Report: Gaza Occupation to Cost Israel Up to $49 Billion Annually

Date: 10 August 2025 - 21:48

News ID: ۱۴۲۳۹۳

TEL AVIV (Dispatches) -- Israeli daily Yedioth Ahronoth has issued a stark warning to the illegal entity’s political and military leaders, warning that the occupation of Gaza Strip could impose significant financial burdens on Tel Aviv, including deep cuts to education and healthcare budgets.
The newspaper reported on Sunday that Israeli prime minister Benjamin Netanyahu is pushing forward with plans to occupy Gaza despite warnings from the finance ministry about a looming 7% budget deficit this year and the risk of further downgrades to Israel’s credit rating. The occupation could cost Israel between 120 to 180 billion shekels annually—approximately $32 to $49 billion, based on an exchange rate of around 3.5 shekels per dollar.
Economic analyst Gad Liver told Yedioth Ahronoth that financing the Gaza occupation plan would require significant reductions in spending on social welfare, education, and healthcare, alongside the imposition of new taxes, which would exacerbate the budget deficit.
The report highlighted that Israel may enter the next fiscal year without an approved budget, forcing it to operate in stages, which could seriously impact the economy.
According to sources within Israel’s finance ministry, the cost of deploying 250,000 reservists and ammunition usage is estimated at roughly 350 million shekels per day, amounting to 10-11 billion shekels monthly and totaling 30-50 billion shekels by the end of 2025.
These expenses are in addition to the 10-15 billion shekels monthly projected for Gaza’s administration if occupied, and billions more for refugee housing and humanitarian aid such as food, water, medicine, and electricity for Gaza’s population.
Yedioth Ahronoth noted that both finance ministry officials and the Bank of Israel expect the budget deficit to reach at least 7% this year, with a risk of further credit rating downgrades by international agencies.
The newspaper warned that Jewish settlers should prepare for austerity measures including new taxes, the extension of suspended tax cuts, and severe budget reductions in education, health, social welfare, and infrastructure.
In a security cabinet meeting last Thursday, all senior Israeli security chiefs either opposed or expressed caution over Netanyahu’s Gaza occupation plan. The heads of Mossad and the Shin Bet security agency voiced their opposition.
Channel 12 Israeli TV reported that Tzachi Hanegbi, head of Israel’s security council, rejected Netanyahu’s proposal, aligning with the army chief who warned that controlling Gaza City would endanger hostages’ lives.
Chief of Staff Eyal Zamir strongly opposed the plan during the cabinet meeting, warning that occupation and clearance operations could last one to two years, cause a humanitarian disaster due to destruction of civilian infrastructure, and jeopardize Israeli captives held in Gaza.