Peretz served as a munitions officer in the Paratroopers Brigade and was seriously wounded when his leg was run over in a motor accident in Sinai’s Mitla Pass in 1974. He was subsequently demobilized, and, after around two years of rehabilitation, Peretz moved to Moshav Nir Akiva in the North, where he became a farmer. During this period, he married his wife Ahlama, and the couple had four children.
Peretz began his political career in 1983, when he was elected head of the Sderot city council on behalf of the Labor party.
Upon concluding his first term of office, Peretz became involved in national politics. In 1988, he was elected to the 12th Knesset, where he served on several committees, including State Comptroller, Foreign Affairs and Defense, and Labor and Welfare. In the 13th Knesset, he became chairman of the Labor and Welfare Committee.
In 1994, Peretz established the so-called “New Life” and “Ram” factions in the Histadrut labor federation, together with Haim Ramon. During the 1994 Histadrut elections, Ramon became Histadrut chairman, and Peretz was appointed chairman of the trade union department.
In November 1995, Ramon rejoined the government, and Peretz replaced him as Histadrut chairman. During the 14th Knesset, Peretz served in the Constitution, Law and Justice Committee, while continuing to serve as Histadrut chairman.
In 1998, Peretz ran for Histadrut chairman on the “Am” list and received 77.7 percent of the votes.
Prior to elections for the 15th Knesset, Peretz established the Am Echad (One Nation) party, which garnered two seats in the elections. During the 15th Knesset, Peretz served on the Knesset and the Status of Women Committees. Also, he introduced legislation which would raise the minimum wage.
In 2002, Peretz was reelected Histadrut chairman, and in 2003, he led the Histadrut in a scathing attack on then-Finance Minister Binyamin Netanyahu’s economic reforms, which included privatization of services and public companies, such as the Ports Authority, as well as welfare cuts. Peretz initiated a wave of general strikes and long-term sanctions in the public sector. The clashes ended in compromise.
Am Echad garnered three mandates in the 16th Knesset, and in mid-2004, around a year after the elections, the party merged with Labor. On November 9, 2005, Peretz was elected Labor party chairman, defeating Binyamin Ben Eliezer and Shimon Peres.
In May 2006, following the elections for the 17th Knesset , the Labor party, under Peretz’s leadership, signed a coalition agreement with the Kadima party. Peretz was appointed defense minister in the new government headed by Kadima chairman Ehud Olmert .
His role as defense minister during the second Lebanon war came under severe criticism by the press, the public, and his party. In addition, Peretz’s Labor leadership will be challenged in the party’s upcoming elections in May, by former Prime Minister Ehud Barak, and MK Ami Ayalon.