Israel Week Ending May 28th

Israel Fails to Establish Deterrence With Hamas. Will Naftali Bennet Become Prime Minister Next Week?

It has been one week since the end of our last entanglement with Gaza. Additional assessments have been made as to the successes and failures of this most recent engagement. It’s becoming clear that the IDF did very well tactically, but strategically, the encounter was a failure for Israel on several levels. 

Israel defeated every Hamas attempt to tilt the battle in their direction, downing their small RPV fleet, destroying their remote submarine, and of course, stopping any land incursion. Iron Dome performed up to expectation and downed over 90% of the incoming missiles— despite very large barrages designed to overwhelm the system. The damage done by all the rockets was minimal, and while every life is precious, the loss of life on the Israeli side remained very low. 

Nearly no mistakes were made during Israeli attacks on Hamas in Gaza — i.e. no strikes that accidentally hit a school, a hospital, or a similar location. Regrettably, there were a significant number of civilian casualties, but that number was less than 10% of those who died during the 2014 engagement. It also must be noted that 600 of Hamas’ missiles misfired and landed in the Gaza Strip. The number of resulting casualties is unknown, but that accounts for a not inconsequential percentage of the deaths and injuries in Gaza.

However, the IDF did not destroy all that many rockets, and Hamas still has a large arsenal. It also did not succeed in killing a large number of Hamas fighters or commanders. More importantly, the war brought the Palestinian issue back to the forefront of world consciousness. Moreover, Hamas successfully interjected themselves into the question of Jerusalem and the Temple Mount. 

This translates into the fact that the war failed to establish a new paradigm of deterrence by Israel against Hamas. Just the opposite, Chief of Staff Aviv Kochavi has already ordered the army to prepare for the possibility of a resumption of combat. There is a fear that a crisis might be just around the corner; as the United States and Israel demand the funds for rebuilding Gaza do not go through Hamas. In addition, Israel’s insistence upon the return of the remains of two soldiers killed in 2014, as well as, the two mentally disturbed Israelis who wandered into Gaza, could make the next few weeks dicey.

Events in Gaza brought Secretary of State Blinken on a visit to Israel and surrounding areas. The trip was primarily a political visit to show that the Biden Administration was not ignoring the conflict (something it would have preferred). Blinken met with Netanyahu, Ashkenazi, Gantz, and Lapid. He also visited the Palestinian Authority in Ramallah, then went on to Cairo and Amman. Blinken disclosed the allocation of some aid for the Palestinian Authority; while stating that any assistance to rebuild Gaza would have to go through the Authority. How that would work looks pretty unclear. 

Blinken also announced the reopening of the US Consulate in Jerusalem to handle relations with the Palestinians, after its closure by the Trump Administration. While the current Israeli government officially opposes the move, it can do little harm. The Israeli government has suddenly realized that if it does not want the entire West Bank to fall to Hamas, it needs to strengthen the Palestinian Authority. After spending the last few years weakening the Authority, it will require an about-face to change that policy. The US, however, can give cover for that change.

The level of venom directed at Israel during this conflict was unprecedented. Since the Six-Day War, a fringe on the left side of the Democratic Party has been very anti-Israel. That fringe has grown, and with the election of Rashida Tliab to Congress, these sentiments have become a vigorous voice in a part of the Democratic Party — which together with the success of attaching Palestinian rights to intersectionality, have created a powerful, albeit totally ignorant wave against Israel in the American left. Their slogans, “From the river to the sea” and articles by people like Peter Beinart call for the return of all Palestinian refugees will only dim the already low chances of reaching a peace agreement during my lifetime. 

Here are three articles on this matter worth reading: 

Israel's Problems are Not Like America

The New Furies of the Oldest Hatred

And finally, Tzipi Livni’s article, printed in the New York Times today: There is a Solution to the Israeli-Palestinian Conflict

The result of this identification with the Palestinian cause has unleashed an unprecedented rise in antisemitism. After four years of the Trump Administration, where we saw antisemitism swell within the far right, now we see rampant antisemitism from the far left. Of Course, all of this underscores the reason why the State of Israel was established, and should give pause to those, (including me most often), who have said America is different.

POLITICS

All those who care about politics in Israel continue to hold their breath this weekend, waiting for Naftali Bennett to finally make a decision. Yair Lapid has spent the last week negotiating with the different parties in the Bloc for Change to hammer out a coalition agreement. Under the agreed-upon terms, Avigdor Lieberman would become Finance Minister, Meirav Michaeli Minister of Transportation and Infrastructure, Omar bar Lev Homeland Security Minister, Nitsan Hurwitz Health Minister, Tamar Zandberg Minister of Environmental Affairs. Gideon Saar would become Justice Minister and Yifat Shasha-Biton Education Minister. Benny Gantz would remain Defense Minister, with Yair Lapid as Foreign Minister.

Meanwhile, Ayelet Shaked would become Minister of Interior, if Bennett agrees to become Prime Minister. It’s an absurd situation, in which the country is waiting to see if Bennett is willing to become Prime Minister, in order to topple Netanyahu. But this is where we are. 

Bennett, with only six seats, just has to say yes. His actions these past few weeks have certainly not endeared him to anyone, on either side of the spectrum, as he has zig-zagged between declaring “a change government is out of the question,” to insisting “a 5th election is out of the question”. It’s undoubtedly time for serious election and governmental reform in Israel.

COVID—19

Regarding COVID—19, the main question in Israel has turned to whether or not we have reached herd immunity. To attain herd immunity, it was thought we needed to reach 80% of the population either inoculated or recovered from COVID, and Israel is currently at 65%. However, the number of new cases remains incredibly low, (20-30 per day) — many of which were discovered in people from abroad. 

Today, the only COVID restriction that remains is an indoor mask-wearing requirement, something the majority of the population ignores. The Health Ministry postulates that many children contracted the virus, but were asymptomatic, and thus the nationwide rate of immunity is higher than reported. A serological survey will be conducted this coming week to test that theory. Except for making it difficult to get in and out of the country, for most people in Israel, COVID seems like a distant memory.

BUSINESS

Israeli companies continue to raise money at a mind-blowing rate. Here’s a partial list, from this past week alone:

• Neuroscience startup, CorrActions, completed a $2.7 million round;

• Gifting platform, Snappy, raised $70 million;

• Salt Security raised $70 million;

• Laguna Health raised $6.6 million, for post-hospital recovery;

• Lightrun raised $23 million;

• Wiz, the cloud security firm, raised $120 million from Salesforce and Blackstone (which just opened its new Israeli office).

Meanwhile, Elbit Systems, Israel’s largest defense contractor, had another excellent quarter: Elbit revenues for the first quarter of 2021 were $1,118.3 million, compared to $1,071.2 million in the first quarter of 2020.

Non-GAAP(*) gross profit amounted to $286.2 million (25.6% of revenues) in the first quarter of 2021, compared to $295.4 million (27.6% of revenues) in the first quarter of 2020. GAAP gross profit in the first quarter of 2021 was $281.3 million (25.2% of revenues) compared to $289.4 million (27.0% of revenues) in the first quarter of 2020.

Most interesting, Elbit CEO Bezhalel (Butzi) Machli told analysts that the company was in advanced R&D with Israel’s Ministry of Defense, for a deployable laser system to destroy all types of incoming rockets, missiles, mortars, and aircraft. Machli said the product should be ready in 3-4 years.