DAY 312 OF THE WAR- Hamas Rocket Fired At Tel Aviv, Ben-Gvir Plays With Fire, Israel’s Credit Rating Lowered, Hostage Negotiations
Tel Aviv Diary, August 13, 2024
Zoom Briefing SundayAugust 18th, 6 PM Israel Time, 4 PM GB, 11 AM EDT, 8 AM PDT
As Israelis sat on edge, bracing for an expected attack from Iran or Hezbollah, a loud explosion suddenly resonated throughout the Tel Aviv area. The cause of the explosion turned out to be a Hamas rocket fired from Gaza towards Tel Aviv, which ultimately fell into the sea off the coast of Tel Aviv/Yafo. This rocket was one of two launched from the Khan Younis area, close to where Israeli forces were stationed.
WILL IRAN AND HEZBOLLAH ACTUALLY ATTACK?
Meanwhile, there are growing voices suggesting that Iran or Hezbollah might not actually proceed with an attack. Recent reports indicate that Iranian officials have stated an attack will not occur if ceasefire talks prove successful. This development has fueled speculation. Additionally, the substantial U.S. military buildup in the region might be deterring the Iranians. The U.S. now has more aircraft available in the area than the entire Israeli Air Force, and the presence of the USS Georgia, which carries over 200 Tomahawk missiles—designated for offensive purposes—constitutes a credible, powerful force. While the U.S. officially stated that its role is limited to defending Israel, the Iranians cannot be certain that the U.S. would refrain from participating in an Israeli counterstrike aimed at destroying Iran’s nuclear facilities, should Iran choose to attack.
Of course, all of this could be merely idle speculation, and there remains a real possibility that the Iranians or Hezbollah could launch an attack on us tonight. Meanwhile, the U.S. is undertaking extraordinary diplomatic efforts to try to defuse the situation and foster progress at the summit meeting in Cairo on Thursday. CIA Director Burns will attend that meeting, while Amos Hochstein is scheduled to visit Lebanon tomorrow.
HOSTAGE NEGOTIATIONS
Today’s New York Times article titled “Israel Was Less Flexible in Recent Gaza Cease-Fire Talks, Documents Show” received extensive coverage in the Israeli media. However, there is nothing in the article that I haven't shared over the past few months, but the NYT provides evidentiary documentation to confirm that information.
The negotiating team has yet to receive their instructions from Netanyahu. Ironically, years ago, Netanyahu was dubbed "King Bibi," partly because of his perceived accomplishments. Today, the title seems appropriate as Netanyahu appears to be making all the decisions by himself.
BEN-GVIR PLAYS WITH FIRE
Today, our “National Pyromaniac,” otherwise known as the Minister of National Security, Itamar Ben-Gvir, led a group of Jewish extreme-right-wing supporters onto the Temple Mount, where they prayed, in violation of the established rules. Ben-Gvir subsequently released the following statement:
We are on the Temple Mount, on Tisha B’Av, to mark the destruction of the holy Temple. However, it needs to be said with sincerity that there is very significant progress here in the governance, in the sovereignty [regarding the Temple Mount]. As I have said—our policy is to enable [Jewish] prayer.
Criticism of Ben-Gvir’s actions were swift. Governance over the Temple Mount represents one of the most volatile issue in the Arab-Israeli conflict. Jordan, Egypt and Qatar quickly condemned the action, citing a violation of the status quo.
MK Moshe Gafni, head of the Degel HaTorah faction of the United Torah Judaism party, criticized Ben-Gvir for disregarding the “sanctity of the Temple Mount and harming the status quo.” Gafni accused Ben-Gvir of inflicting immense damage to the Jewish nation and inciting unnecessary hatred on Tisha B’Av, the solemn day that commemorates the destruction of the Jewish Temples.
Furthermore, Gafni stated that his party will have to “check with our rabbis whether we can be partners with him [Ben-Gvir] and will clarify this decision to the Prime Minister as well.” It should be noted that the overwhelming majority of rabbis prohibit Jews from even ascending onto the Temple Mount. The National Religious Zionists have found a subset of rabbis who contend that visiting the Temple Mount is permissible. Most of the other ultra-Orthodox Members of the Knesset also condemned the actions of Ben Gvir and his followers.
