Israelis are again waking up in the middle of the night to the sound of air raid sirens and running to safe rooms and shelters. Thousands have been injured or displaced in missile attacks. Tens of thousands have left their homes and jobs to do even more army reserve duty. Schools are closed. Many people are stranded abroad because regular airline service to Israel has been suspended.
Yet, nearly a week into the Iran war, the mood in Israel is upbeat, in contrast to the one prevailing in the United States and the Persian Gulf countries—the latter of which have also been pummeled by Iranian missiles and drones. One poll published on March 4 showed that more than 80 percent of Israelis backed the attack on Iran. Media coverage has been unabashedly pro-war. In contrast to the rest of the world’s stock markets, the Tel Aviv Stock Exchange rallied in the first days of the conflict. The shekel has strengthened against the dollar. If the war goes well, it is not hard to imagine Prime Minister Benjamin Netanyahu, whose coalition has been trailing in the polls for years, coasting to a win in the general election later this year.
Israelis are again waking up in the middle of the night to the sound of air raid sirens and running to safe rooms and shelters. Thousands have been injured or displaced in missile attacks. Tens of thousands have left their homes and jobs to do even more army reserve duty. Schools are closed. Many people are stranded abroad because regular airline service to Israel has been suspended.
Yet, nearly a week into the Iran war, the mood in Israel is upbeat, in contrast to the one prevailing in the United States and the Persian Gulf countries—the latter of which have also been pummeled by Iranian missiles and drones. One poll published on March 4 showed that more than 80 percent of Israelis backed the attack on Iran. Media coverage has been unabashedly pro-war. In contrast to the rest of the world’s stock markets, the Tel Aviv Stock Exchange rallied in the first days of the conflict. The shekel has strengthened against the dollar. If the war goes well, it is not hard to imagine Prime Minister Benjamin Netanyahu, whose coalition has been trailing in the polls for years, coasting to a win in the general election later this year.
One reason, of course, is that Israelis are used to missile wars, most recently enduring nearly two years of attacks coming variously from Hamas, Hezbollah, Iran, and the Houthis. Adults have become inured to regular visits to safe rooms, and even children have come to see it as an ordinary part of life. Within a few days of the war, Tel Aviv cafes were filled again with patrons. Constant air raid alerts aren’t going to turn public opinion against the war.
But the deeper reason has to do with the consensus among Israelis that the assault against Iran is going well and that the war will be relatively short and that Israel will emerge as a winner. The loss of life and material damage will be contained, and whatever disruptions the war is causing will be fleeting. In the end, something like a New Middle East may emerge, or at least the same old Middle East without the threat of Iran hanging over it, which from Israel’s perspective, would be an improvement.
The question is whether Israelis are being overly optimistic, because if they are, the country is destined for some tough times ahead. A small country and economy, heavily reliant on reservists to fill the army’s ranks, Israel has traditionally preferred short, decisive wars. Today, its population and economy are large enough to sustain slightly longer conflicts than in the past, but Israel is still recovering from a grinding two-year war in Gaza and has remained on a war footing even after the cease-fire in October.
A short campaign, on the scale of the 12-day war that Israel (later joined by the United States) fought with Iran in June 2025, would almost certainly be manageable. After launching a large barrage of missiles and drones at Israel in the first two days of the war, Iranian attacks have declined sharply, and their targeting and timing appear to be scattershot. This could be because Iran is increasingly incapable of mounting coordinated attacks and/or because it is depleting its stock of missiles and launchers.
But it’s also possible that Iran is holding its bigger and more lethal missiles in reserve as part of an attrition strategy. It seems increasingly clear that Iran believes that a steady drip, drip of missiles, drones, and casualties—combined with economic paralysis and soaring oil prices—will compel Israel and the United States to end the war on something close to its terms. And that is the scenario that an unnamed Israeli defense official spoke of on Sunday: “Trump spoke about four weeks. We are also preparing for at least a month.”
In that case, the most immediate threat to Israel is that its air defense system will begin to run short on interceptors. The government doesn’t reveal information on stockpiles or rates of production, but it seems improbable that Netanyahu was lobbying the White House to start a war with Israel unprepared.
On the other hand, media reports (denied at the time by Israel) during the final days of the June 2025 war cited U.S. officials as saying Israeli interceptor stockpiles were becoming dangerously depleted. Israeli arms makers have ramped up production over the past two years, but manufacturing interceptors is slow and expensive, and hardly eight months have passed since the last missile war. In the first days of the current war, Israeli Defense Ministry officials urged arms makers to step up production of interceptors and other armaments. The implication was that the fighting will continue longer than Israel anticipated.
The United States is contributing to Israeli air defense, too, but here, the evidence is firmer that Washington lacks the interceptors to sustain a prolonged conflict.
The other challenge is the economy. Over the past two decades, Israel has demonstrated remarkable resilience in the face of repeated wars. The campaign in June, for example, caused GDP to contract by an annual rate of 4.3 percent in the second quarter, but it bounced back strongly in the third quarter. The material damage from missile attacks is less of an issue than the lockdowns that paralyze business activity and the loss of manpower as workers are called away for reserve duty. Even after the army’s Home Front Command eased restrictions on Thursday to allow more businesses to reopen, the war is costing Israel’s $550 billion economy about $1.6 billion a week. The added military costs amount to as much as $3.2 billion per week, and another $970 million in estimated war damage.
The defense budget, which remains elevated despite the Gaza cease-fire due to the need to restore arms stockpiles and continue reserve mobilizations, is being increased even more to fight the Iran war. More than 100,000 reservists have been called up for this campaign, tripling the already large number of reservists in uniform. Fighter jet sorties, bombs, and interceptors are hugely expensive, and Israel has been using them up at a ferocious pace since the start of the war in Gaza.
Finally, there is the very real risk that a prolonged war will further undermine Israel’s standing in the United States. In contrast to Israel, the war is unpopular with the American public and, most importantly for U.S. President Donald Trump, has come under criticism by many in his MAGA base. The Israel-Hamas war turned much of the Democratic Party against Israel and has opened fissures among Republicans, who were once reliably pro-Israel. The latest Gallup poll shows that for the first time ever, more Americans sympathize with Palestinians and Israelis. There is already talk in MAGA circles that Israel dragged the United States into the war with Iran.
If the fighting goes badly or turns into the kind of forever war that Trump promised he would avoid, Israel might find itself being assigned the blame, and its standing in the United States would fall even further. Netanyahu has done nothing to counter that theory, probably because it enhances his self-proclaimed role as a world leader in the big leagues, able to influence even the U.S. president.
It’s too early to say decisively how the war will affect Netanyahu’s reelection chances in October. If Trump decides that the conflict is costing him too much politically at home and ends it prematurely, it may be on terms that keep the hard-line regime in Tehran in place. Netanyahu is already under criticism for failing to crush Hamas in Gaza during two years of war. A similar conclusion to the war in Iran might hurt him politically. On the other hand, a prolonged conflict could do a lot of harm to the Israeli economy before any benefits emerge.
For now, the prevailing wisdom in Israel remains that the war will be short and decisive, and that the cost to the economy will be contained and any losses made up for when the fighting is over. That explains why the Tel Aviv Stock Exchange rallied in the first week of the fighting while the rest of the world’s financial markets reeled.
