This morning we woke up to the tragic news that Tzeela Gez, the victim of last night’s terror attack, had succumbed to her injuries. Her infant baby, delivered via emergency caesarean section, remains in critical but stable condition. Gez, a mother of three, was en route to the hospital to give birth to her fourth child—an infant she would never have the chance to know—when a terrorist opened fire on her vehicle.
The IDF has launched a manhunt for the terrorist, but so far, the perpetrator remains at large.
IDF Chief of Staff Lt. General Eyal Zamir stated at the scene:
This is a severe and painful attack in which an Israeli civilian was killed on her way to the delivery room. I extend my deepest condolences to the family.
We are engaged in a broad campaign against terrorism in Judea and Samaria, and we will continue in that path. We will use all the tools at our disposal and reach the murderers in order to hold them accountable
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The number of terror attacks in Israel has dropped significantly over the past four months, with 561 attacks foiled during this period. This marks a dramatic decline in attempted violence, thanks to sustained intelligence and security efforts. Still, no counterterrorism effort is foolproof, and the threat of further attacks persists.
HOUTHIS
The Houthis continue their missile attacks on Israel. At 9:14 PM, we received a notification on our phones indicating a missile had been launched from Yemen. I immediately called out to Milo, who came to the door, and quickly put on his leash. Three long minutes later, the sirens began to wail, and we headed down to the shelter. Since it’s Thursday night, the streets were busy with people heading to nearby restaurants and bars, and several others joined us in our building’s shelter. As usual, we waited the designated amount of time before returning to our apartment
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FATE OF MOHAMMED SINWAR REMAINS UNKNOWN
There is still no official confirmation regarding the reported assassination of Mohammed Sinwar, brother of the late Hamas leader Yahya Sinwar. Over the past two days, the IDF has continued to target the area near the European Hospital in Gaza, aiming to disrupt any potential rescue efforts.
Reports indicate that several additional high-ranking figures may have been killed in the same strike. While optimism is growing that the operation was successful, past experience urges caution—early assessments have proven premature before.
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IDF IDENTIFIES REMAINS OF SOLDIER MISSING SINCE 1949
In a rare moment of closure, the IDF announced today that the remains of Private Arthur Gassner, who fell in battle during military operations in the Lachish region in April 1949, have been located. Gassner was found in a mass grave of soldiers in Rehovot. The discovery underscores the IDF’s ongoing commitment to locating and identifying missing soldiers, even decades after their disappearance
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Coincidentally, this afternoon I interviewed a guest for next week’s podcast who once served as an Air Force pilot in the same squadron as Ron Arad—the Israeli navigator who was captured in Lebanon during the First Lebanon War and has never been found. Arad’s memory still haunts him—a feeling made all the more poignant amid today’s continued hostage crisis.
TRUMP’S MIDEAST TRIP LEAVES ISRAEL SIDELINED
The main story, however, continues to be President Trump’s recent visit to the Middle East and the growing fallout from it here in Israel. Most observers view the trip as a diplomatic setback for Israel, with Trump appearing to make far-reaching decisions that affect Israel’s strategic standing—often with little consideration for Israeli interests.
As noted in previous Tel Aviv Diary updates, the geopolitical landscape in the region is shifting rapidly, and Israel risks being sidelined in the emerging realignment taking shape before our eyes.
It has become increasingly clear that that during President Trump’s recent visit to the Middle East, he encountered a consistent message at every stop: the war in Gaza must end. While most Israelis continue to view the conflict primarily through the lens of securing the return of the hostages, much of the Arab world remains gripped by the daily images of devastation—and particularly the suffering of children in Gaza.
Trump, by all accounts, has been deeply affected by the hostage crisis. Unlike policy matters, which he has often approached with pragmatism and flexibility, emotionally resonant stories tend to leave a lasting impact on him. The plight of the hostages appears to be one of those rare cases that has genuinely moved him.
The United States is now engaged in direct negotiations with Hamas regarding the future governance of Gaza and is advancing its own “day after” strategy. In contrast, Israel has yet to hold even a single cabinet meeting on what comes next. As a result, Washington is effectively charting Gaza’s future without Israeli input.
