DAY 408 OF THE WAR: Three Soldiers Die in Gaza, Three Detained For Firing Flares, Gag Order Lifted in Document Case, Israel’s Defense Budget
Tel Aviv Diary, November 17, 2024
Today was another tragic day in Gaza. This morning, it was announced that Sergeant First Class (res.) Idan Kenan (21), from Ramat Gan, lost his life in Beit Lahiya due to a sniper attack. Later in the evening, reports emerged that Captain Yogev Pazy (22) of Givat Bar, and Staff Sergeant Noam Eitan (21) from Hadera were also killed in northern Gaza, specifically in Beit Lahiya. A Hamas operative ambushed them upon entering a building
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While every loss is profoundly tragic, the death of Captain Yogev Pazy is especially heartbreaking. Pazy is the son of former Chief of Staff Gadi Eizenkot’s sister-in-law. Eizenkot has now endured the unimaginable pain of losing a son and two nephews in this conflict. To date, we have lost 27 soldiers since the operations began in Northern Gaza two months ago.
Amidst the unbearably heavy toll, the IDF continues to effectively strike Hamas, eliminating hundreds of their fighters in the area. However, Hamas appears capable of quickly replenishing their ranks with new recruits to replace those lost. Public sentiment reflects the exhaustion and the strong desire for resolution: 70% of Israelis support ending the war in Gaza in exchange for the return of the hostages, while 20% are opposed, and 10% remain undecided. I fear, however, that no one is truly listening.
LEBANON AND IRAQ
Meanwhile, in the North, Israel has continued waves of attacks on Southern Beirut. Today, Israeli forces also targeted offices in a separate portion of Beirut, killing Mohammed Afif, Hezbollah’s Media Chief and his deputy. The focus now turns to Lebanon—or essentially Hezbollah, given their control over the government—as we await their response to the proposed agreement. Rocket fire from Lebanon continued today, albeit at a lower pace than yesterday.
This morning, the Israeli Air Force intercepted a drone that had infiltrated from Iraq and managed to travel across Israel as far as Yavne.
Tonight, there were reports that Hezbollah has accepted the Israeli-American proposal for a ceasefire. However, as always, “the devil is in the details.”
Three Detained for Firing Flares Near Netanyahu Residence
Three individuals, including a Brigadier General in the reserves, have been arrested for allegedly “firing at Netanyahu’s house” in Caesarea, and are currently being held without access to legal counsel. However, the circumstances of the incident appear to differ from initial police claims. It was reported that the accused fired two flares into the air from the beach. These flares are designed to descend slowly, typically extinguishing before reaching the ground. Unfortunately, one flare's parachute malfunctioned, causing it to land still ignited near Netanyahu's residence—although neither Netanyahu, nor his family were present at the time. Despite the undeniable recklessness of the act, some on the right-wing have portrayed the incident as an assassination attempt, influenced by criticism of Netanyahu from families of hostages and others.
DOCUMENTS CASE
Today, the lifting of a gag order involving classified documents has unveiled new details. In early September, shortly after six hostages were shot and killed by Hamas, a soldier from the IDF intelligence division discovered a classified document he believed should be brought to the Prime Minister's attention. Instead of following official protocols, the soldier reached out to Eli Feldstein, a staffer in the Prime Minister's office, through social media, attempting to share the document. The document indicated that Yahya Sinwar opposed a hostage deal and sought to exploit divisions in Israeli society by inciting protests among hostage family supporters. The soldier eventually succeeded in transmitting the information to Feldstein, who subsequently leaked portions of the document to the Israeli press.
While the army censor blocked publication of the classified information, Feldstein circumvented these restrictions by passing the classified document to Bild and other German publications—allowing Israeli media to report on the document based on foreign sources. When Israeli outlets questioned the document’s origins, Feldstein met with the intelligence soldier and retrieved the original top-secret report, which he showed to several people. Reportedly, Feldstein's intention in having the document released was to mitigate public pressure on the government to secure the release of the hostages.
It is important to note that the publication of this highly classified document not only undermined public trust but also compromised a critical intelligence source. This reckless act has sparked significant controversy, raising serious concerns about the misuse of sensitive information to manipulate public opinion for political gain.
ULTRA-ORTHODOX & THE MILITARY DRAFT
Today, the Army began issuing the first thousand of 7,000 draft notices to members of the ultra-Orthodox community. This decision was approved by the recently ousted Defense Minister Gallant. Although the new Defense Minister was hesitant to proceed, he acknowledged that he lacked the legal authority to stop their distribution.
In response, ultra-Orthodox rabbis have directed their students to disregard the draft notices. Protests against the action have already begun, with ultra-Orthodox students demonstrating their opposition.
THE DEFENSE BUDGET— PART I
This morning, Sharon Kidon conducted a fascinating interview on Ynet's daily podcast, focusing on the Defense budget with Brigadier General (Res.) Re’em Aminoach, former head of the IDF budget department. This is a very important topic. It is a lengthy interview (conducted in Hebrew), so I will present the conversation in three parts. Here’s the first segment:
Sharon Kidon with Brigadier General (Res.) Re’em Aminoach:
For years, discussions around the defense budget have been contentious and clouded by misperceptions. Some contend that the security apparatus is consistently underfunding a claim underscored by the events of October 2023—which many view as highlighting the insufficiency of previous budgets to address genuine security threats. Until October, there was a widespread belief among the public that the defense budget could be trimmed to prioritize other sectors, as Israel appeared strong and secure. However, the harsh realities of the recent conflict have challenged this misconception.
