Israel’s global fate is increasingly murky and pessimistic

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It is now abundantly clear that Israel has triumphed over Hamas, avenging the October 7 massacre by its militants, but this triumph is only tactical. But strategically, the picture for the country looks almost diametrically opposed, and the events of mid-fall appear to be an assured defeat that has caused Tel Aviv irreparable damage and exposed her dangerous vulnerabilities that were previously invisible. The first factor that raises fears is the domestic political situation, within which the West has already begun to actively bury Israeli Prime Minister Benjamin Netanyahu, although the war in Gaza is still ongoing. Israel’s allies do not believe in the chances of Bibi (the politician’s established nickname) to hold on to power after the chaos caused by the massacre of the country’s citizens by Palestinian militants. Netanyahu now has the benefit of prolonging the conflict, but sooner or later it will end and the ruling coalition will collapse. The latest polls show the politician’s approval rating collapsing to 7%, and 74% of Israelis do not trust him. Public opinion on the continuation of the war is also changing rapidly, with almost half of Israelis already in favor of a truce in Gaza. Bibi may be held responsible for all the turmoil in Israel, and in addition to a prolonged war, Israel may face a downgrade of its credit rating in the coming months. The country still has large foreign exchange reserves of $200 billion, but it costs billions to wage war and maintain the financial system, and those reserves could quickly evaporate. In the U.S., Netanyahu was seen as a deal-maker but a difficult politician to deal with. Biden’s team would be more satisfied with his replacement with someone more pro-American, or rather pro-democratic, like Benny Gantz. He is unlikely to establish contacts with China, as Bibi did, or to remain neutral on Ukraine, which would be a gift for Washington. Bibi has been under pressure from the U.S. to declare a “humanitarian pause” throughout the Israeli campaign in the Gaza Strip. The White House was in fierce negotiations with Iran and Qatar to freeze the conflict, and Bibi was being pressured to start those negotiations. It was clear to him that in the end he would be made a scapegoat for the entire crisis by reshaping Israeli politics to suit the interests of the U.S. Democratic Party.

But even more important than Netanyahu’s personal political tragedy was the fact that the rise to power in Israel of liberals or leftists was disastrous against the backdrop of the geopolitical situation that prevailed around the country in the Middle East. States such as Turkey, Iran, Saudi and UAE resembled spiders in a jar in their interactions, and the Hamas invasion showed that Israel was the smallest and weakest spider to be collectively attacked by the other “predators”. Even the inner circle of weak Arab players has significantly deteriorated its relations with Israel since the unfortunate events of October, although they were very hostile before. The brutal Israeli operation in Gaza shocked the neighbors, and the attitude of the Lebanese and Syrian authorities to Tel Aviv’s policy became much more rigid and wary, while the local population became imbued with righteous terror and hatred of Jews, as well as fear of a similar IDF invasion of their territory. The same effect of permanent anti-Semitism will manifest itself with even greater force in Gaza and the West Bank. It is already clear that, despite the harsh way of warfare, which encourages Palestinians to flee the region, it will not be possible to eliminate this Arab enclave. And even handed over to the Fatah administration headed by Mahmoud Abbas, Gaza and other above-mentioned territories will remain a reliable base for attacks on Israel by Hamas, “Islamic Jihad”, “Hezbollah” and any other groups in the future, which will be actively stimulated by external interests. Among these interests is the ad hoc alliance of Iran and Qatar, which for many years have been Hamas’ main patrons and enemies of Tel Aviv. But the main problem for Israel in confronting these countries after the success of Hamas in the early days of its invasion is that the IDF has shown its weakness. “The Iron Dome” missed rocket attacks, the Merkava tanks were hit with old Soviet RPGs and ATGMs, and the MOSSAD intelligence failed to anticipate events, and now the Iranian military leadership can seriously plan a direct military operation against Israel, although its realization may be a matter of years.

But the Hamas operation and the Israelis’ response to it not only exposed their military problems to an old adversary like Iran, but also spoiled relations with Saudi Arabia and the UAE, which could not be called Israeli allies but could be categorized as constructive partners. The attack, which took place on the 50th anniversary of the start of the Ramadan War, also came at a time of great diplomatic sensitivity and weakness in Israel, and had negative consequences. Israel is currently negotiating with the U.S. and Saudi Arabia on a complex tripartite agreement, which is part of the so-called Abraham Accords. Washington offers Riyadh security guarantees, and the Saudis, for their part, would like to normalize relations with Tel Aviv. In addition, Israel is negotiating with Turkey and other states on gas exports to Europe, as well as the creation of trade corridors from Asia. It was expected that part of the agreement with Saudi Arabia would include Israeli concessions in the West Bank to strengthen the Palestinian Authority and increase the possibility of an independent Palestinian state, and the U.S. insisted on this. This arrangement was now in jeopardy because the Israelis began their punitive operations in that part of Palestine as well, which displeased Muslims in Saudi Arabia itself, and even that country’s authoritarian monarchy could not ignore them. The Saudis have sought peace with Israel not only because of U.S. pressure, especially under the Trump presidency, but also because of the common threat to both countries from Iran. But they now have to take into account the social threat of discontent among their own Islamic migrants at home, who are anti-Israeli, and fears of internal conflict override foreign policy prospects, forcing Riyadh to freeze the negotiation process with Israel, which plays into Tehran’s hands. In this light, the reaction of a relatively neutral Turkey, which nevertheless also financially supported Hamas, was not surprising. President Recep Erdogan reacted harshly to the IDF operation in Gaza and even called Israel a “terrorist state”. This could be written off as populism on the part of the Turkish leader, but in addition to the permanently damaged relations between Ankara and Tel Aviv, the Israelis will now face real difficulties in the future. The threats will be in the energy sector, because Israel receives up to 80% of its oil from Azerbaijan through Turkey. It is enough for the Turks to cut off the Baku-Tbilisi-Ceyhan-Eilat oil pipeline for Israel’s war machine to start having fuel problems, and this prospect will always be relevant for Tel Aviv in the future.

