Objective: The Israeli National Health Insurance Law stipulates a National List of Health Services (NLHS) which all residents are entitled from their HMOs. This list has been updated annually for almost a decade using a structured review and decision-making process. Although the Israeli explicit priority-setting experience is unique and may be considered groundbreaking, its fairness and legitimacy have not been assessed. To assess the priority-setting process for compliance with the four conditions of accountability for reasonableness outlined by Daniels and Sabin (relevance, publicity, appeals, and enforcement), and with the four steps of the trans-disciplinary model for priority setting in health care (reasonableness, transparency, responsiveness, and accountability). Methods: We used such data as public documents, audit reports, literature review, the mass media, observations from the meetings of the Public Adivosry Committee responsible for recommending new technologies for th NLHS, and interviews with the committee members. Results: The Israeili process for updating the NLHS does not fulfill the appeals and enforcement conditions, and only partially follows the publicity and relevance conditions, outlinesd in the accountabilty for reasonableness and transparency framework. Only the reasonableness and transparency steps of the trans-disciplinary model are partially fulfilled, but the priority setting process lacks responsiveness and accountability. Conclusion: The fairness and legitimacy of the priority-setting mechanism have not been established. The main obstacles for achieving these goals may relate to the large number of technologies assessed each year within a short time frame (500 technologies assessed in 2007), the lack of personnel engaged in health technology assessment and the desire for early adoption of new technologies. Changes in the priority-setting process should be made in order to increase its acceptability among the different stakeholders.