Critics assert that the public’s lack of understanding of Israel’s threats facing Israel results in inadequate funding for defense. For instance, had citizens fully grasped the variety and scale of missile threats posed by adversaries like Iran, there might have been broader public support for increasing the defense budget. Instead, the defense establishment frequently faces challenges in securing sufficient funding. Contrary to the perception that defense funding is easily obtained when threats are presented to the Finance Ministry, acquiring these funds is far from easy.
An illustration of these challenges can be traced back to the social protests of 2011, which led prompted the formation of the Trajtenberg Committee. At that time, the government sought to reallocate funds to address public demands, proposing a NIS 3 billion reduction to the defense budget. Such a cut would have compelled the military to slash essential resources, such as reserves and operational readiness. Following intense negotiations, the defense budget was partially restored, yet even those reinstated allocations represented merely the bare minimum necessary for maintaining security.
Fast forward to today … Finance Minister Bezalel Smotrich declared, even before the war, that he would not simply rubber-stamp the budget. Smotrich decided to establish a public committee, known as the Nagel Committee, to evaluate the defense budget, and publish interim findings along the way.
How effective can such a committee be in determining the appropriate defense budget? Let’s clarify. To date, there have been two major committees: the Brodet Committee and the Locker Committee. Without the events of October, another committee likely would not have been formed. The existence of this new committee is directly attributable to the incidents that occurred in October.
Do we even fully understand what happened in October 2023? Only partially. There has been no official inquiry—no investigation, no findings, no conclusions. Yet, without a thorough examination of the lessons, we are already establishing a committee to set the budget based on insights that are not yet formed.
This approach seems backward. One must ask: how can this committee function effectively? Consider the composition of the committee: it includes some of Israel's finest economists, highly skilled professionals. However, economists are experts in assessing the state’s financial capacity—determining what the country can afford, how other ministries are funded, and how resources should be allocated.
However, if the objective is to ascertain what the military truly needs, starting from the ground up—by assessing threats and figuring out how to respond to them—then ideally, this committee should be comprised of generals. The expertise required here is different and distinct. Yet, generals are often predisposed to prioritize military needs, whereas the focus this time was intended to be economic. I’m not entirely convinced of this approach. There have been instances where generals have proposed very limited, and sometimes even unreasonable, budgets.
Regarding the current war, are we able to estimate its direct and indirect costs? Yes, I estimate the direct costs so far to be around 150 billion shekels—an enormous sum. Then there are indirect costs. For instance, the future expenses associated with supporting disabled veterans and bereaved families are projected to exceed 100 billion shekels in today's value. That means the total direct cost of the war is 150 billion, but the cost of supporting families and disabled veterans alone will surpass 100 billion. If this were a public company, the war’s expenses and future liabilities would already be accounted for. However, since we are a state, we only record these costs when they are actually incurred.
Ultimately, the combined direct and indirect costs of the war, just for defense, will exceed 300 billion shekels.
ATARIM SQUARE
In the 1960s, the Tel Aviv municipality devised plans to develop the city’s northern beaches, construct modern hotels, and establish a tourist center linking them to Ben-Gurion Boulevard. Architect Yaakov Rechter designed the multi-purpose structure that utilized the varying elevations of the beach.
Construction began in 1971. The lower level included a parking lot and gas station, while the upper levels have covered highways, indoor shops, and a glass-coated square with restaurants, an amphitheater, and a rotunda. A northern building houses the Marina Hotel and shops.
Atarim Square, which opened in 1975, was initially bustling with shops and restaurants. However, by the late 1970s, it had fallen under the influence of criminal elements and began to decline. In 1982, the Colosseum nightclub opened and operated until the late 1990s. Despite numerous objections and appeals, the Tel Aviv Local Planning and Construction Committee approved the JTLV1 fund’s Atarim Square Towers project in 2019. This project entails demolishing the existing complex to create direct access to Ben Gurion Boulevard and constructing two 25-story towers with 220 apartments, commercial spaces, and 300 hotel rooms. The complex would also include a six-story building and 4,800 square meters of public space at the marina level.
The “No Towers in Atarim Square” association plans to contest the project proposal in the District Appeals Committee, expressing concern about the impact of the towers on public spaces and the removal of the elevated passageway on Hayarkon Street. Meanwhile, the Tel Aviv Municipality defends the Tower project, asserting it will revitalize the square and create high-quality public spaces that will benefit the city’s coastline and its residents.
Atarim Square is situated between the Herod Hotel and the Carlton, at the terminus of Ben-Gurion Boulevard.