Prime Minister Netanyahu’s office released the following statement:
The setting of policy at the Temple Mount is directly subject to the government and the Prime Minister. There is no private policy by a specific Minister at the Temple Mount — not by the National Security Minister nor by any other Minister. This is how it has been under all Israeli governments.
The statement continues…
The incident this morning at the Temple Mount is a deviation from the status quo. Israel’s policy at the Temple Mount hasn’t changed — this is how it has been and how it will continue to be.
Ben-Gvir responded:
The National Security Minister’s policy is to enable freedom of worship for Jews at all places, including the Temple Mount, and Jews will continue to do so in the future as well. The Temple Mount is a sovereign area in the State of Israel’s capital. There is no law that permits engaging in racist discrimination against Jews at the Temple Mount or anywhere else in Israel.
In a “normal” country, Netanyahu would fire Ben-Gvir for his provocative violation of the status quo. However, of course, we are not a normal country. I also won’t hold my breath waiting for the ultra-Orthodox to leave the government over this issue.
UNBELIEVABLE MALEFICENCE
It’s very difficult to say, but only now, after ten months, has the Ministry of Economics decided to allocate funds to buy 20 mobile shelters designated for essential factories in the north. Rockets and missiles have been hitting the North for ten months, and only now they remember to act?
GAZA
According to the Army Spokesman, the Givati Brigade has killed 100 Hamas members in Rafah just in the last few days. Israeli ground troops worked together with the Air Force to attack the Hamas terrorists. In one case, they carried out a battle with a large number of fighters in a building. After killing the terrorists, they entered the building and found a large supply of weapons.
Fighting continued in Khan Younis today, as well.
RAFAEL’S UNBELIEVABLE NEW BOARD APPOINTMENT
The Israeli high-tech defense company, Rafael, reknowned for developing the Iron Dome system, has a new board member, Professor Alon Pickrosky. What qualifies Pickrosky for this position? Pickrosky’s qualifications for this position include being Prime Minister Netanyahu's surgeon and having issued a letter supporting soldiers charged with abusing Palestinian prisoners despite never having examined them. I am sure Pickrosky will be an excellent addition to the board.
ECONOMY
Israel’s Credit Rating Downgrade
Last night (Tuesday), the credit rating agency Fitch announced it had downgraded Israel's credit rating from A+ to A, assigning a negative outlook. This downgrade reflects the ongoing war in Gaza, heightened by geopolitical risks and military operations on multiple fronts. Fitch also cited the rising government deficit, projecting a deficit of 7.8% of GDP for the current year. Currently, the deficit stands at 8.1% of GDP, with a deficit ceiling of 6.6%. For 2025, Fitch projects a deficit of 4.6% of GDP, which remains relatively high due to anticipated reductions in military spending and an increase in state tax revenues. However, the agency's economists caution that the deficit could exceed these projections if the war extends into 2025.
The downgrade will prove costly for Israel as it increases the borrowing costs of the country’s rising debt. Moreover, it also does not reflect the real-world markets where Israeli debt has already been rated at BBB. In response to the announcement, both Prime Minister Netanyahu and Finance Minister Smotrich reacted with equanimity, attributing the downgrade to the ongoing war. Netanyahu added that the rating would rebound once we win the war
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Unfortunately, the situation is likely more complex, and the outlook is less optimistic. First, it is evident that Israel will need to substantially increase its Defense Budget going forward. To date, the current government has not cut back in other areas to try to balance the budget, nor has it started work on next year's budget—whose first draft is supposed to be ready by August 15th. Despite ten months of the war, no steps have been taken to reduce the budget deficit. The majority of the country’s income, either directly or indirectly, comes from the high-tech sector. Although this sector remains mostly healthy, there are indications that it is beginning to slow down.
