DAY 172 OF THE GAZA WAR: Netanyahu Continues to Stir the Pot, Debate in British House of Commons, Another Hostage is Dead

Tel Aviv Diary, March 26, 2024

The crisis in U.S.-Israel relations continues to escalate, largely due to Prime Minister Netanyahu’s recent actions. Today, Netanyahu’s office released a statement in his name reacting to Hamas's stance on ongoing negotiations — stating it as “clear proof that [Hamas] is not interested in continuing talks, and a sad testament to the damage caused by the UN Security Council resolution”— has significantly upset the US Administration. The U.S. finds Netanyahu's claim—attributing damage to the UN resolution—baseless, especially since Hamas's position was declared hours before the UN's decision. Furthermore, there is considerable anger directed towards Netanyahu for his decision to withdraw the negotiating team from the hostage talks, blaming this move on Hamas's response, and the US's failure to exercise its veto power.

Contrary to Netanyahu's stance, several sources suggest that despite Hamas's public pronouncements, the gap between the Israeli and Hamas positions is possible to reconcile. Members of the War Cabinet, as well as representatives of the Security Services, are all of the opinion that Israel should agree to accept the proposed deal to secure the release of the 40 hostages. Tonight, Raviv Drucker, a respected TV commentator, expressed his belief that Netanyahu is obstructing a hostage release agreement because it would jeopardize his coalition. Words fail to capture the gravity of that allegation.

URIEL BARUCH

It was announced tonight that Hamas-held hostage Uriel Baruch (32), taken captive from the Supernova music festival was murdered and that Hamas is holding his body.

HOSTAGE DISCLOSES SHE WAS SEXUALLY ASSAULTED

Amit Soussana disclosed, for the first time publicly, to the New York Times that she was sexually assaulted while in Hamas captivity.

BRITISH HOUSE OF COMMONS DISCUSSES ISRAEL & GAZA

Today, quite unexpectedly, my wife and I attended a one-hour debate at the British House of Commons on the UN Resolution concerning Gaza that was passed yesterday, titled “Israel and Gaza.”. Prior to the debate, we observed a question and answer session with the British Justice Minister, an experience that was impressive in its own right. The depth of knowledge displayed by both the Minister and the questioners was unlike anything I've witnessed in either the US or Israel. The civility of the debate was also noteworthy, a stark contrast to what is often seen elsewhere.

The segment on Israel commenced with a statement by the Minister, in this case, Minister for Foreign Affairs, Andrew Mitchell. During his speech, Mitchell lauded the passage of the resolution and emphasized that the release of the hostage was as crucial as the demand for a ceasefire. Furthermore, Mitchell expressed disappointment that the announcement of the vote did not include condemnation of the massacre perpetrated by Hamas on October 7th.

Mitchell was then responded to by Shadow Secretary of State for Foreign Affairs, David Lammy, who also celebrated the passage of the UN Resolution. Then, Lammy raised concerns about starvation in Gaza, questioning why the UK is not doing more to alleviate this problem. Lammy further questioned the UK's arms sales to Israel, inquiring whether they would be halted due to Israel's alleged violations of international law. In response, Mitchell expressed his gratitude to the honorable Lammy for his support and clarified that the UK was actively working to increase aid to Gaza. Mitchell also noted that Israel purchases only 0.2% of its arms from the UK and that the UK constantly reviews and reassesses its arms sales.

For an hour, the debate went back and forth. Every time a Labour MP was called upon, they criticized Israel for causing starvation or violating international law. Mitchell addressed all these critiques in his responses. Conversely, when Conservative MPs were called upon, they emphasized the importance of focusing on the urgency for Hamas to release all the hostages.

Throughout the exchange between Labour and Conservative MPs, four comments stood out:

• A Conservative MP expressed his dismay at the detention of two survivors of the Nova Music Festival by border police in Manchester, questioning the Commons if such actions were deemed abhorrent. The room resounded with affirmations, and the Minister assured that the incident was regrettable and that the Home Secretary was personally investigating the incident.

• A Labour MP accused Israel of committing genocide, a claim that Mitchell indignantly refuted. He countered by asserting that it was Hamas who committed genocide on October 7th, describing that date as “the worst day in Jewish history since the Holocaust.”

