He served as president of the Hebrew University of Jerusalem and was the chairman of the Planning and Budgeting Committee of the Council for Higher Education in Israel.

Pazy returned to Israel in 1961 and lived in Beer Sheva with his wife, while working at the Nuclear Research Center in Dimona.

Upon the first time the Dimona reactor reached criticality in 1963, making it operational, Pazy left his work at the Nuclear Center and continued his studies at the Hebrew University of Jerusalem.

[5] As Rector he implemented his new policy of academic appointments, as well as promoting the opening of the Jerusalem Botanical Garden at Givat Ram and the Koret School of Veterinary Medicine.

[7] Based on his academic appointments' plan, Pazy immediately initiated recovery steps which helped the university to recover from the crisis.

In order to meet the expected demand, it was decided to widen the scope of the higher education system by establishing new research institutions and teaching colleges.

Pazy also served on the board of directors of CHE (Center for the Development of Higher Education in Germany), which he co-founded (1994–2004)[13] In 1985–2005, he was the Israeli delegate to PUGWASH, an international organization working to block the proliferation of non-conventional weapons.