It's pure satire, featuring references to current affairs of the past week through parodies of the people involved, as well as the thoughts of recurring characters. The program is one of the most watched and influential shows on Israeli television. It was first filmed in Tel Aviv in 2003, and in later seasons, was filmed in the neighboring Herzliya.
Last month CNN profiled the show. Here is their report, followed by a typical skit from the actual show. This one has an interview with Shimon Peres and George W. Bush, with a little help from Bush's translator, Dora the Explorer. Enjoy!