• Another MP referenced a statement by Ben-Gvir advocating for an attack on Rafah, mistakenly implying that Ben-Gvir, as Minister for National Security, has the authority to make military decisions, which is not the case.

• Finally, an MP brought up instances where Israeli soldiers posted videos, as well as selfies engaging in inappropriate behavior and misconduct.

Following the debate, I was left with four distinct thoughts. Firstly, we had better hope that Labour does not come to power in the UK any time soon. Secondly, the IDF must enforce the ban on soldiers taking and sharing of videos. It's widely known that soldiers are not supposed to have phones in Gaza, and with the technology available to detect these devices, it's unconscionable that this practice continues. Thirdly, Ben-Gvir really needs to remain silent, which he likely won’t. He continues to say inappropriate things for a government minister. Just today, Ben-Gvir claimed that Biden was willing to sacrifice Israel, and alleged that Trump would be better for Israel. Finally, Israel must take immediate action to either decisively disprove the allegations of starvation in Gaza or to ameliorate the situation through proactive means. For COGAT to merely publicize the number of aid trucks entering Gaza is a diminutive, wholly insufficient act.

GAZA

Army spokesman Daniel Hagari revealed additional information regarding what has been going on in Shifa Hospital. Israel has already captured over 500 terrorists, and a significant number of Hamas and Islamic Jihad continue to be held up in the maternity and emergency wards. Hagari asserted that the terrorists were destroying the hospital by fighting from within it. He also reported that no patients and no hospital staff were harmed by the IDF during the hospital's latest takeover.

In addition, Hagari listed a number of high-level Hamas leaders who were caught and stated again that there were still more at large in the hospital. Hagari also released a video (see below) of one of the Hamas leaders talking about why they went to Shifa.

Moreover, Hagari stated that a very similar operation was taking place at the Amal hospital in Khan Younis. Lastly, Hagari finally confirmed that Marwan Issa, the Hamas Deputy Chief of Staff was killed three week ago in an IDF air raid.

IN THE NORTH

Today was a particularly violent day on the Northern border. Hezbollah attacked Israel with anti-tank missiles, once again targeting the Air Force surveillance base on Mt. Meron. Additionally, Hezbollah also struck the winery at Avivim, resulting in its complete destruction. Israel retaliated with strikes deep into Lebanon, firing on strategic Hezbollah locations. Following, Hezbollah launched a barrage of 50 rockets at Northern Israel, some of which landed south of the confrontation line. Are events spiraling out of control? Not yet, but the potential for such a scenario exists at any given moment.

TRUMP

In an interview with Yisrael Hayom, former President Trump asserted:

You have to finish up your war. You have to finish it up … And we gotta get peace. We can't have this going on. And I will say: Israel has to be very careful, because you're losing a lot of the world, you're losing a lot of support.

BUSINESS

Elbit released its results for 2023. The company’s sales growth was impeded by its ability to produce products. Elbit now has an $18 billion backlog.

Revenues for the year ended December 31, 2023 increased by 8% to $5,974.7 million from $5,511.5 million in 2022.

Aerospace revenues increased by 8% in 2023 as compared to 2022, mainly due to training and simulation revenues in Europe and UAS revenues in Asia Pacific and Europe, partially offset by lower PGM sales. C4I and Cyber revenues increased by 6% year-over-year mainly due to C4I revenues in Asia Pacific. ISTAR and EW revenues increased by 13% in 2023, as compared to 2022, mainly due to sales of Electronic Warfare and Electro-Optic systems in Europe, and countermeasure systems sales. Land revenues increased by 12% in 2023 as compared to 2022, mainly due to the increase in artillery and weapon station sales in Europe and ammunition and munitions sales in Israel. ESA revenues were similar year-over-year.

Cost of revenues for the year ended December 31, 2023 was $4,491.8 million, as compared to $4,138.3 million in the year ended December 31, 2022.