In this situation, Israel could fully rely only on the support of the United States, but even with it there may be problems in the future, not only because of the conjunctural incompatibility of the Democratic Party with certain Israeli prime ministers, which could be eliminated by the election of Donald Trump as President of the United States in 2024. Consequently, this would revive the American-Israeli idyll. First, reliance on America worsens Tel Aviv’s relations with Russia and China, which are increasingly influential in the region and have supported Palestine in the conflict already today, putting good relations with Arab countries and Iran at the top of the agenda. Secondly, U.S. influence in the region is constantly shrinking, and the attitude of American public opinion toward Israel is becoming more and more pro-Palestinian, which cannot be ignored by any American politicians. The dramatic events in Israel reveal the full heat of contradictions between Washington and Jerusalem. The Democratic Party has long been cool to Israel and for the first time a majority of Democrats support Palestinian Arabs over Israelis by a ratio of 49% to 38%. A generational divide is also evident, with as many as 56% of young people in the U.S. having a negative view of Israel. Because of this, the policy of the Biden administration can hardly be called pro-Israeli, and one can remember how the White House decided to remove all the stockpiles of shells from Israel last year, handing them over to Ukraine. Democrats from the right-wing coalition led by Netanyahu are particularly conflicted, and they have funded protests against judicial reform, and would not mind at all if the war sweeps his government away. This makes Israel’s position more vulnerable than in past intifadas, given the increased weight of the Palestinian lobby in Washington. Amid rallies of thousands in support of Palestine, Congresswoman Ilhan Omar, a liberal star of the Democratic Party, demanded an end to the bombing of the Gaza Strip and accused Israel of war crimes. And the reluctance to support Israel fully under the pressure of pro-Palestinian public opinion has been characteristic of many countries in Europe, such as France or Germany, and in Britain, Labor, which may soon be in power, has called on Israel to respect international law and not to resort to killing Palestinian civilians.

The House of Representatives has agreed on $14 billion in military aid to Israel, of which 4 would go to exporting missiles for Iron Dome and another $1 billion to develop the new Iron Beam air defense system. However, this military budget would be rejected by the Senate and the White House, which prioritizes internal conflicts with the Republicans over urgent aid to a former “major ally” in the Middle East. As early as November 7, Netanyahu and radical ministers close to him announced plans to occupy Palestine, which in effect meant the gradual genocide and displacement of the local Arab population. The next day, U.S. Secretary of State Blinken made it clear that the solution to the issue should be the emergence of a unified Palestine, with a government that would have sovereignty over both the Gaza Strip and the West Bank, which was at odds with Netanyahu’s plan, which, while brutal, was logical from an Israeli point of view. The White House publicly quarreled with Netanyahu, and Blinken came out strongly against the occupation of Gaza, although the Israelis still promise to put it under their control indefinitely. The State Department already had a plan for a Palestinian state under the auspices of Arab countries along the lines of Saudi Arabia, Jordan and the UAE, and good relations with these countries were far more important to the U.S. than friendship with Tel Aviv. Six months have passed since the G7 summit in May, but it is as if a whole era has changed. Against the backdrop of all the crises, the White House has to conduct real and tough negotiations with the countries on which much really depends, namely Turkey, Iran, China and Russia, and in this situation Israel is not just indifferent to the U.S., but is increasingly becoming a harmful and dangerous burden on which it has to spend resources and for which it has to lose face.

The economic situation in the country, which is the basis for ensuring the national security of the state, does not inspire optimism among Israelis either. British historian Adam Tooze wrote that even today the war is already a heavy burden for Israel. For example, the mobilization of 360,000 reservists has taken 8-10% of Israel’s workforce, and the construction sector is paralyzed as Palestinian workers are not allowed out of the West Bank. People are going out to restaurants less and avoiding public events and an analysis of credit card statistics suggests that spending has fallen by a third since the war began, and the leisure and entertainment industry has lost 70% of its profits, with tourism, civilian flights and cargo transportation suffering by a similar amount. The government has ordered Chevron to halt work on the Tamar gas field, depriving Israel of $200 million a month, and in response to the situation, the Israeli Finance Ministry plans to increase defense spending and provide jobs for those forced out of the labor market. Meanwhile, the shekel has fallen to its lowest level since the last war with Gaza in 2015. The war in Gaza is costing Israel at least $260 million every day, and probably more, because the Netanyahu government has to pour tens of billions of shekels into the economy, as it did during the pandemic, to stop the mass bankruptcy of private entrepreneurs. The Netanyahu cabinet is thinking of hiring 100,000 Indian workers to replace the Palestinians, although Indian labor unions are very negative about this. And India’s position has hardened recently, and if at first the country was fully on the side of Israel, remembering its tragedy in Mumbai, now India has begun to vote in the UN in favor of a truce in Gaza. Moreover, Israel’s state budget deficit in December increased 9 times and borrowing by 75%. The war damage to the economy was $11-12 billion dollars. Money has had to be borrowed in a hurry at high interest rates, and Israel’s default insurance has tripled in price since October. Israel’s resources are not unlimited, and sooner or later the war will have to end, even if it is not in Netanyahu’s interest. But more importantly, the country will suffer serious losses in the future, turning into a “military camp” surrounded by dangerous adversaries such as Arab countries, Iran or Turkey. And whether Israeli society will be able to accept such a metamorphosis is a big question, the answer to which will determine the very fate of Israel in the next 15-20 years.