It will be recalled that under the status quo arrangements in the Israel Ministry of Interior (for population registration purposes), all olim who underwent authorized conversions to Judaism (Orthodox, Conservative, Reform, etc.) in the Diaspora and immigrated as Jews under the Law of Return would be recognized and registered in Israel's Population Registry as Jewish. In the end, the Interior Ministry resolved the problem of dissonance between the civil and religious registration of new immigrants, simply by foregoing the registration of "community" on Israeli ID cards and providing a Hebrew date of birth only for those who were either Jewish by birth, or converted according to Halachah (religious Jewish law).

There was some speculation about whether and how this arrangement would be challenged, but as Aliyah from the USA has been largely religious and Jewish, it remained on the back-burner. If an oleh applies to get married (or divorced) in Israel, he or she does so through the local Rabbinate, under the provisions specified for Jewish weddings, so the process is merely deferred for those interested in a having a Jewish wedding. However, as only religious marriage is permitted in Israel, it remains a major issue. 

Shortly afterwards, in 2006, there was an additional crisis - articles appeared in the press to the effect that the mainstream of Jewish orthodoxy in the US protested the Israeli rabbinate's refusal to recognize orthodox conversions – which are important for religious, rather than civil purposes.
 
In early 2008, this crisis came to a head, as Israel's Sephardi Chief Rabbi Amar ruled against accepting orthodox giur from the USA, on principle. There was a furore and – to the best of our knowledge - rabbinical consultations were held at the highest level.
In Spring 2008, Rabbi Amar and the Rabbinical Council of America came to an agreement on recognized conversion authorities in the USA under their auspices, with a way to accredit orthodox conversions by other rabbis, who are not known personally or professionally to the Israel Chief Rabbinate.
 
Nonetheless, this solution was widely criticized as restrictive and divisive practice, because it does not grant all of modern orthodoxy's converts recognition in Israel, and because it is potentially retrospective. It is also linked to the major crisis about Conversion in Israel.