Israel Demands Gulf States Fund Reconstruction and Pay Compensation to Israelis
NYN | Reports and analyses
Official Israeli data has revealed that the value of property damage caused by Iranian missile strikes has exceeded $2.6 billion so far — not including losses incurred during the final hours of the war or unsubmitted claims still being processed.
According to the Hebrew-language business daily Calcalist, the Israeli Tax Authority reported that around 39,000 property damage claims have been filed. More than 11,000 civilians were evacuated from their homes and relocated to hotels at the government’s expense. Estimates suggest that the total number of compensation claims may ultimately exceed 45,000 cases.
The paper noted that these damages are “the highest ever recorded over such a short period,” with Israel incurring in just 12 days double the financial losses it sustained during the entire Gaza war, which at the time totaled 2.6 billion shekels.
The Israeli Tax Authority now expects property and real estate compensation alone to exceed 5 billion shekels. Meanwhile, the Ministry of Finance has announced a parallel compensation plan for affected businesses, at an additional cost of around 4 billion shekels. This brings the total compensation bill to 9 billion shekels (approximately $2.6 billion), effectively exhausting the entire compensation fund available until June 2025.
Warnings of Cash Shortages — and an Empty Fund for Future Crises
The Hebrew newspaper warned that this full depletion of Israel’s compensation fund means that any future escalation — whether from Iran or other fronts — may be financially unmanageable for the Israeli government. This could lead to a domestic financial crisis or the urgent need for external aid.
In this context, Israeli Finance Minister Bezalel Smotrich made a provocative statement, calling on Gulf states to bear part of the cost of the war and the damages inflicted on Israel. His tone was politically charged and surprising, raising questions about the nature of such a request — is it part of undisclosed understandings, or a public pressure tactic aimed at countries with economic and security normalization agreements with Israel?
Damage Unprecedented in Israeli History
Shai Aharonovitch, head of the Israeli Tax Authority, described the situation as “unprecedented,” saying: “We have never witnessed such extensive damage in such a short period in Israel.”
According to the report, 30 buildings have so far been marked for complete demolition, while damage assessments for the city of Be’er Sheva — which came under attack on the last day of the bombardment — have not yet been completed.
The War Isn’t Over — and the Shock Continues
Observers believe that the current economic cost is only the tip of the iceberg. The military, psychological, and public relations losses that Israel has suffered in this round with Iran could take years to recover from. Public confidence in the country’s internal defense systems has been shaken, and pressure is mounting on the government over compensation and fiscal deficits.
