DAY 396 OF THE WAR: Netanyahu Fires Defense Minister Gallant, Appoints Loyalist Minister Katz Who Has No Military Experience, The Reason: To Allow the Ultra-Orthodox to Avoid IDF Draft.
Tel Aviv Diary, November 5, 2024
It is difficult for me to write this—I’m extremely upset and angry. I had finished today’s update early so I could go to bed and get up to watch the initial election results, as the polls begin to close. As I wrapped up, I told my wife— “Hopefully, there wouldn’t be anything more to add.” But then, shockingly, reports emerged that Netanyahu had fired Defense Minister Yoav Gallant tonight—in the middle of the war. Gallant is the most trusted person among the populace and the only government official whom the United States respects. Furthermore, we are bracing for an attack from Iran, at any moment. Gallant has extensive military experience, yet Netanyahu dismissed him because Gallant opposed efforts to exempt the ultra-Orthodox from military service.
To make matters worse, Netanyahu is appointing Israel Katz as Gallant's replacement. Katz, who has no military experience, is considered one of Israel’s least capable ministers—a concerning choice given the current stakes. Katz is primarily known for his loyalty to Netanyahu. Additionally, there are rumors that Gideon Sa’ar has agreed to join the coalition and take on the role of Foreign Minister. This development feels like a profound betrayal amid a national crisis.
GALLANT SPEAKS OUT
Defense Minister spoke to the nation tonight and explained why he was fired by Netanyahu. Gallant outlined three distinct reasons, citing disagreements over his beliefs that:
Every 18 year-old in the country must serve. The Army needs many more personnel than it has. The Prime Minister opposes actions to make that happen.
The country’s highest moral responsibility is to get back the hostages. Gallant contends that a deal can be reached to bring all the hostages home, but someone is blocking that effort.
There must be a National Commission of Inquiry to understand why the events of October 7th occurred and draw the relevant conclusions. The person who fired him opposes the convening of such a commission
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As a result, ten of thousands takes to the streets in Tel Aviv, Jerusalem, and every part of the country
IN LEBANON
Over the past week, Israel has partially withdrawn its forces from southern Lebanon. It is now clear that the IDF has nearly completed all operations near the border. The Army is currently clearing the last remaining emplacements along the first line of villages. The next steps depend on political leaders either negotiating an acceptable agreement with Lebanon or issuing new orders for the IDF to push deeper into Lebanese territory. I anticipate that progress toward reaching a ceasefire agreement will be made after the US election. Reports suggest that U.S. mediator Amos Hochstein will return to the region next week.
Today, the IAF once again struck Hezbollah targets in Syria and has acknowledged responsibility for the attack. Here’s the Army Spokesman’s statement on IDF operations in Syria:
Israeli Air Force fighter jets recently struck weapons depots used by Hezbollah’s munitions unit in the Al-Qusayr area of Syria, guided by intelligence from the IDF Intelligence Directorate.
Hezbollah’s munitions unit is responsible for storing weapons in Lebanon, and it has recently expanded its operations into Syria, specifically in the Al-Qusayr area near the Syrian-Lebanese border.
This is another example of Hezbollah establishing a logistical infrastructure for transferring weapons from Syria to Lebanon via border crossings. Hezbollah, with the support of the Syrian regime, endangers civilians by setting up its infrastructure in civilian areas.
SIREN AT MASADA
This morning, for the first time during the war, visitors climbing Masada to watch the sunrise were startled by an air raid siren. A drone from Iraq prompted the alert, which was quickly shot down by the Air Force. Throughout the day, Hezbollah fired multiple salvos at Israel, though fortunately, there were no reports of damage or injuries.
By the time you read this update, those of you in the United States will likely have cast your votes— although the results may not yet be final. I won’t attempt to predict the winner, but some historical perspective might be illuminating. In the history section, you can see the challenges that Prime Minister Netanyahu faced during President Obama's tenure. The explanation is straightforward: since President Carter, American presidents—of both parties—have believed that resolving the Palestinian issue is key to Middle East peace. President Clinton learned how difficult that was, however that didn’t stop Bush from trying to continue these efforts.
Following the 9/11 attacks, actions taken by Prime Minister Sharon helped avert any significant confrontations with Israel. When President Obama took office, he encountered a Netanyahu unwilling to make concessions. Despite Obama’s keen intellect, he was perhaps naïve enough to believe a peace deal with the Palestinians was achievable. Netanyahu, though reluctant to engage in peace negotiations, needed U.S. support to counter Iran, leading to eight years of strained relations, yet also unparalleled American support for Israel.
When Trump took office, he approached the Israeli-Palestinian conflict as if it were a real estate transaction, an approach that, predictably, proved unsuccessful. President Biden represents the first leader in a generation to refrain from actively seeking a resolution to the Palestinian-Israeli conflict, having observed the failures of many predecessors. Biden’s efforts—including a peace plan aimed at ending the Gaza conflict and fostering relations between Israel and Saudi Arabia—have steered clear of any claims to resolve the underlying issues, focusing instead on managing the current situation.
