President Moshe Katsav rebuked a soldier at Beit Hanassi on Wednesday during a reception for outstanding soldiers and rescued what was becoming an awkward incident. The soldier, Cpl. Hananel Megged, who until a few months ago lived with his family in Gush Katif, refused to shake Chief of General Staff Lt.-Gen. Dan Halutz's hand. Megged said he would not shake the hand of someone responsible for the eviction of Jews. "I saw the bulldozers and my grandfather's [Gaza] house before me," said Megged, who now lives in Psagot. His grandfather died shortly after the pullout. Following the incident, an IDF spokesman said Megged's certificate of excellence might be revoked. With the incident settled, the spirit of the ceremony prevailed. Excellence, said Halutz, is not something to be taken for granted. It is based on education and values. The 120 outstanding soldiers, who each received a scholarship worth $1,000 from the Soldiers Welfare Association, did more than what was expected of them, said Halutz, "because they believe in giving of their utmost." Some of the honorees came from long established Israeli families. Others were more recent arrivals with Russian, South American and Ethiopian names. There were also representatives of the Beduin and Druse communities and a good mix of Ashkenazi and Sephardi backgrounds, indicating that the Israeli melting pot is still gathering in Jews from around the world. Katsav momentarily stopped the ceremony when Cpl. Reut Elharar was called up. Elharar is the youngest in a family of 18 children, and Katsav insisted on meeting her parents before allowing the ceremony to proceed. First Sgt. Avital Naor, a paratroop instructor with 132 jumps to her credit, spoke on behalf of the honorees, noting that there were people who thought that Zionism was pass and had faded into the dust of history. "It is alive and well among all of us 58 years after the establishment of the state," she said. Naor also noted the conflicts that had all but ruptured Israeli society in the past year, and asserted that such differences must not be allowed to affect the attitude and operations of the IDF. Katsav, who was presiding over such a ceremony for the sixth consecutive year, said that it was one of the most moving events that takes place annually at Beit Hanassi. The IDF, he said, was not just a security force and a paradigm of modern technology, but it represented the stability of the nation. "It is the framework that gives the young generation its values," he said. "The IDF is the best school for good citizenship. "I am sure that the traits for which you were singled out will accompany you in civilian life and that you will be future leaders." Katsav thanked Defense Minister Shaul Mofaz for his leadership and his contribution to Israel's security. Noting that former prime minister Ariel Sharon had made it a point to attend the ceremony each year, and that he had commanded a paratroop unit during the Sinai Campaign, Katsav said that his presence was sorely missed. He expressed his wish that Sharon would recover from his illness. The ceremony for the 120 outstanding soldiers was followed by a tribute to veteran soldiers. Notwithstanding the fact that the number of 1948 fighters still alive is decreasing, a larger-than-usual crowd of former IDF commanders and officers from 1948 onward attended. The reason was that this year marks the 50th anniversary of the Suez Campaign, and Independence Day festivities focused on the anniversary and on the heroes of that war, some of whom had not been invited to receptions in previous years. Several of those heroes also fought in 1948, and again in the wars of 1967 and 1973. Specifically addressing the veterans of the War of Liberation, among them Mahalniks - volunteers from abroad who came to help the fledgling state and stayed - Katsav said, "You revolutionized Jewish history in the most dramatic way. You had not only the capacity, but the vision, faith and commitment to bring about this amazing change after 2000 years of exile." If the Jewish people had been able to conjure up the heroes who could so dramatically alter Jewish destiny, he said, "they would have imagined you." Katsav noted that once these warriors of the War of Independence shed their uniforms, they took up important leadership roles in all fields of civilian life and were instrumental in forging the character of the nation and shaping its values. Interim Prime Minister Ehud Olmert, before commencing his address, called acting Knesset Speaker Shimon Peres to join him among the leaders in attendance, not only because he is a former prime minister, former defense minister and current vice premier, but also because he was director-general of the Defense Ministry during the Sinai Campaign. Olmert paid tribute to the founding fathers of all the branches of the armed forces and noted that on Thursday he would present the new government to the Knesset for approval. "The challenges that lie ahead for Israel are not easy," he said, adding that this government stood at a point in time between those who fought for the state's establishment and fashioned its image and those who would shoulder the mission of continuing the task. AP contributed to this report.