Originally Posted by http://www.globalsecurity.org/military/world/israel/merkava.htm

The State of Israel made the decision in August 1970 to develop and build a Main Battle Tank. Until that time, Israel could not equip its armored corps with new tanks due to the continuous refusal of all nations to sell modern tanks to Israel.

The layout of the Merkava (Chariot) is unconventional, with the turret and crew compartments to the rear of the vehicle and the engine up front. This was done to improve crew survival in the case of an armor-penetrating hit on front quarter. The vehicle has a hatch on the center deck forward of the turret for the driver, and hatches in the turret for the commander and loader. The gunner uses either one of these hatches. There is another clamshell hatch on the rear for crew escape or access under fire. The turret is of low cross section with a large basket at the rear for crew gear. The Merkava can carry 6 passengers, one for each 12 rounds of main gun ammunition removed. Normally, the passenger space is filled with main gun ammunition, of which the Merkava carries a large supply.

The need to introduce modern tanks to the Israeli Army became acute when Israel faced a tremendous build-up of hostile military formations beyond its borders, equipped with the best weapon systems of that era including modern tanks and anti - tank systems. The decision to develop the Israeli tank named MERKAVA (Chariot in the biblical language) became inevitable.

The Israeli development team led by General Israel Tal, integrated state-of-the-art technology with lessons of war in the concept and the design of the Merkava and all its future generations:

* The first Merkava tanks, Merkava Mk.1, were fielded in April 1979. Those tanks took part in actual operations during the Peace for Galilee War and proved themselves to be more effective than all other tanks in the theatre.
* The second generation, Merkava Mk. 2, was first delivered in 1984. Production of this version began shortly after the adoption of the Merkava in 1983, and continued until 1989. It is basically the Merkava Mk 1 with extra armor and an improved fire control system. In addition, the transmission has been improved leading to an increase in range. The 60mm mortar can be loaded and fired from within the turret without exposing the crew to enemy fire.
* The Third generation, Merkava Mk.3, was introduced in 1990 and became the backbone of the Israeli Armor Corp. It features a larger gun, a threat warning system, and more advanced modular armor that can be changed in the field. A more powerful engine has been put in the Merkava Mk 3, and air conditioning has been added. Up to 6 passengers may be carried by removing 9 main gun rounds per passenger. An advanced version of Merkava Mk. 3, with an improved Fire-Control System was fielded in 1995.
* As of 2002, the next generation, Merkava Mk. 4, is on the way and was undergoing field tests.

During the 1973 Yom Kippur War, Israeli armor suffered heavy losses from Egyptian and Syrian wire-guided anti-tank missiles. The high casualty rate spurred the IDF, which had previously depended on US-made Patton and Sherman tanks and British Centurion tanks, to develop the Merkava (Heb., chariot), considered one of the world's most effective and safest battle tanks.

Development of the Merkava was headed by Gen. Israel Tal, a former Armored Corps commander. Tal's team sought to design a tank that provided maximum protection to the tanks crew. One element of that defense is the placement of the tank's engine at the front of the vehicle, where it serves as a shield for the personnel compartment. This in turn provided more space in the vehicle's rear, which can be used to carry up to six extra soldiers. In addition, a special "canopy" protects the commander from indirect fire; the turret and the hull are fitted with a modular armor system that can be changed in the field; and the forward section of the turret is fitted with additional blocks of armor that provide extra protection against the latest generation of anti-tank missiles. A "skirt" of chains with ball weights is attached to the lower half of the turret, causing incoming projectiles to detonate on impact with the chains instead of penetrating the turret ring.

The tank became operative in 1979, and was first employed in the 1982 Operation "Peace for Galilee". The Mark I model was succeeded by the Mark II in 1983, which was replaced by the Mark III in 1990. Among the features of the Mark III are a new suspension system, a 1200-horsepower engine and new transmission, a more powerful main gun, and ballistic protection provided by special armor modules. The main 120-mm gun, developed by Israel Military Industries, is enclosed in a thermal sleeve that increases accuracy by preventing heat distortion.

Mark II and Mark III tanks are currently in service in the IDF; a Mark IV model, with additional safety and fire-control features, is currently being developed. It will include a new compressed-gas recoil system and thermal sleeve for the 120-mm gun, to enable the firing of enhanced kinetic energy ammunition. With the exception of the engine, all systems and assemblies of the Merkava tanks are of Israeli design and manufacture.

The Merkava is the innovative Israeli design of Major General Israel Tal. The primary design criteria was crew survivability. Every part of the overall design is expected to contribute to helping the crew survive. The engine is in the front to provide protection to the crew. There is a special protective umbrella for the tank commander to enable protection from indirect fire with the hatches open. Special "spaced armor" is in use along with protected fuel and ammo compartments. Rear ammunition stowage is combined with a rear entrance and exit. Since the rounds are stowed in containers that can be removed from the vehicle whenever necessary, this space can accommodate tank crewmen who have been forced to abandon their vehicles, or, if thought to be appropriate, even infantrymen. Rear ammunition stowage allows replenishment much more easily than if rounds have to be replaced in a carousel in the hull center, as in typical Russian vehicles.

Tank soldiers have long admired Merkava's rear entrance and exit, recognizing that it would allow them to mount and dismount unobserved by the enemy and would provide an excellent alternative escape route.

The Merkava can also carry a small Infantry squad internally under complete armored protection.