On January 20, 2025, a new president will take office in America. Will the new president heed the lessons of the past? Will they pursue realistic goals, or will they be drawn once again to chase the unattainable? Only time will reveal the answer.
THE UNFOLDING SECURITY SCANDAL
Details remain scarce regarding the security scandal involving unauthorized documents taken from the IDF Intelligence Corps. Recent updates reveal only that an Army officer (holding the rank of major) has been arrested, and the detention of the primary suspect has been extended until next Sunday. Additionally, it has been disclosed that one of the charges that by publicizing the document the suspect endangered intelligence sources.
This afternoon, reports emerged of another serious investigation related to the initial days of the current war. The latest allegations assert that war protocols were altered in the Prime Minister’s office at the start of the conflict, although specific details are currently restricted under a gag order.
ISRAEL’S AVIATION CRISIS
Meanwhile, Israel’s aviation crisis continues to deepen as foreign airlines cancel flights to and from the country almost daily. Major carriers including: American Airlines, Aegean Airlines, and Lufthansa Group have announced they will extend their suspension of flights to Israel, with Air France halting operations until November 12 and American Airlines holding off its return until at least September 2025. While security concerns are the primary reason for these cancellations, another significant factor is Israel's Aviation Services Law. This legislation requires airlines to compensate passengers cancellations, including for security-related disruptions, by covering costs for alternative flights, accommodations, and more. This stipulation places a particular strain on low-cost carriers, such as: Wizz Air, Ryanair, and EasyJet, who face considerable financial burdens from these compliance costs.
The Israel Civil Aviation Authority has proposed amendments to the law to accommodate for prolonged emergencies, such as the ongoing situation since October 7, 2023. The proposed modifications would exempt airlines from providing compensation if they can demonstrate that all possible measures were taken to avoid cancellation. Additionally, the amendment seeks to includes a retroactive exemption from compensation without the need for proof of damages, if flights are canceled due to security concerns. Another provision would limit hotel accommodations, requiring airlines to provide only up to two nights, unless further lodging is justified.
Foreign airlines, however, feel that these amendments do not adequately address the crisis’s implications. They are pushing for a broader exemption from compensation, covering the entire period of conflict from the outset. They argue that they cannot always arrange alternative flights due to limited availability, and sometimes passengers independently book costly replacements and seek high compensation from the airlines, which is financially unsustainable.
Additionally, foreign airlines are requesting government assistance for insurance coverage in Israel, similar to what Israeli airlines receive. Attorney Shirley Katzir, representing 20 foreign airlines, cautioned the Economic Affairs Committee that without regulatory adjustments for the emergency period, foreign airlines would continue to halt operations in Israel to avoid heavy financial losses and legal risks.
Without immediate adjustments to the compensation requirements, foreign airlines are unlikely to plan their summer schedules to and from Israel, worsening the aviation crisis. As a result, with no competition from foreign carriers, Israeli consumers face exorbitant prices from the Israeli airlines that now dominate the skies.
BUSINESS
Augmedics
Augmedics, based in Yokneam, which develops augmented reality (AR) systems for in-body navigation visualization during surgical operations, is currently completing a capital raising round of approximately $30 million, with the potential to grow to around $50 million. This uncertainty stems from a mutual option exercise agreement, allowing investors to increase their investment after a “call for funding” is made.
Simultaneously, Augmedics has signed a non-binding memorandum of understanding for the sale of its spinal operations to a private company, in exchange for shares in the acquiring company. The rights to the platform will remain with Augmedics, allowing it to use the platform for non-spinal applications. Augmedics was founded in 2014 by Nissim Elimelech, a biomedical engineer formerly with Medtronic, and spine surgeon Dr. Rafael Lottan. The company is now registered in the U.S. and employs around 110 people, half of whom are in marketing and sales in the U.S., and the other half in development and production in Israel.
Augmedics’s xvision system uses augmented reality glasses to project CT scan images onto the patient’s body during spinal surgeries, displaying the images directly into the surgeon’s eyes. This system provides the surgeon with “in-body vision” during the procedure without the need to glance at side monitors. The system has received FDA approval for use in the U.S. and has been utilized in over 7,000 spinal surgeries, during which approximately 40,000 screws were implanted to secure implants. The company stated that its accuracy level reaches about 99.1%, significantly improving surgical success rates, reducing pain, and lowering the need for repeat surgeries.
In January 2023, the company raised $82.5 million, led by the CPMG fund from Dallas, Texas. Total investments in the company amount to approximately $125 million (prior to the latest funding round).
Dazz
Israeli cybersecurity giant Wiz is considering acquiring fellow Israeli cybersecurity company Dazz, led by CEO Merav Bahat. Dazz, which recently raised $50 million in a round valuing it at $400 million, has seen significant sales growth, attracting multiple acquisition offers. Dazz’s platform enables unified remediation across various security tools and environments, helping clients quickly address security issues and reduce remediation time. The company, founded by former leaders from Microsoft’s Israel cloud security division, achieved a 400% ARR increase from 2023 to 2024 and has expanded its team and operations across the U.S., Europe, and Israel.
