I argue that before re-thinking Israeli subjectivity, its current status – centred on morality and power – should be presented. I will suggest that this prototypic identity evolved through a dialectic of denying diasporic traumatic victimhood and totally identifying with it, and that it still anchors Israeli society’s diverse segments. I will argue that an unconscious melancholy attachment to this identity must be mourned in order to counter its compulsive, repetitive manifestations. I will then suggest mourning as a process that may act as a transformative third in the Israeli psyche – both individual and social.