Missiles, damage, and debt: The true price of Israel’s escalation

The war in which the Zionist regime was involved for two years on seven fronts inflicted significant damage on the regime’s domestic infrastructure. The effects began to emerge gradually from the very first year, but over time—and now that tensions on the northern and southern fronts have eased—the depth of the damage to the regime’s economy has become evident.

According to the latest report released by the Israeli Tax Authority, more than 30 billion shekels (about $10 billion) have so far been paid from property tax revenues to compensate for damages from the two-year war. Of this amount, 27.5 billion shekels (nearly $8 billion) were spent compensating for war damages in the northern and southern regions. Specifically, the Tax Authority paid 22 billion shekels ($6.8 billion) for indirect damages and more than 5.5 billion shekels (about $1.6 billion) for direct damages.

Put simply, the Zionist regime’s military confrontation with Hezbollah and the Palestinian resistance caused major damage in the occupied territories, for which approximately $9 billion in compensation has been paid to date. In addition, 2.6 billion shekels (about $870 million) were paid for damages from the war with Iran—a battle that lasted only 12 days.

The report shows that since October 7, 2023, a total of around 132,000 compensation claims have been filed, of which 812,000 claims were for indirect damages. Indirect damages relate to businesses that were unable to operate due to wartime conditions or evacuation orders. Most of the damage in this category concerns the tourism sector, hotels, and food services such as restaurants and cafés.

Which sectors filed claims for direct damages?

Breaking down the types of damage and the number of direct damage claims since the start of the two-year war reveals the following:

• 529 claims for damage to infrastructure.
• Around 90,000 claims for damage to buildings, houses, and apartments, with compensation paid to this sector totaling just over 4 billion shekels ($1.2 billion). This sector suffered the greatest damage and also received the highest amount of compensation.
• A large number of claims were also filed for vehicles, totaling more than 30,000 claims. Compensation paid for vehicles amounted to 518.3 million shekels ($160 million).
• Around 10,000 claims for damage to equipment and goods, mostly related to shops, businesses, and offices.
• 1,369 claims filed by farmers for damage to agricultural areas and animals in barns and farms.
• 242 claims for damage to inventory in warehouses and factories.
• Part of the compensation cases also relates to loss of rental income from apartments. In this regard, 4.5 million shekels ($1.4 million) were paid in compensation to 682 landlords and tenants.

A key point in the Israeli Tax Authority’s report is that these costs are still ongoing. According to the authority, residents of the occupied territories can continue to file compensation claims until April 30, 2026. Therefore, the roughly $10 billion paid so far in damages to residents of the occupied territories is expected to increase further.

Damages from the 12-Day War

According to claims by the Zionist regime’s army, its air defense systems managed to intercept a large portion of Iran’s missile attacks during the 12 days of war. However, reports from economic bodies indicate that even the missiles that penetrated the defensive layers and struck their targets caused significant damage.

Accordingly, data from the Israeli Tax Authority show that in just 12 days of fighting with Iran, the authority paid 2.6 billion shekels ($8.7 million) in compensation for 56,766 claims—an unprecedented figure for a security incident in the occupied territories that lasted less than two weeks.

More specifically, 43,820 claims were filed for damage to buildings, private homes, and apartments; 5,917 claims for damage to vehicles; and 6,046 claims for damage to equipment, warehouses, and businesses.

In this context, for three months following the war, the Tax Authority financed housing costs for more than 15,000 displaced persons. The head of the claims department stated: “We were receiving 14,000 compensation requests per day, and two of my phones personally stopped working due to the constant calls from claimants.”

One of the areas that suffered serious damage in this war was two well-known luxury towers in Tel Aviv known as the Da Vinci Towers, located at the Kaplan–Da Vinci intersection. All residents were forced to evacuate after Iranian missile strikes. Reconstruction of the southern tower was completed after three months, but repairs to the northern tower will take at least two more years, meaning an imposed cost of more than $2 million on Netanyahu’s cabinet to cover alternative housing for the residents.

Importantly, compensation payments related to this war are still ongoing. The Tax Authority has introduced a new mechanism allowing business owners to submit claims for indirect damages. This new procedure is based on a plan approved by the Knesset and provides supplementary compensation for businesses that suffered real losses as a result of the hostilities.

Under the established conditions, this compensation applies to businesses directly affected by military operations—either due to damage from direct Iranian missile strikes or due to disruptions that forced them to suspend operations. The deadline for submitting such claims has been set for March 9, 2026.

According to an investigative report, the cost of the 12-day war for Israel has been estimated at $5.9 billion (around 1 percent of Israel’s GDP), along with a depletion of Arrow-3 and David’s Sling interceptor missile stocks and damage to critical infrastructure such as the Haifa refineries and Soroka Hospital.