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Apr 03, 2026

Israel Faces $112 bn War Burden as Public Endurance Wanes Amid Iran Conflict

AI Summary
Two‑and‑a‑half years of successive wars have cost Israel an estimated 352 billion shekels ($112 bn), while a record $271 bn budget funds expanding settlements and ultra‑Orthodox subsidies. Despite 78 % of Jewish Israelis still backing the war, mounting financial strain, international condemnation and an uncertain U.S. stance raise questions about how long the nation can sustain its “existential” fight with Iran.

Analysts say that more than two years of relentless campaigns against Gaza, the Houthis, Lebanon and now Iran have reshaped Israel’s politics, economy and social fabric.

Washington, rather than Jerusalem, is likely to decide the ultimate outcome of the conflict that Israeli leaders describe as an “existential battle” with Tehran.

According to the Bank of Israel, the cumulative cost of these wars has reached 352 billion shekels (about $112 bn), which translates to roughly 300 million shekels ($96 m) per day. The financial pressure is compounded by the International Court of Justice hearing credible genocide accusations and the International Criminal Court’s arrest warrants for the prime minister and a former defence minister.

Domestically, Israelis endure frequent air‑raid alerts and school closures, while many families juggle work and shelter duties. Yet a poll by the Israel Democracy Institute in late March showed that 78 % of Jewish Israelis still support continuing the war, even as a majority doubt that Washington and Israeli planners have fully grasped Tehran’s capabilities.

Political commentator Dahlia Scheindlin told Al Jazeera that a “graveness” has settled over the population, noting a grim determination to press on despite exhaustion.

Israel’s right‑wing coalition, led by figures such as National Security Minister Itamar Ben‑Gvir and ultra‑Orthodox Finance Minister Bezalel Smotrich, has pushed through a controversial death‑penalty law targeting Palestinians and approved a record $271 bn budget. The budget allocates substantial funds to ultra‑Orthodox and settler communities, a move described by critics as an attempt to shore up Prime Minister Netanyahu’s waning support.

Internationally, the United Nations, European Union and several Muslim‑majority states have condemned the new death‑penalty legislation, though Israel has so far avoided direct sanctions.

Economists warn that the war’s fiscal impact extends beyond defence spending. A Le Monde analysis highlighted rising defence outlays, lost productivity from reservist mobilisation, and dampened consumer activity. While temporary tax cuts have mitigated fuel‑price spikes caused by Iran’s closure of the Strait of Hormuz, political economist Shir Hever cautions that Israel’s reliance on imported fuel means any relief is short‑lived.

Hever likens the current economic trajectory to that of a “totalitarian state,” where military expenses are pursued arbitrarily, ignoring broader economic stability.

Ultimately, the war’s duration may hinge more on U.S. policy than Israeli strategy. When asked by Newsmax about progress toward its goals, Prime Minister Netanyahu could only claim the effort was “halfway” achieved.