Israel’s war footing is reshaping the country, and the bill is growing by the day

A country on permanent alert

Two and a half years of sustained assaults on neighboring territories and on the besieged Gaza enclave have remade Israel’s politics, economy and public life, according to analysts. That transformation is now colliding with a new phase of confrontation, as Israel says it is locked in an “existential battle” with its long-time regional rival Iran.

The trouble, as ever, is that the ending does not seem to belong to Israel alone. What happens next will likely be shaped less by military planners in Jerusalem than by lawmakers in Washington, who still seem to enjoy the final word in these arrangements.

Even before the war on Iran, Israel’s assault on Gaza had already strained the country’s finances and international standing. Bank of Israel figures show that the wars in Gaza, against the Houthis, in Lebanon and now with Iran since October 2023 have cost 352 billion shekels, or about $112bn. That works out to roughly 300 million shekels, about $96m, every day. A tidy little reminder that war is expensive, especially when it never seems to stop.

At the same time, Israel faces mounting legal and diplomatic pressure. The International Court of Justice has already found that genocide allegations against Israel are credible, while the International Criminal Court issued arrest warrants in November 2024 for both Prime Minister Benjamin Netanyahu and his former defence minister on war crimes charges.

Now the country is bracing for what could be the financial shock of its war on Iran, with no clear exit in sight.

Long road ahead

Israel says its goals are to weaken Iran’s military capabilities and create conditions that might eventually push the Iranian public to turn against its government. At the moment, that looks optimistic in the way only war aims can.

After four weeks of nonstop bombardment, there are no obvious signs of public unrest in Iran or any serious challenge to the government there. And despite US officials publicly claiming that Iran’s military capacity has basically been neutralized, Reuters reported on March 27 that only one-third of Tehran’s missile stock had been destroyed, citing five sources within US intelligence.

Meanwhile, Israelis are living through regular but unpredictable air raid warnings, which means yet another trip to shelters and another reminder that “normal” has become a very flexible concept.

The strain is not limited to the battlefield. Emergency measures have closed many schools while parents are still expected to keep working, adding pressure to families already stretched thin. Even so, analysts in Israel say many families continue to see the war as something they expected all along.

“There’s a graveness that’s fallen over people, a sort of a pall,” political consultant and pollster Dahlia Scheindlin told Al Jazeera from a location near Tel Aviv. She said Jewish Israelis appear determined, for now, to keep backing the war despite the fatigue.

That exhaustion is real, but so is the support. In late March, 78 percent of Jewish Israelis told the Israel Democracy Institute that they supported continuing the war.

There is, however, a catch. A majority also believed that both US and Israeli planners had underestimated Tehran’s capabilities.

How long that support will last is anyone’s guess, Scheindlin said.

“It’s not like the 12-day war [between Israel and Iran in June 2025] because this has gone on for so much longer. And it’s not like rocket fire from Hamas in the past,” she said.

“Iran fires ballistic missiles, meaning that everyone needs to shelter each time. It’s also gone on for much longer, and how long it will continue, we don’t know.”

She added: “To be honest, I don’t know how we’ll emerge from this. No one does. We’re still in the middle of it all.”

Politics on the edge

The political backdrop is just as stark. Today’s Israel looks very different from the country that approved the Oslo Accords in the 1990s, and even from the one that expelled the ultranationalist Meir Kahane in the 1980s for the extremist ideas that now echo, at least implicitly, in the politics of National Security Minister Itamar Ben-Gvir and many in his Jewish Power party.

Ben-Gvir and Finance Minister Bezalel Smotrich, an ultra-Orthodox settler whose movement claims a biblical right to the West Bank, now hold central government roles and enjoy support across parts of the coalition and the public.

That shift has not exactly been subtle. There were celebrations when Ben-Gvir’s death penalty law, aimed specifically at Palestinians, passed. Because nothing says democratic moderation quite like tailoring capital punishment to an occupied population.

This week brought another milestone: a record 271 billion shekel budget, approved by lawmakers meeting in a fortified bunker. The budget redirected millions of shekels toward ultra-Orthodox and hardline settler groups, in what analysts and opposition figures described as an effort to keep Netanyahu’s government afloat amid continuing military operations.

Ahead of Monday’s vote, Smotrich said: “Anyone who votes against the budget is voting against Israel’s security, against tax relief for working people in Israel, and against taxation of the banks.”

Unsurprisingly, the biggest winners are likely to be his own base, including the far right and settler movements.

Aida Touma-Sliman of the left-wing Hadash party said the government has been pushed further in this direction by international indulgence. “Of course it’s got more extreme,” she said. “The whole world has looked on and found excuses for them while they committed genocide [in Gaza]. Of course, they think what they’re doing now is acceptable. The whole world has said it is.”

Coming storms

The question now is how long this version of right-wing politics can hold up once the public starts paying the full price for endless regional war.

For much of the campaign in Gaza, Israel faced little more than rhetorical pushback from the United Nations, the European Union and several Western governments. That changed this week when those same actors condemned the death penalty law aimed at Palestinians.

So far, Israel has been partly shielded from the economic blowback. But analysts warn that immunity rarely lasts forever.

A late-March analysis in Le Monde said the war with Iran has already brought substantial costs through higher defence spending, lost productivity from reservist mobilization and weaker consumer activity. Temporary tax reductions have mostly spared consumers from the expected rise in fuel prices after Iran closed the Strait of Hormuz, but that relief may not hold.

Political economist Shir Hever warned that because Israel imports fuel, any buffer is only temporary.

“Every previous conflict Israel has entered into has been on the back of an agreed budget, with clear aims and solid financial baselines from which to measure those aims,” Hever said. “However, what we’re seeing develop is the sort of economy you might see in a totalitarian state, where military expenses are undertaken arbitrarily, with no consideration for how that might fit with the wider economy.”

In other words, the spending is moving faster than the planning, which is usually a warning sign even before the accounting starts.

Ultimately, the war’s end is likely to be decided less by Israel than by a US president whose approach has been, at best, unpredictable.

Asked by the US broadcaster Newsmax how far Israel had gone in meeting its goals this week, Netanyahu settled on one word: “halfway.”