories, rose to become some of the Jewish state's most productive citizens.

Indeed, hundreds of thousands of Jews from across the Muslim world, were also expelled to Israel during those first years, some 850,000 in all. They transformed the Jewish state from a European haven into a true Middle Eastern country, not only populated with citizens of Arab countries - but citizens who were Jewish by religion.

Today these families shudder over the thought that a future generation may not remember this dark chapter.

Edwin Black is the author of 'IBM and the Holocaust', and 'The Farhud, Roots of the Arab-Nazi Alliance in the Holocaust'