DAY 127 OF THE GAZA WAR: Moody's Downgrades Israel, Rocket Attacks in North, Hamas Servers Under UNWRA HQ

Tel Aviv Diary, February 10, 2024

MOODY’S DOWNGRADES RATING OF ISRAEL’S ECONOMY

On Friday night, Moody's International Rating Agency announced its intention to lower Israel's credit rating from A1 to A2. This marks the first instance in Israel's history of a credit rating downgrade. Additionally, Moody's also revised Israel's credit outlook to negative. The reasons given for the devaluation were that “the ongoing military conflict with Hamas, its aftermath and wider consequences materially raise the political risk for Israel, as well as weaken its executive and legislative institutions and its fiscal strength, for the foreseeable future.”

Prime Minister Netanyahu claimed that the rating downgrade was solely due to the war, asserting that once Israel is victorious, the credit rating will recover. Finance Minister Smotrich argued that Moody's decision was an entirely political maneuver against Israel, and had nothing to do with the country's economic condition. It also should be noted that in its report, Moody’s cited two mitigating factors: the decisive actions of the Supreme Court to maintain its independence and strength, and the robustness of Israel's civil society.

The concern in Israel is that, in the coming days, other credit rating agencies might follow Moody's lead and diminish Israel’s ratings. While the impact of such downgrades is primarily psychological, they could lead to increased borrowing costs for Israel and potentially weaken the Shekel.

LEBANON

Over the course of both Friday and Saturday, hostilities intensified along the Lebanese border, marked by a surge in more aggressive attacks. A notable incident involved an anti-tank missile striking a building in Kiryat Shmona. Additionally, on Friday morning, an unidentified aerial object was intercepted over Haifa Bay. Both days witnessed significant rocket barrages directed at  northern Israel, with around 30 rockets launched in each attack. In retaliation, Israel conducted operations against Hezbollah positions in Southern Lebanon.

A precise operation was executed against a vehicle transporting a key Hamas figure in Lebanon, located approximately 50 kilometers from the border. On Friday night, the head of one of the regional councils in the North publicly advocated for Israeli military intervention in Lebanon. This appeal underscored the grave repercussions that such measures could entail, likely leading to drastic outcomes for both Lebanon and Israel.

GAZA

The IDF Chief of Staff and the head of the Security Services visited troops in Khan Younis today, emphasizing the significance of Israel’s mission there. The day's most notable revelation came from the IDF, which disclosed its discovery beneath the UNRWA headquarters in Gaza. The Army uncovered an extensive tunnel network located directly underneath the UNRWA facilities, housing a significant server farm. This installation is believed to have been used by Hamas intelligence for storing their data and operational plans. Remarkably, the server farm was situated right below UNRWA's own servers within their headquarters, drawing power and, presumably, internet connectivity directly from UNRWA resources.

Discovery of these servers severely undermines any remaining claims of ignorance or non-involvement UNRWA might have had regarding Hamas's activities. Although UNRWA might not have been aware of every action taken by its affiliates, it certainly had knowledge of the operations taking place beneath and connected to its headquarters. In response to these allegations, the head of UNRWA issued a denial this evening, asserting they were unaware of the situation.

RAFAH

Meanwhile, the issue of how to handle Rafah and the million Gazans located there persists. Netanyahu publicly stated on Friday that he had ordered the IDF to prepare for an attack. It was revealed that during the cabinet meeting on Thursday night, Netanyahu conveyed the same message to the IDF Chief of Staff Herzi Halevi, while also criticizing him for the release of reservists. Halevi retorted that the release of reservists was in accordance with the war cabinet's mandate, adding that the IDF will follow whatever the political leadership dictates. However, Halevi emphasized that it is the responsibility of the political leaders to devise a plan for relocating the people of Gaza and to coordinate with the Egyptians before the IDF can proceed with military action.

HOUTHIS

The Houthis have persisted in their efforts to target ships in the region, however, during the past two days, US Navy vessels have successfully intercepted all their missiles. Meanwhile, US aircraft have destroyed several missile launch sites, as well as, a number of autonomous boats.

CIA HEAD TRAVELS TO EGYPT FOR HOSTAGE NEGOTIATIONS

CIA Chief, James Burns will travel to Cairo this week to participate in discussions aimed at reaching an agreement concerning the hostages. Israel has, thus far, declined to participate in the talks, insisting that Hamas first moderate its stance. There is a widespread expectation that Israel will eventually send a representative to Cairo for negotiations. As time passes, the hostage families are growing increasingly desperate, fearing the worst. Tonight, a number of protesters blocked the main Ayalon highway and were subsequently arrested.

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A PIECE OF HISTORY

THE FIRST KIBBUTZ ESTABLISHED — 1909

In 1909, a labor dispute developed between the workers of the Kinneret farm and the farm's director. The head of the WZO settlement office in Palestine decided to give the settlers part of the land to set up an independent worker's settlement. He allotted approximately 3,000 dunams on the southern end of the Kinneret to the worker's group. The group disbanded after the first year, and the land was handed over to another group known as the Romny group (named after the town from which it originated in Russia). The settlers named the settlement “Degania,” which became a ‘laboratory’ for collective settlement and was known as the “Kvutsa.”

Some of the early settlers of Degania included: A.D Gordon, as well as, the poetess Rachel (Bluwstein). In November 1911, the first settler was killed by Arab Mauraders. Subsequent kibbutzim founded throughout Israel modeled themselves on Degania. Today, Degania Aleph has a population of 530.