DAY 19 OF THE GAZA WAR: Rockets Hit Central Israel, Signs of Hostage Deal: Ground Offense on Hold

Tel Aviv Diary October 25, 2023

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Today was another day of waiting. Tel Aviv experienced a quiet day without any rockets. However, as I was writing this piece, there was a barrage of seven rockets aimed at the center of the country. While none targeted Tel Aviv, a few missiles headed towards Ben Gurion Airport, while others fell short of Tel Aviv, landing in Bat Yam, Holon, and Rishon Letzion. One rocket directly hit the third story of a building in Rishon Letzion. As a result, two people were lightly wounded; they were treated on the spot. A rocket also landed in the Petah Tikva area, slightly injuring two people. Another barrage was fired at Ashdod. Hamas fired two long-range rockets, one towards Eilat and the other towards Haifa. Both fell far from their intended targets. The number of rockets fired by Hamas at areas around the Gaza Strip dropped dramatically today

President Herzog and Michal Herzog with Iron Dome Battery

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In the North, Hezbollah fired several anti-tank missiles at Israeli forces. No one was injured. Israel counter-attacked several Hezbollah squads before they could launch their missiles. There was also a report that Israel targeted the Homs airport, in Northern Syria. If this is true, it was to prevent an arms shipment from Iran from reaching Hezbollah.

For most of the day, the primary topic of discussion was the fate of the 220 hostages still being held captive by Hamas. The Prime Minister of Qatar stated in a press conference this morning that negotiations had “progressed significantly concerning the release of some hostages.” Israelis, especially the families of the hostages, waited for news throughout the day. Regrettably, as of tonight, no concrete news has emerged. There are reports that Qatar is working on a phased release of hostages, (e.g., 20-30 at a time), in exchange for undisclosed demands from Hamas. One rumor suggests Hamas will release all Israeli children and elderly hostages, in exchange for the return for Palestinian women and elderly prisoners held by Israel. It was reported today that 138 of the 220 hostages hold either dual citizenship, or are not even Israeli citizens.

Hamas could prolong the hostage crisis situation for weeks, which concerns Israeli military officials. Hamas has 220 prisoners and can release them very gradually, putting ground operations on hold. While many argue that Hamas is being weakened due to Israeli air operations, it's challenging to keep all the 350,000 reserve soldiers idle. My concern is that the world might soon forget the events of October 7th, and pressure will mount against a ground assault, which is the only way to remove Hamas from power. Today, French President Macron joined those advising against a ground assault on Gaza.

At a press conference, President Biden stated that that the situation of October of 7th will not return, Hamas will never be allowed to remain in power. One of the questions asked by journalists was:

Q — Have you sought assurances from PM Netanyahu about holding off the ground invasion into Gaza until the release of hostages?

Biden —  No. Well, I have indicated to him that if that's possible, to get these folks out safely, that's what he should do, it's their decision, but I did not demand it.

I don’t usually quote Senate Minority Leader Mitch McConnell, but this is what he tweeted today.

“Anti-Semitism on college campuses. Disgraceful “both-sides-ism” from the media and the White House. For decades, the West pledged “Never again.” We pledged to stand with Israel. After the deadliest attack on Jews since the Holocaust, God help us if we don’t mean what we say.”

Prime Minister Netanyahu addressed the nation tonight. Many expected a significant announcement, but in the end, he primarily emphasized two campaign goals: 1) to remove Hamas from power and 2) to secure the return of the hostages.

For the first time in his speech this evening, Netanyahu noted that after the war, everyone's role in the failure of October 7th would be investigated, including his own. This acknowledgment is the closest Netanyahu has come to accepting any responsibility for the Simchat Torah tragedy. The Prime Minister’s lack of personal accountability has been a point of contention among many Israelis, especially when almost everyone else involved in a position of leadership has publicly acknowledged their responsibility for the failures.

The Economic Costs of the War

It's still early, but it's evident that this war will have a significant negative impact on Israel’s economy. Some statistics highlight this concern:

• 350,000 people have been on reserve duty for two and a half weeks, with no end in sight.

• Beyond those in serving in the Reserves, there are 200,000 Israelis displaced within the country, and most of them are currently not working.

• Evening visits to malls reveal deserted spaces. The retail sector, which previously employed 300,000 people across two shifts, now mostly operates with just one shift, leaving 150,000 employees without work.

In addition, construction in Israel has largely come to a halt. Only about 10% of the construction projects are progressing. Palestinian workers, who constitute 80,000 workers in the construction industry, cannot come to work. Moreover, a third of the foreign workers have left. Many mayors have also halted construction projects in their cities. Israeli builders owe banks half a trillion Shekels. If construction doesn't resume soon, many of them might face bankruptcy. Builders are now pushing for permission to hire more foreign workers.

The economy's state will undoubtedly be a significant concern in the upcoming months.

BUSINESS

The Israeli start-up Island, which develops a secure browser for organizations, announced a $100 million funding round. The investment was led by American fund Prysm Capital, with participation from another new American investor, Canapi Ventures, and existing investors including Insight Partners, Sequoia, Stripes, Cyberstarts, and Georgian. The investment values Island at $1.5 billion, a 15% increase from its last valuation in 2022. Since its inception, Island has raised a total of $325 million. Island was founded in September 2020 by CEO Mike Fey and CTO Dan Amiga, both have prior successful exits with cybersecurity startups.

Highcon, a company developing digital systems for rapid cardboard packaging production, is preparing to raise funds from investors, the public, and strategic partners to sustain its technology and continue its operations. The company secured a commitment for a $2.5 million investment from main shareholders Benny Landa, JVP Fund, LR Group, and strategic partner Sealed Air. This funding is conditional upon a capital merger, increased registered capital, and executing a public/private issuance or rights issuance within 60 days. Concurrently, Highcon, managed by Shlomo Nimrodi, signed a strategic cooperation agreement with BHS Corrugated, the world's largest corrugated machinery producer. The partnership will encompass sales to the corrugated cardboard market and support for Highcon's logistics and production costs.