Israel Update Week Ending January 21

Arrow 3 Test,Israeli Police Use Pegasus Software,Covid-19 Rampart,Netanyahu Plea Deal and much more.

DEFENSE & MILITARY

This week, the Israel Ministry of Defense, together with the American Defense Department, conducted the most comprehensive assessment of the Chetz anti-missile system, to date. The test simulated a ballistic missile carrying an unconventional warhead. The incoming missile was successfully destroyed. As a result, Arrow-3 is now considered operational by the Israeli Air Force, thus giving Israel true multi-layered defense against incoming missiles. 

I have always been a firm believer in active missile defense, as opposed to relying on second-strike capability to deter an enemy. A religious fanatic might be willing to sacrifice millions of their own people to destroy the “Zionist enemy.” However, that same fanatic will be less inclined to attempt an attack if the chances of success are only 5-10%, with 100% certainty of sacrificing his own population.

In related news, Israel signed a final contract to purchase three advanced non-nuclear submarines from Germany. Controversy surrounding the acquisition of these subs is part of the criminal case, in which former navy officers were charged with accepting bribes. Questions have also been raised about former Prime Minister Netanyahu's role in authorization of this large order. 

Netanyahu pushed Israel to sign an MOU to purchase the subs quickly, since the offered price was EU 600 million. It turns out that the final price is EU 1 billion per sub, i.e., substantially higher. Since the details of the submarine deal remain secret, it’s hard to know if the price increase is in any way justified, or caused by the fact that at this point, Israel has no choice. The German government will subsidize the submarine sale, in the sum of 600 million Euros. The subs will be built over the next nine years and are designated to replace existing submarines in Israel’s fleet.

The Israeli Air Force and the US Air Force participated in a Joint Exercise at the Israeli Air Base Uvda. The exercise named “Desert Falcon” saw the IAF’s 112nd, 199th, and 115th squadrons flying together with the USAF 55th fighter squadron.

On a somber note, there was another accident in the IDF this week. Thankfully, this time, no one was killed. However, two soldiers from the Duvdevan unit were wounded, when an explosive detonated unexpectedly.

POLICE

A scandal broke this week, when it was discovered the Israeli police have been using NSO’s Pegasus software to spy on Israeli citizens, in Israel. At first, the police denied allegations of any wrongdoing, and went on to say that its usage of Pegasus was all done under the umbrella of a court order. However, then it came out the Police had used the program not only against criminals (for which there is no applicable Israeli law that would allow usage of such an intrusive tool), but also against social activists. 

On Thursday, Israeli press reported that by using Pegasus, Police learned that one of the social activists, who was married, had used Grinder to meet other men. So, the police filed away that information to potentially use against the activist, if needed, at a later date.  

While what the police have done seems illegal, its actions need to be put into context — not to defend their conduct, but to understand it. First, every technology ever developed has been used in some ways it should not. The reasons why Pegasus was ever purchased for the Police is a question that must be answered. Nevertheless, it was irrefutably too easy to use once they had it. 

However, the problem is much worse. In a dispute related to accessing of suspects’ phones in the case of witness intimidation regarding the Netanyahu trial, the Israeli Supreme Court found the search of those phones to be illegal. Yet, incomprehensibly, the Police were still permitted to use the evidence gained from those phones. In other words, unlike America, Israeli criminal law has no such doctrine as “the fruit of poisonous tree.” Subsequently, it does not appear to matter how evidence is obtained. 

On Thursday night, Israel’s Attorney General announced he would create a special panel to investigate Police use of Pegasus.

THE STATE VS. NETANYAHU

For much of the past week, the discussion in Israel focused on whether a plea agreement will be reached between Netanyahu and the state, before the current Attorney General’s term ends at the end of the month. For a few days, it looked likely that a deal would be signed. My view on the potential agreement can be seen in my verbal joust with the President of the Likud court on ILTV News.

However, by the end of the week, reaching an agreement before the end of the month seemed very unlikely. 