Though the full details remain unclear, Hamas has reportedly indicated a willingness to transfer control of Gaza to any Palestinian entity willing to assume responsibility. It is likely that the U.S. has already presented Israel with a proposal involving third-party administration as a possible pathway to end the war. Nevertheless, the Israeli government continues to hold fast to the Witkoff Plan, which does not require an immediate ceasefire. The situation remains fluid—by morning, the dynamics could change. Tune in to tomorrow’s podcast for the latest developments.
In a separate but equally consequential development, President Trump announced today that the United States and Iran are nearing a new agreement on Tehran’s nuclear program. To say the Israeli government is merely concerned would be an understatement—the contours of the emerging deal appear to fall far short of Israel’s expectations or security needs. Officials are particularly alarmed by the speed at which the negotiations have advanced.
As always, the devil is in the details. Unlike the previous nuclear agreement—which was the result of months of painstaking deliberation—this deal seems to be coming together at a troubling speed. The unsettling pace of the negotiations raises serious concerns about whether critical details and safeguards are being properly addressed.
Wizz and Air France have resumed flights to Israel, while Lufthansa has postponed its return by another week. Ryanair is not expected to resume service until the summer. American Airlines, United, and Delta have announced plans to return next week, though there is growing speculation that those plans may be delayed further.
ECONOMIC SHOCKWAVE
In a dramatic and deeply troubling development that has sent shockwaves through Israel’s economy, the Consumer Price Index (CPI) surged by a staggering 1.1% in April—shattering forecasts and marking the steepest monthly rise since July 2022. This alarming jump has pushed annual inflation to a precarious 3.6%, up sharply from March’s already worrisome 3.3%. The financial jolt threatens to derail any hope of interest rate cuts by the Bank of Israel.
Adding fuel to this economic inferno, all major food distributors across the country have announced substantial price increases in recent weeks—a troubling trend not yet reflected in the already alarming inflation figures. Economists warn this may signal a second wave of inflation, likely to drive consumer costs even higher in the months ahead.
The severity of this economic upheaval becomes even more apparent when compared to initial forecasts, which had optimistically predicted that inflation would actually fall to 3.2% in April. Instead, prices have surged across key sectors: transportation costs soared by a staggering 4.9%, culture and entertainment rose by 1.6%, clothing and fresh fruit jumped 1.5% each, and housing increased by 0.6%. Minimal relief came from a 1.0% drop in fresh vegetable prices and a 0.5% decline in furniture and household equipment—offering little comfort amid this tidal wave of price hikes.
The housing market presents a particularly grim picture. Renters are facing steep increases, with lease renewals rising by a jarring 2.7%, while new tenants are being hit with an astronomical 4.7% surge. Although housing prices rose at a slightly slower pace of 0.1% between February–March 2025 compared to January–February 2025, the year-over-year increase of 6.4% continues to push homeownership further out of reach for many Israelis—despite being lower than the 7.7% growth recorded in 2024. Even Tel Aviv’s modest 0.3% monthly price decline offers little solace in an overheated market.
April’s CPI surge nearly doubled the 0.6% increase analysts had forecast and far exceeded the 0.8% rise recorded in April 2024. Israel’s failure to implement effective cost-of-living policies—combined with recent tax measures—has driven the country’s inflation rate dangerously above that of the U.S. (2.3%) and Europe (2.2%), creating a widening economic gulf between Israel and its Western counterparts.
The Bank of Israel faces a critical decision on May 26 on interest rates, but hopes for interest rate relief have been sharply dashed. Economists now predict no cuts before the second half of 2025—and only if inflation falls back within the central bank’s target range of 1%–3%. The Bank remains deeply concerned about mounting inflationary pressures, particularly those fueled by geopolitical instability and the growing risk of escalating conflict.
With price hikes from major food distributors still looming, Israeli consumers are bracing for even more financial strain as the inflation crisis continues to unfold with potentially devastating consequences.
BUSINESS
Nebius
After years of delays, Israel has selected European cloud computing company Nebius to build its national AI supercomputer, backed by a ₪500 million ($135 million) investment that includes a ₪160 million government grant. The project, announced Wednesday by the Innovation Authority, will deploy an impressive 16,000 petaflops of computing power—double the originally required capacity—making advanced AI infrastructure accessible to startups, researchers, and public-sector innovators who typically lack access to such resources.