Non-GAAP^(*) gross profit for the year ended December 31, 2023 was $1,533.9 million (25.7% of revenues), as compared to $1,406.6 million (25.5% of revenues) in the year ended December 31, 2022. GAAP gross profit in 2023 was $1,483.0 million (24.8% of revenues), as compared to $1,373.3 million (24.9% of revenues) in 2022.

Research and development expenses, net for the year ended December 31, 2023 were $424.4 million (7.1% of revenues), as compared to $435.7 million (7.9% of revenues) in the year ended December 31, 2022.

Marketing and selling expenses, net for the year ended December 31, 2023 were $359.1 million (6.0% of revenues), as compared to $326.0 million (5.9% of revenues) in the year ended December 31, 2022.

General and administrative expenses, net for the year ended December 31, 2023 were $330.3 million (5.5% of revenues), as compared to $313.0 million (5.7% of revenues) in the year ended December 31, 2022. General and administrative expenses in 2023 include approximately $34 million of expenses related to a write-off of an uncollectible balance of contract assets of a discontinued project.

Other operating income, net in 2022 amounted to $68.9 million and resulted mainly from capital gains related to the sale of buildings and investments by subsidiaries in Israel and in the United Kingdom and a grant received by a subsidiary in Israel.

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The startup FundGuard, which develops software for managing investment portfolios for funds, announced today (Monday) that it has raised 100 million dollars. The large fundraising round was led by the Israeli Key1 Capital fund – a growth investment fund established by three Israelis who are former Goldman Sachs employees. Participants also included the Hamilton Lane, Euclidean Capital funds, and the existing investors – Blumberg Capital and Team8.

FundGuard's CEO, Lior Yogev, says that the majority of the capital from this round will go into the company's coffers, with a small secondary component - the sale of stakes by existing shareholders - the extent of which he declined to detail. In total, FundGuard has announced investments amounting to more than 150 million dollars to date. The previous fundraising round for FundGuard was announced in April 2022.

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Barak Fargon worked at Google as a senior software engineer specializing in data and privacy when he met with his two old friends from the army days, Alon Naphta and Omri Eldis. The latter two were working at the Israeli company Singular, dealing with finding solutions for various data problems themselves. “We experienced all those problems we are working on today, like broken dashboards and data with various issues. That's also where we saw the power of using data, as companies that managed to use data in a deep and extensive manner were the ones that succeeded in business,” Naphta shares. Instead of continuing to suffer from these problems, they decided to find a solution and together established Foundational, a new startup revealed today for the first time, with a funding round that includes participation from Fargon's former employer – Google.

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A PIECE OF HISTORY

The Altalena Affair

The Altalena Affair stands as one of the most contentious chapters in Israel's formative years. On June 1, 1948, an accord was reached between Israel Galili, on behalf of the government, and Menachem Begin, leader of the Etzel, to disband the Etzel and integrate its units into the Israel Defense Forces. The initial agreement called for the integration of Etzel battalions into the Alexandroni and Givati Brigades, whereas Etzel units in Jerusalem, which was not officially part of Israel at that time, would remain independent.

Concurrently, Etzel had been acquiring arms in France, including the purchase of an LST (Landing Ship, Tank), which they named the “Altalena”. This ship was designed to land troops directly onto beaches and carried 500 men and women, 5,000 rifles, 450 machine guns, and a million rounds of ammunition.

Originally, Ben-Gurion had permitted Etzel to secretly land the “Altalena,” despite the agreed upon ceasefire conditions that prohibited rearmament. However, Etzel demanded that 20% of the arms be allocated to its units, a proposition that Ben-Gurion rejected, emphasizing the unity of the IDF. Despite this disagreement, Etzel proceeded to land the “Altalena” on June 20th at a beach north of Netanya, beginning to offload the cargo and passengers. However, the IDF surrounded the area, taking control of the beach.

Subsequently, the “Altalena” returned to sea and anchored off the coast of Tel Aviv. When negotiations between Etzel and the government failed, Ben-Gurion ordered the shelling of the ship. The Altalena was engulfed in flames, sank, and along with it some of the arms, 12 crew members and 70 passengers were lost. The potential for civil war loomed, but Begin refused to allow it. Etzel fighters rejoined the IDF, this time as individuals rather than as units, with Etzel remaining independent in Jerusalem until September

.