Israel has seen growing debate in recent weeks over the repercussions of the US-Israeli war on Iran, not only in terms of regional security but also in terms of its domestic political impact and the future of Prime Minister Benjamin Netanyahu.
According to Israeli media outlets and political and security analysts, the war, officially framed as part of a regional deterrence strategy, is increasingly imposing costs on Israel’s internal front, economically, socially, and politically.
Israeli reports indicate that the widening confrontation with Iran, even if indirect and conducted through the exchanges of air strikes, has heightened security alert levels across the country. The situation has disrupted daily life, with growing fears of retaliation by Iran or its regional allies.
Economically, analysts warn that prolonged tensions could slow growth, deter foreign investment, and increase military spending, placing additional strain on the state budget. Some experts have linked these developments to declining market confidence in Israel’s long-term stability.
Political analyst Fuad Al-Laham, a specialist in Israeli affairs, said the war is already having both direct and indirect economic consequences in Israel.
“The direct impact is the paralysis of production, as millions of Israelis have been away from their workplaces since the war began,” he said. “This amounts to a near-total shutdown, accompanied by immediate financial losses in Israeli markets.”
He added that indirect effects include rising fuel prices and higher transport costs due to disruptions in the Strait of Hormuz, alongside delays in goods shipments, contributing to inflationary pressures.
Key sectors such as construction, real estate, and tourism have also been disrupted, compounding economic losses. Al-Laham noted that the mobilisation of around 450,000 Israeli reservists has further strained the economy by removing a large segment of the workforce while increasing government expenditure.
On the war’s sustainability, Al-Laham said he does not believe Israel’s home front can endure a prolonged conflict.
“This is a long-distance confrontation based on the exchange of strikes,” he said. “Geography works in Iran’s favour, as it is better positioned to absorb sustained attacks, while life in Israel is effectively frozen.”
He added that the prolonged sheltering of civilians has paralysed the country, suggesting Israel may struggle to sustain a lengthy war, while Iran appears to be exploiting this vulnerability through continued strikes.
The Israeli media have also highlighted growing internal divisions over the escalation with Iran. While some politicians argue that the confrontation is necessary to reinforce deterrence, others warn that an open-ended conflict could draw Israel into a multi-front war.
Recent opinion polls cited in the Hebrew-language media suggest a decline in public trust in the country’s political leadership, amid perceptions that major security decisions are being taken without broad national consensus.
For Netanyahu, analysts say the war presents a double-edged sword. On the one hand, it allows him to project himself as a strong leader capable of confronting regional threats, a narrative he has long used to bolster his political standing.
On the other hand, any miscalculation or negative domestic fallout could undermine his political future. Analysts note that Netanyahu already faces internal challenges, including political and legal pressures, making any broader failure potentially more damaging.
Al-Laham argued that the war may not significantly affect Netanyahu’s position, given the Israeli public’s shift towards the political right. “Israeli society today leans heavily towards right-wing positions,” he said. “That limits the potential political impact on Netanyahu.”
However, he added that sustained losses from missile strikes, such as those reported in areas like Arad and Dimona, could make it harder for Netanyahu to maintain public support for the war.
Al-Laham also pointed to growing strains in Israel’s foreign relations as a result of the war, particularly with European countries already critical of Israel’s war on Gaza.
He noted that unlike in previous conflicts European leaders have not rushed to show solidarity with Israel during the current escalation, suggesting a shift in attitudes. He added that Israel’s efforts to normalise relations with the Gulf countries could also be affected.
The Gulf states, he said, have found themselves indirectly impacted by a conflict unfolding in their region, particularly amid disruptions to trade and energy exports.
These developments may prompt the Gulf countries to reassess their regional alliances, potentially slowing or halting normalisation efforts with Israel.
Israeli media coverage has increasingly raised questions, and at times criticisms, about the war’s objectives. Some commentators have questioned whether Israel has a clear exit strategy or is drifting into a prolonged conflict.
Analysts have also highlighted the absence of a parallel political strategy, warning that reliance on military solutions alone could further complicate the situation.
Overall, the war’s impact appears to extend beyond the battlefield into the heart of Israel’s political landscape. While the confrontation may provide Netanyahu with short-term momentum, its long-term consequences remain uncertain.
Many analysts agree that the coming period will be decisive not only in shaping the trajectory of the regional conflict but also in determining the future of Israel’s political leadership.
Al-Laham said differences between Netanyahu and US President Donald Trump exist but do not undermine the broader strategic alliance between the two sides.
He described the disagreements as both substantive and tactical. Strategically, he said, Washington seeks to contain Iran and bring it into a negotiated framework, while Israel aims to significantly weaken Iran’s capabilities and leadership.
Tactically, differences have emerged over specific military actions, including reported US objections to Israeli strikes on Iranian energy facilities, reflecting Washington’s sensitivity to its relations with oil-producing Arab states.
Despite these differences, Al-Laham said, the United States and Israel continue to coordinate closely in pursuit of shared objectives in the conflict.
* A version of this article appears in print in the 26 March, 2026 edition of Al-Ahram Weekly
Short link: