Markets Jolt as Netanyahu Warns of Isolation and War Grinds On
The Israeli military pushed deeper into Gaza City on Tuesday as Prime Minister Benjamin Netanyahu warned in Jerusalem that Israel faces “a kind of isolation,” a message that rattled investors and sparked fresh debate over the country’s economic model. In Keren Setton’s report, the warning lands at a moment when governments consider recognizing a Palestinian state and imposing new restrictions, and when the Tel Aviv Stock Exchange opened lower.
At the heart of the storm is a question of direction. Netanyahu floated the idea of “autarkic characteristics” to make Israel more self-sufficient, then played down the remark after criticism from both the opposition and some coalition ministers. Business leaders cautioned against retreating from the world. “Israel isn’t isolated, but it is on a very negative course,” said Dani Catarivas, president of the Israeli Federation of Bi-National Chambers of Commerce and Industry.
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Pressure is not just financial. The United Nations Human Rights Council issued a report alleging genocide in Gaza, while Israel faces a separate case at the International Court of Justice. Several states have announced weapons embargoes; universities in Brazil, Norway, Spain, and Ireland have severed links; and Spain moved to limit port and airspace access for arms shipments. Cultural boycotts are widening, and large protests are pressing governments to censure Israel.
Even so, some indicators look sturdy. The shekel has strengthened against the US dollar this year and unemployment remains low. Still, economists say the high-tech engine that generates nearly 20% of gross domestic product is vulnerable if foreign capital retreats. “The state of the economy does raise amazement,” said Dr. Gali Ingber. “But there is no immunity.”
Read Keren Setton’s full piece for the granular picture on boycotts, markets, and whether talk of self-reliance reshapes Israel’s open-economy playbook.