Led by Israeli-Russian entrepreneur Arkady Volozh, Nebius emerged from a spin-off of Russian tech giant Yandex and is now headquartered in the Netherlands with operations in Israel. The company, currently valued at around $8 billion with backing from NVIDIA and Accel, will install thousands of AI chips within existing Israeli data centers, with services expected to begin in early 2026.
This landmark project underscores the critical role of data centers in advancing AI capabilities, as they provide the massive computational infrastructure required for training and deploying sophisticated AI models. The announcement comes at a strategic time, just one day after the U.S. administration lifted chip restrictions on several countries including Israel, and amid increasing investment in Middle Eastern AI infrastructure.
By establishing this national supercomputer, Israel aims to maintain its competitive edge in the global AI race, where access to high-performance computing has become as essential as algorithmic innovation. The initiative represents a shift in how nations view computing infrastructure—not merely as technical assets, but as critical components of national technological sovereignty and economic development.
Israel Aerospace Industries
Israel Aerospace Industries (IAI) has reported a record-setting first quarter for 2025, posting a net profit of $164 million—a 21% increase over the same period last year. The company’s revenue grew 12% to $1.6 billion, while operating profit remained steady at 10% of sales. Strong performance in core sectors, particularly in drones, missile systems, and space technologies, helped fuel the results. Cash flow reached $500 million, and IAI’s cash and liquid assets now total $4.3 billion. Financial income doubled to nearly $50 million amid improved returns on reserves.
IAI’s order backlog climbed to $26.1 billion by the end of Q1, providing visibility for over four years of operations. Its Missile and Space Systems Division led sales with $727 million, while the Elta Division achieved the highest operating profit margin at 12%. While general and administrative costs rose slightly to $79 million, R&D expenses dipped from $63 million to $60 million. Ongoing geopolitical tensions, particularly between India and Pakistan—where IAI systems are in use—could impact future earnings but had no immediate effect on this quarter.
With robust demand for autonomous systems and defense technologies, IAI’s growth trajectory appears firmly on track. The company’s financial strength and high-value contracts continue to reinforce its role as a key player in Israel’s defense industry and a major global supplier of advanced aerospace systems.
Ramon.Space
Ramon.Space, a promising Israeli space-tech company, has secured the most significant agreement in its history: a $70 million contract to supply satellite communication systems to European satellite giant Eutelsat OneWeb. This landmark deal, expected to generate substantial revenue over the next three years, was negotiated during wartime conditions in Israel and represents a major validation of Ramon's innovative technology. The agreement comes at a strategic time for Ramon.Space, as it prepares to close a Series-B funding round expected to match its previous $50 million capital raise, with investors increasingly attracted to the company's position within the rapidly growing defense-tech sector and its dual-use technologies serving both civilian and military applications.
At the heart of Ramon.Space's breakthrough is its revolutionary approach to satellite data processing. While traditional satellites collect data in space but transmit it to Earth for computing, Ramon's technology enables advanced digital processing directly onboard satellites, dramatically improving efficiency and speed—a capability that has become increasingly vital in today's commercial space boom led by entrepreneurs like Elon Musk and Richard Branson.
The company's innovations are transforming the data center paradigm for space applications, potentially bringing transformative capabilities like direct-from-space 5G connectivity that could expand global coverage while reducing reliance on terrestrial infrastructure. This shift represents a fundamental evolution in satellite operations, where the computing limitations that once constrained space-based systems are giving way to intelligent, autonomous satellites capable of making decisions and processing vast amounts of data without Earth-based intervention.
eToro
After two failed attempts, Israeli-founded trading platform eToro has successfully launched its long-awaited IPO on the Nasdaq, debuting with a valuation of $4.3 billion and soaring nearly 29% on its first trading day. At one point during the session, the company’s market cap surpassed $5.5 billion, marking a strong return to public markets for a fintech firm that had postponed prior offerings due to a turbulent macro environment.
eToro had previously scrapped a SPAC deal in 2021 due to regulatory concerns and canceled IPO attempts in 2022 and April 2025 amid market downturns and geopolitical volatility. This time, a resurgent Wall Street and renewed investor confidence—buoyed by anticipated capital from the Gulf following Trump’s Middle East visit—set the stage for a successful offering.