Mekorot, National War Company
The National Water Company of Israel, Mekorot, has recently expanded its activities in the field of innovation by completing two new investments in Israeli startup companies— Argu and Bimmatch. This initiative was carried out by the Innovation Division, headed by the VP of Engineering, Yossi Yaakobi. With these new partnerships, Mekorot now collaborates with 11 different companies focusing on various areas, including water supply and quality, operations and maintenance, cybersecurity, energy management, and infrastructure maintenance, utilizing artificial intelligence
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The investment in Argu focuses on real-time video analysis, providing a new layer of protection for critical infrastructure companies that manage essential facilities with complex engineering requirements necessitating close monitoring of their integrity. Argu’s advanced system, based on a smart algorithm that feeds from Mekorot’s camera system, can identify and report anomalies in real time related to water security and quality, hazardous material incidents, physical security, and safety from sabotage, technical failures, or human error, as well as monitor complex processes in production lines. According to Ori Segal, Chairman of Argu, this solution will help Mekorot strengthen its water security capabilities, reduce the likelihood of malfunctions, and offer a unique ability to analyze and improve processes in real-time.
Bimmatch uses AI to automatically match all textual information and assets to the relevant elements in a building project. This allows everything to connect seamlessly, so the project manager will have the information they need right when they need it.
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A PIECE OF HISTORY
Israel Withdraws from Lebanon
With the collapse of the Syrian talks in March 2000, the possibility of resolving Israel's issues through an agreement with Syria was no longer an option. Since 1985, Israel had maintained control over a nine-mile wide strip in Lebanon, where, over the years, Hezbollah had been attacking Israeli troops. Additionally, the tragic helicopter crash that resulted in soldier fatalities underscored the high cost of maintaining the security zone. Barak, who had promised during his campaign to withdraw Israeli troops from the zone, explained his decision as follows:
The withdrawal had a critical political aim as well: to denude Hizbollah, with full international support, of its “occupation” fig leaf for targeting and terrorizing the towns and villages of northern Israel. Mofaz and a number of other generals, including the head of the northern command, were against the pullout. They argued that our withdrawal would give Hizbollah positions a direct line of fire onto Israeli border settlements. Several cabinet ministers, including Meretz leader Yossi Sarid, were also opposed, convinced that Hezbollah fire would continue or even escalate after we pulled out. I strongly doubted that, but in any case, I was convinced that a complete, internationally verified withdrawal of all Israeli forces from Lebanon represented a long-overdue end to a situation that was needlessly costing Israeli lives and hadn’t prevented periods of intense rocket attacks either. I insisted that not a single Israeli soldier or emplacement remain on Lebanese soil.
Barak had initially hoped for a gradual withdrawal, but after Israel handed over one fortification to the local South Lebanon Army (SLA), which was quickly overrun by Hezbollah, Barak realized that Israel would need to withdraw swiftly from Lebanon. He, therefore, developed a plan with Shaul Mofaz, the Army Chief of Staff, for a rapid pullout to be executed in a single night.
On the afternoon of May 23, 2000, Barak, who also served as Defense Minister, gave Mofaz the order to withdraw all troops from Lebanon. Overnight, all Israeli troops, including those in tanks, pulled out of the nine-mile security zone. The ones who paid the greatest price were Israel’s Christian allies in southern Lebanon. They were left vulnerable in the aftermath of the rapid withdrawal, coupled with the collapse of the South Lebanon Army (SLA), which left Christian villages, including Khiam, El Qlaia, and the Maronite village of Raymesh, vulnerable to Hezbollah’s advance. Many Christian families who had lived in the region for generations were forced to flee their homes as Hezbollah fighters took control of the area.
The situation, as Israel withdrew, was chaotic as entire communities abandoned their villages, leaving behind their homes, possessions, and even vehicles. At the Fatima Gate crossing, a key point on the Lebanon-Israel border, large groups of refugees, including the residents of Raymesh, which had a population of 12,000, sought refuge in Israel. These displaced persons, many of whom were associated with the SLA, feared retribution from Hezbollah, which was rapidly consolidating power in the region. Over the years, many returned to Lebanon. However, some stayed and made new lives in Israel.
Yesterday’s Radio Show