Can Israel’s Economy Absorb the Cost of War ?

The four-day truce agreed to by Hamas and Israel has come as a blessing for the residents of Gaza, beaten, shattered, killed, wounded and displaced by Israel and its incessant bombardment of residential areas, hospitals, schools, the innocent and non-combatants.

The most innocent victims of Israel’s bombardment had been children. Human Rights Watch has said that a total of 5500 children had been killed in the onslaught. The total death tally since October 7, 2023, was put at over 11,000 by the United Nations and the Red Crescent.

The crisis in Gaza had also reached the International Criminal Court with Prosecutor Karim Khan said a referral had come from South Africa, Bangladesh, Bolivia, Comoros and Djibouti. South Africa said the request was made "to ensure that the ICC pays urgent attention to the grave situation in Palestine."

Reports in the American media had documented the urgent diplomacy that had taken place involving Qatar, Egypt, the United Arab Emirates , the United States and others to persuade an obdurate Benjamin Netanyahu that a truce was essential to prevent the humanitarian crisis in Gaza becoming impossible to tackle.

Netanyahu had placed a condition that a truce would be agreed to if Hamas released its Israeli hostages. There had been a hiccup before the deal was agreed upon as Hamas wanted Israel to commit to letting aid trucks into northern Gaza.

Hamas had taken 240 Israeli hostages on October 7, while it was estimated that Israel was holding 8300 Palestinians in its jails. The two sides had agreed that during the truce Hamas would release 50 Israelis while Israel would free 150 Palestinians.

Three hostage exchanges following the start of the four-day truce had taken place. So far Hamas had released a total of 58 Israeli hostages including 10 Thai nationals and one Filipino. Israel had in turn freed 117 Palestinians.

There had reportedly been an offer by Israel to add one day to the cease-fire for every 10 hostages released. Hamas had said it too was interested in extending the agreement. The media quoted a Palestinian source that up to 100 hostages out of the total of 240 could ultimately go free.

There were many photographs with interviews in the international media from Gaza and Israel of families welcoming their family members following the hostage exchanges.

Even after finally accepting the four-day truce, Netanyahu had made it clear that the war would resume until the Israeli objective of the elimination of Hamas was achieved. While Hamas leader Ismail Haniyeh said he supported the truce, Hamas’s Izz el-Deen al-Qassam Brigades spokesperson, Abu Ubaida, had declared that the conflict against the occupation had to continue.

As fighting had not completely stopped, the Brigades said it had lost four of its military commanders in the Gaza Strip, including the commander of the North Gaza brigade Ahmad Al Ghandour.

Despite Iranian statements that it had no advance knowledge of the October 7 Hamas attack, Israel was convinced of Iran’s involvement through its ‘anti-Israel proxies’. These included Hamas, Lebanon’s Hezbollah and the Houthis in Yemen all of whom had received money, arms and training from Iran, quite ignoring the fact that Israel had been instrumental in the creation of Hamas as a counter to Yasser Arafat and his Palestine Liberation Organization.

With clashes taking place in the north between Hezbollah and Israel many Lebanese had also been displaced from their homes and villages along the border with Israel. Cross-border fire had killed an estimated 109 people in Lebanon, including 77 Hezbollah fighters and 14 civilians, three of them journalists.

There was said to be some dismay among Hamas that the Iran-backed, Lebanon-based Hezbollah leader Hassan Nasrallah had, in his public declarations, not made any declaration of war against Israel-taking its cue from Iran. Iran, while tacitly allowing its proxies to attack Israeli interests, had made it clear that it was very concerned about the war spreading.

Media reports appeared to suggest that most countries, led by the US, were now openly advocating a two-state solution with the Americans stating that any future and continuing occupation of Gaza by Israel would not be acceptable. Egypt had voiced the need for the disarmament of Gaza with an outside multilateral force to handle the area after the war ended.

Within Israel the opposition was stirring and there had been calls from opposition leader Yair Lapid who had said the country had lost confidence in Netanyahu and he should step aside. One person whose name figured in reports as a future Prime Minister of Israel was General Benny Gantz. He currently is a member of Netanyahu’s war cabinet but with an untarnished reputation, unlike Netanyahu who was still facing corruption charges.

The question of what would happen after this truce was also of concern as was the future of the area. On Thanksgiving US President Joe Biden welcomed the current truce. “The chances are real,” Biden said, adding that the pause could open the door to a longer cease-fire.

But Biden’s commitment to Israel had remained intact. Since the start of the conflict America had deployed its naval power in the region which included the Dwight D Eisenhower carrier strike group; its most advanced carrier the USS Gerald R Ford and its battle group; and an additional command ship, the USS Mount Whitney.

But there was growing opposition to the war and the American position. A recent poll by Quinnipiac and published in the ‘Times of Israel’ reportedly showed that only 32 percent of Americans believed their country “should support Israel” in its war on Gaza.

There was increasing concern about the growing Islamophobia with Palestinians and Muslims being targeted. The latest incident was in Vermont where three students of Palestinian descent had been shot in a suspected hate-crime.

Though President Biden had expressed concern about Islamophobia increasing in the US, the very nature of American policies in the Middle East contained the ingredients that would further fuel Islamophobia. Reports said that Palestinians and other Muslims in the US were living under greater tension and the possibility of violence against them especially if the Hamas -Israel conflict continued.

The outpouring of protests supporting the Palestinians was noteworthy as it spread across continents. The latest was in London on October 25 where, according to ‘Reuters’, tens of thousands joined a pro-Palestinian march in central London. Western media had been criticised by its own brethren for being biassed in favour of Israel.

The BBC journalists had accused the BBC of bias. In a letter the journalists said that the organisation was failing to provide audiences with important background information about Israel’s occupation and the history of Palestinian suffering.

Regarding the future Arab countries and Western allies had said a revitalised Palestinian Authority was a natural candidate to play a greater role in Gaza. But the authority currently led by 87-year-old President Mahmoud Abbas' Fatah party had lost credibility even among the Palestinians after it lost control over Gaza to Hamas in a 2007 conflict; its failure to halt the spread of Israeli settlements in the West Bank; and accusations of widespread corruption and incompetence.

According to media reports, a possible candidate to head a restructured Palestinian Authority could be Mohammed Dahlan. He was the PA's security chief for Gaza until it lost control of the strip to Hamas. He had clearly stated that Israel was mistaken if it believed that tightening its control of Gaza would end the conflict.

Most observers of the situation tend to believe that the conflict will continue; that it is likely that Netanyahu will not be able to stay on; and most importantly that the destruction of Hamas with its over 40,000 fighters will take months if not longer, if it happens at all.

Also with all the killing in Gaza , a new more radicalised and vengeful generation could emerge if Palestine does not get formal acknowledgement of its identity as a state. Would Israel’s economy be able to weather a prolonged conflict?

War is expensive even for large superpowers and ultimately affects a nation’s worth and well being. But for now Palestinian men, women and children will continue to pay the price just for being Palestinians.

Cover Photograph: A baby girl was rescued alive a month after her parents house was bombed in Gaza City.