Wiz, one of the largest private cybersecurity firms globally, recently valued at $12 billion, has been expanding through strategic acquisitions, including its $350 million purchase of Gem Security earlier this year. Founded by former Microsoft executives in 2020, Wiz rapidly reached $100 million in ARR within 18 months and now reportedly surpasses $500 million in sales. The potential acquisition of Dazz would strengthen Wiz’s position in the cybersecurity market, following a previously shelved $23 billion acquisition offer from Google.
Incredibuild
The Israeli company Incredibuild, which develops technology to accelerate software development processes, is acquiring the German company Garden. Sources indicate that the acquisition price will be approximately $65 million in cash and stock. At the same time, Incredibuild has begun laying off 18 employees, about 11% of its workforce in Israel, while simultaneously recruiting staff for the acquired company’s team.
At the end of 2023, Incredibuild underwent another round of layoffs, during which dozens of employees were let go. Currently, the company employs around 150 people in Israel and worldwide, and after this process, about 130 employees will remain. Incredibuild has offices in Israel, the U.S., China, Japan, and Ukraine. To date, the company has raised $55 million, with investors including Hiro Capital, Insight Partners, and Fortissimo Capital.
Sources close to the deal stated that the layoffs are necessary for the company to align its technological capabilities and market knowledge with the new situation following the acquisition. Integrating Garden’s technology into Incredibuild’s platform will provide clients with the ability to significantly shorten development times, delivering faster, more efficient, and higher-quality products from development to production.
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A PIECE OF HISTORY
Netanyahu Meets Obama
While Netanyahu began his term on February 24, 2009, an event in the United States a month earlier would significantly impact his first eight years as Prime Minister. In January 2009, Barack Obama was sworn into office. Like many other Democrats, Obama believed that addressing the Palestinian issue was essential to solving broader problems in the Middle East. Netanyahu, however, had little interest in that approach. He viewed Iran as the single biggest threat to Israel and believed it was the primary issue that needed to be addressed.
On April 17, 2009, Obama held a town hall with students in Istanbul, Turkey. In his closing remarks, Obama stated,
But it will depend on young people like you being open to new ideas and new possibilities. And it will require young people like you never to stereotype or assume the worst about other people.
In the Muslim world, this notion that somehow everything is the fault of the Israelis lacks balance—because there are two sides to every question. That doesn’t mean that sometimes one side hasn’t done something wrong and shouldn’t be condemned. But it does mean there’s always two sides to an issue.
I say the same thing to my Jewish friends, which is you have to see the perspective of the Palestinians. Learning to stand in somebody else's shoes to see through their eyes, that's how peace begins. And it's up to you to make that happen.
On May 18, 2009, a long awaited meeting took place between President Obama and Prime Minster Netanyahu. Both American and Israeli officials had stated in advance that there would be no confrontation, and indeed, both leaders were seen smiling prior to and after the meeting.
According to Netanyahu, his private meeting with President Obama did not go well: After publicly calling for a freeze in settlement during their public meeting, Obama continued:
“Bibi,” he said, “I meant what I said. I expect you to immediately freeze all construction in the areas beyond the 1967 borders. Not one brick!
“Barack,” I said, “half of Jerusalem’s residents live beyond those lines. That alone includes almost two hundred thousand people. Do you expect us to stop building in neighborhoods like Gilo? These are integral parts of Jerusalem, like Georgetown is part of Washington.”
“That’s exactly what I mean,” he said. “Not one brick, anywhere. Gilo, too.”
This was clearly premeditated shock-and-awe.”
“Evidently Obama and his staff wanted to stun me into submission by making clear that the rules had changed. Whatever pressures past American presidents had placed on Israeli prime ministers, these would pale in comparison to the ones that would be applied to me. No more Mr. Nice Guy.”
After the meeting there was no joint statement, rather two very different sets of remarks. President Obama stated that the only solution to the Israeli-Palestinian conflict is two states for two nations. Obama also called on Israel to stop the settlement activity. Netanyahu, meanwhile, promised that if the Palestinians lived up to all of their commitments, we would eventually be able to live side by side with them.
During the meeting, Netanyahu expressed his concerns about Iran. Obama stated that the US was engaged in trying to establish dialogue with Iran to try to convince them not to build an atomic weapon. Netanyahu had hoped to hear from Obama that there would be a firm deadline for talks with Iran. Obama refused to provide a deadline, but in answering a question about how long he would talk the President stated:
The one thing we’re also aware of is the fact that the history, of least, of negotiation with Iran is that there is a lot of talk but not always action and follow-through. And that’s why it is important for us, I think, without having set an artificial deadline, to be mindful of the fact that we’re not going to have talks forever. We’re not going to create a situation in which talks become an excuse for inaction while Iran proceeds with developing a nuclear -- and deploying a nuclear weapon. That’s something, obviously, Israel is concerned about, but it’s also an issue of concern for the United States and for the international community as a whole.
President Obama stated that he would give Teheran until the end of the year to reassess the situation. He noted that stated that he would give Tehran until the end of the year to reassess the situation. He noted a connection between Iran and the Palestinian issues, suggesting that resolving the Palestinian problems could provide additional leverage in addressing the Iranian problem.
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