Tel Aviv: More than two years of sustained military campaigns across the region, including the ongoing assault on Gaza and escalating confrontation with Iran, have significantly reshaped Israel’s political climate, economic stability and social fabric, according to analysts. The conflict, increasingly framed domestically as a fight for survival, shows no clear endpoint, with observers suggesting that its eventual outcome may depend more on decisions in the United States than within Israel itself, a report by Al Jazeera suggested.
The cumulative cost of Israel’s wars since October 2023 has placed an immense burden on the economy. Data from the Bank of Israel indicates that military operations spanning Gaza, Lebanon, Yemen and Iran have already cost hundreds of billions of shekels, amounting to staggering daily expenditures. These costs come amid mounting international scrutiny, including proceedings at the International Court of Justice, where allegations of genocide have been deemed credible by jurists, and arrest warrants issued by the International Criminal Court against top Israeli leadership.
Despite weeks of sustained bombardment targeting Iran, Israel’s strategic objectives—weakening Tehran’s military capabilities and triggering internal dissent—appear distant. Intelligence assessments cited in reports suggest that a significant portion of Iran’s missile arsenal remains intact, undermining claims of decisive success. Meanwhile, Israeli civilians continue to face repeated air raid alerts, forcing frequent retreats to shelters and disrupting daily life.
Domestically, the strain is visible. Emergency measures, including school closures alongside continued work expectations, have intensified pressure on families. While public exhaustion is evident, surveys indicate that a substantial majority of Jewish Israelis still support the continuation of the war, even as many acknowledge that Iran’s capabilities may have been underestimated.
Politically, the country has shifted sharply toward hardline positions. Figures such as Itamar Ben-Gvir and Bezalel Smotrich now wield significant influence, reflecting a departure from earlier political eras shaped by agreements like the Oslo Accords. Recent legislative moves, including a death penalty law targeting Palestinians, have been celebrated by segments of the political establishment, further deepening international concern.
At the same time, the government has approved a record national budget, directing substantial funds toward ultra-Orthodox and settler groups. Critics argue this is aimed at consolidating political support amid ongoing war efforts, even as the broader population prepares to bear the long-term economic consequences.
Internationally, institutions such as the United Nations and European Union, along with several Western governments, have condemned recent policies, particularly those seen as discriminatory against Palestinians. Economists warn that rising defence spending, reduced productivity due to mass mobilisation, and declining consumer activity are already taking a toll.
Analysts caution that Israel’s economic trajectory increasingly resembles that of a state prioritising military expenditure without clear fiscal planning. With fuel dependencies and global supply disruptions adding further pressure, current relief measures are seen as temporary.
As the conflict drags on with no resolution in sight, uncertainty dominates both the battlefield and the home front. Even within leadership circles, there is little clarity on progress or end goals, reinforcing fears that Israel is entering a prolonged and deeply destabilising phase.