As part of the agreement, the Prosecution has demanded that Former Prime Minister Netanyahu accept an “Oht Kalon” (stamp of moral turpitude), a designation that gets assigned to serious crimes — which would ban Netanyahu from holding any public office for seven years. More importantly, as part of the plea agreement, the Prosecution demanded Netanyahu admit to his crimes, and thereby, end the four-year fake news story alleging that the cases against him were all a setup. Despite Netanyahu’s paramount interest of ensuring he stays out of prison, it’s not clear that he is willing to agree to these conditions — at least at the moment— but at some point he will agree to a deal, as the strength of the cases against him become clear.

FOREIGN AFFAIRS

On Thursday, Foreign Minister Yair Lapid spoke with Turkish Foreign Minister Mevlüt Çavuşoğlu. This was the first direct discussion between an Israeli official and a Turkish Foreign Minister in 13 years. The Turkish Minister initiated the call, stating in advance he wanted to wish Lapid a speedy recovery from Covid-19 (which Lapid contracted last week). Several days earlier, Turkish Present Erodwan called President Herzog to offer his condolences on the death of Herzog’s Mother. It was reported that during the call, the Turkish President invited Herzog to visit Turkey. 

On Thursday night, Prime Minister Naftali Bennett spoke via phone with Crown Prince of Abu Dhabi, Mohamed Bin Zayed, about the recent drone attack by Iranian-supported Houthi Rebels. Bennett pledged Israeli assistance, if Abu Dhabi needed.

COVID–19

It’s unclear where we stand at the moment regarding Covid-19. Over the past week, 400,000 Israelis received positive results for Covid-19, either with PCR, or official Antigen tests. It is assumed that close to that number have taken home tests, and chose not to report. That means close to 10% of the population has been infected in the past week. 

As of today, Israel has 4,555 hospitalized Covid patients, of which, 638 are considered in serious/critical condition. While this outbreak undoubtedly pushes hospitals here to the brink, on a percentage basis, the current number of hospitalized patients remains 10x lower than what would have been expected (per number of infections) during previous Covid waves.

In contrast to previous waves, in which I did not know many people who contracted Covid, this time I know many. After infecting a number of cabinet ministers, and members of the Knesset last week, this morning Defense Minister Gantz announced he tested positive for Covid-19, as well.

There are initial signs that the daily Covid infection numbers have peaked. The long lines at the testing centers in Tel Aviv are gone. Yesterday evening, the government announced that starting in one week, isolation of all children exposed to Covid-19 in school will end. Instead, every child will undergo an Antigen test twice a week, and those found to have been infected will be sent to quarantine. The government has distributed three free Covid tests to every home with school-aged children. Not sure this makes much sense, if the idea is to isolate the disease. However, the goal seems to be to return to normal, as much as possible. Hopefully, it will work.

ECONOMY

The government approved $100 million in aid to El Al. $85 million will be in the form of a three-year, no-interest loan that can convert to stock, along with $15 million in aid for excess fuel costs, and the costs of maintaining Israeli anti-rocket systems installed on El Al planes.

Israeli cyber security companies raised $8.8 billion in 2021. This created 11 unicorns (private companies valued at over $1 billion) in the security field. Total exports in cybersecurity came to $11 billion last year.

Eureka, a cybersecurity start-up that claims to have developed a game changing security solution for the cloud has raised $8 million in seed funding from YL Ventures.

Anonybit, announced the closing of a $3.5 million funding round. The financing was led by San Francisco-based, Switch Ventures. Other participants included: NextGen Venture Partners, Industry Ventures, Preceptor Capital, and several strategic angel investors.

The new funding will enable Anonybit to accelerate its work with embedded partners and enterprises, in support of the growing need for greater data protection, and enhanced digital security; a direct response to the growing threat landscape. Anonybit has developed a breakthrough decentralized biometrics infrastructure that addresses a long-standing market need for improved management of personal data and digital assets across a wide range of use cases.