The IPO, led by Goldman Sachs and Jefferies, with support from UBS, Citi, Bank of America, and Deutsche Bank, sold 11.9 million shares, half newly issued and half by early investors and insiders. Priced at $52 per share—above the initial range—eToro raised $300 million for corporate use, while the remainder provided liquidity for early backers. Including the “greenshoe” (or over-allotment) option, the total raised reached $712 million. The IPO’s success marks a pivotal moment for the broader tech and fintech sectors, offering a potential opening for other Israeli unicorns such as Navan, Cato Networks, Snyk, AppsFlyer, and Via, which are all eyeing the public markets.
Founded in 2007 by brothers Yoni and Ronen Assia, eToro pioneered a social trading model and later pivoted toward crypto trading. Its past regulatory issues with the U.S. SEC were resolved by late 2024, clearing the path for this IPO. Crypto has since become the company’s dominant revenue source. In 2024, eToro generated $931 million in trading commissions and $192 million in net profit, a dramatic rebound from its $215 million loss in 2022.
While crypto volume surged to $12 billion, traditional trading remained steady. The company expects 3.58 million funded accounts by the end of Q1 2025, though net profit is projected to slightly decline to $60 million due to increased investment. Notably, eToro remains headquartered in Bnei Brak, with a large portion of its employee base still in Israel—underscoring its hybrid model of global reach with a local core.
Our next stop takes us just across the road from the Israel Museum to the Givat Ram campus of the Hebrew University of Jerusalem. Givat Ram campus serves as the university’s center for the natural sciences, mathematics, computer science, and engineering. Established in the early 1950s, Givat Ram was developed to house the scientific faculties in a spacious, modern setting separate from the Mount Scopus campus, which at the time was inaccessible due to Jordanian control over East Jerusalem (1948–1967). With the city divided after the 1948 war, Hebrew University needed a new location in West Jerusalem—thus Givat Ram became a centerpiece of Israeli academic development in the young state.
While on campus, we’ll have the opportunity to visit the Edmond J. Safra Science Campus—home to several of the university’s leading science faculties and renowned research institutes, including the Racah Institute of Physics and the Institute of Chemistry. This dynamic academic environment fosters cutting-edge discoveries at the forefront of scientific innovation.
We’ll also explore the university’s Botanical Gardens – Though primarily used for research and teaching, these lush gardens are open to the public and showcase an impressive array of plant life, featuring both indigenous Israeli species and exotic flora from around the world. It's a serene and vibrant space where science and nature beautifully converge.
Next, we can visit the new National Library of Israel, inaugurated on October 29, 2023, This striking, state-of-the-art facility was designed by the renowned Swiss architectural firm Herzog & de Meuron, in collaboration with the Israeli firm Mann-Shinar. Spanning 46,000 square meters across 11 floors, the building is a masterpiece of contemporary design that thoughtfully integrates elements of tradition.
Its architecture reflects the library’s core mission: to preserve the cultural and intellectual heritage of the Jewish people while opening the doors of knowledge to the broader public. With its open spaces, natural light, and inviting atmosphere, the library serves as both a national treasure and a vibrant hub of learning and discovery that is accessible to all.
Visitors to the library are invited to explore a wealth of features designed to educate, engage and inspire. At its heart lies the expansive main reading hall, which can accommodate up to 600 readers. Flooded with natural light, this serene space encourages quiet reflection and intellectual exploration. Anchoring the hall is Micha Ullman’s evocative sculpture Letters of Light—a powerful tribute to the enduring significance of the written word.
The experience continues with an interactive visitor center, where guests can embark on an immersive “soundwalk” that brings the library’s collections and stories to life. A 480-seat auditorium and dedicated educational spaces host a vibrant calendar of cultural events, lectures, and programs for all ages. The library also houses a synagogue and prayer spaces for other faiths, reflecting its inclusive vision and its role as a meeting place for people of diverse backgrounds and beliefs.