ECONOMY
Prime Minister Netanyahu’s economic advisor recently convened a critical meeting with representatives from various government agencies to address legislation proposed by Otzma Yehudit. The proposed law aims to counter foreign sanctions (primarily from the United States), which targeted far-right activists and businesses linked to settlements. These sanctions, (affecting around 20 accounts, include those of Bentzi Gopstein, a close ally of Otzma Yehudit leader Itamar Ben-Gvir), have ignited this legislative push.
The banking sector finds itself at the center of this controversy. Israeli banks, deeply tied to the global SWIFT system, argue they must comply with U.S. and European sanctions or face potentially catastrophic consequences. In contrast, right-wing factions claim these institutions are excessively strict in their interpretation of the regulations. Diplomatic efforts led by Minister Ron Dermer yielded some concessions, with the U.S. providing clearer guidelines that allow basic financial services while restricting activities that could pose risks like money laundering.
Otzma Yehudit has framed its proposed amendments to the Banking Service to Customers Law as a defense against what they call a dangerous precedent. They warn that these sanctions could pave the way for future restrictions targeting Israel’s security forces. The legislation seeks to redefine “unreasonable refusal” to include instances where financial services are denied due to foreign political sanctions unrelated to criminal concerns.
Regulatory and financial authorities have sounded alarm bells over the proposal. The Bank of Israel and the Anti-Money Laundering Authority warn of grave risks to Israel’s international financial relationships, including potential disconnection from SWIFT, disruptions to trade, and undermining global efforts to combat terror financing. Despite these dire warnings and a brief delay, the legislation is still active and awaiting discussion by the Ministerial Committee.
BUSINESS
Significant and rapid funding for Israeli entrepreneur Guy Podjarny: Tessl, the company Podjarny founded in London just a few months ago, announced Thursday that it has secured $125 million in funding. This includes $25 million in a Seed-round in April and an additional $100 million in a recent Series-A round.
Despite being a young company with a product set to launch only next year, Tessl’s valuation has already reached $750 million, according to Fortune. Podjarny, the CEO, is one of the 8,200 alumni of the cybersecurity company Snyk.
Tessl has developed a platform that enables the creation and maintenance of software code using artificial intelligence. The platform allows developer teams, as well as individuals without programming knowledge, such as product managers, to provide instructions and detailed specifications to Tessl’s system, which then generates software code accordingly.
The company’s investors include Index Ventures, Accel, GV, and Boldstart. Podjarny shared that the concept for Tessl emerged from his experience at Snyk, whose product identifies security vulnerabilities in code. Tessl currently employs 21 individuals.
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A PIECE OF HISTORY
Gilad Shalit Exchange
On October 20, 2011, Israel reached an agreement to secure the release of Gilad Shalit, who was held captive by Hamas since June 2006 after militants tunneled into Israeli territory and attacked an army outpost. Shalit’s plight became a rallying cry across Israel. His five years in captivity, held incommunicado without Red Cross visits, sparked widespread fear that his fate might mirror that of Ron Arad, an Israeli airman captured in Lebanon decades earlier and presumed dead after failed negotiations.
The deal to release Shalit entailed a controversial prisoner exchange: over 1,000 Palestinian prisoners, many of whom were serving life sentences for lethal attacks on Israelis, were freed. Among them was Yahya Sinwar, who, upon his release, vowed to secure the release of the remaining prisoners still incarcerated. The Israeli Cabinet approved the agreement by an overwhelming majority of 26-3. Prime Minister Benjamin Netanyahu described the decision as “difficult but necessary,” emphasizing the unique mutual responsibility among Israelis and the Jewish imperative of redeeming captives. Netanyahu’s leadership, supported by Shin Bet, Mossad, and military officials, highlighted the strategic calculations of seizing a fleeting window of opportunity amid regional instability.
On October 18, 2011, 477 Palestinian prisoners were freed in the first phase, with Hamas transferring Shalit to Egyptian mediators before he crossed into Israel. Thin and dazed, Shalit was greeted as a national hero. The public outpouring of relief and celebration contrasted with concerns voiced by terror victims’ families and critics who feared the release of convicted terrorists would embolden future attacks. Nevertheless, Netanyahu framed the exchange as a balance between Israel’s commitment to Shalit, and its broader security needs
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The timing of the deal reflected shifting geopolitical realities. The Arab Spring had unsettled regional dynamics, with Egypt’s new post-Mubarak government eager to play a mediating role. For Hamas, the agreement provided an opportunity to counter the growing popularity of its rival, the Palestinian Authority, following the latter’s bid for statehood at the United Nations. The swap also bolstered Hamas’s image as a defender of Palestinian prisoners and a force capable of challenging Israel directly.
The streets of Gaza erupted in celebration, with Hamas hailing the exchange as a major victory. In Israel, while most citizens supported the deal, it sparked intense debate about the ethics and risks of such negotiations. The release of Shalit also had the effect of quieting the Social Justice movement, as the attention of the country moved from the protests to the Shalit deal.
Today’s Zoom Briefing
The IDF cannot eliminate every Hamasnik in Gaza. It's physically impossible. Hamas is recruiting new foot-soldiers every day. Even if it were technically possible, it could not be done without killing and/or maiming hundreds of thousands of non-combatants. That would be a war crime which the world will not accept (and Israelis shouldn't accept it, either).