Copyright © HT Digital Streams Limit all rights reserved. Anat Peled, The Wall Street Journal 5 min Read 20 Jun 2025, 07:06 AM IT The mounting costs contribute to the pressure on Israel to quickly take up the war. Summary The price tag can limit Israel’s ability to wage a long war. Israel faces steep costs to restore hundreds of buildings damaged in Iranian missile strikes, also in Tel Aviv. Israel’s conflict with Iran costs the country hundreds of millions of dollars a day, according to early estimates, a price tag that can limit Israel’s ability to wage a long war. The largest single cost is the intercepts needed to blow up incoming Iranian missiles, which can only amount to between ten millions and $ 200 million a day, experts say. Ammunition and aircraft also contribute to the price tag of the war, just like the unprecedented damage to buildings. Some estimates so far say that rebuilding or repairing damage to Israel could cost at least $ 400 million. The mounting costs contribute to the pressure on Israel to take the war quickly. Israeli officials said the new offensive could take two weeks, and Israeli Prime Minister Benjamin Netanyahu showed no indication that he stopped before Israel reached all its goals, which included the elimination of the core program of Iran and its ballistic manure production and arsenal. But the war is expensive. “The most important factor that will really determine the cost of the war will be the expensive,” says Karnit Flug, a former Governor of the Bank or Israel and now a senior fellow at the Jerusalem-based Think Tank Israel Democracy Institute. Flug said she thinks that Israel’s economy could maintain a short campaign. “If it’s been a week, it’s one thing,” she said. “If it’s two weeks or a month, it’s a very different story.” An Interceptor responds to an incoming missile in the air above Tel Aviv this week. Over the past few days, according to the Israeli government, Iran has launched more than 400 missiles in Israel, which requires sophisticated air defense systems to stop. More missiles usually mean more interceptions. The David’s sling system, which was collectively developed by Israel and the US, can decrease short-to-long series of missiles, drones and aircraft. It costs about $ 700,000 each time it is activated, assuming that it uses two interceptions, according to Yehoshua Kalisky, a senior researcher at the Tel Aviv-based Institute of National Security Studies. Arrow 3, another system used, protected from long -distance ballistic missiles leaving the Earth’s atmosphere, at a cost of about $ 4 million per intercept, Kalisky said. An older version of the arrow, known as Arrow 2, costs about $ 3 million per intercept. Other military expenses include the cost of holding dozens of war aircraft, such as F-35 jets, hours at a time about 1,000 kilometers from the Israeli area in the air. According to Kalisky, each costs about $ 10,000 per hour of flight time. The Cost of Reforming Jets, and Ammunition including Bombs such as JDams and Mk84s, also must be factored in. “Per day it is much more expensive than the war in gaza or with hezbollah. And it all comes from the ammunition. That’s the big expense,” said Zvi Eckstein, who heads the Aaron Institute for Economic Policy at Reichman University in Israel, referral to both defensive ammunition. According to an estimate from the institute, a war with Iran lasting one month will amount to about $ 12 billion. The oncoming hall at Ben Gurion Airport near Tel Aviv was largely empty on June 13 after Israel closed its airspace for takeoff and landings. Israeli military spending has risen since the war, but economists did not provide a recession at this point, Eckstein said. Much of Israel’s economy has closed over the past few days due to the Iranian strikes. Only workers in Essential Industries were called to work, and many businesses such as restaurants were closed. The country’s most important international airport was closed for a few days and has now been opened for limited flights back to Israel for those trapped abroad. On June 16, S&P released a risk assessment for the Israeli-Iran escalation, but did not change the credit prospects. Israeli markets peaked on Wednesday, and continued to perform American criteria despite the conflict with Iran, betting that the war would end in Israel’s favor. Some economists believe that the markets seem to think that the economy of Israel will be resilient, as it has shown in Gaza over the past 20 months. Still, the damage done by Iranian missile attacks will pick up. Engineers say that the destruction caused by the great ballistic missiles is different from what they have seen in Israel in the past decades of war. Hundreds of buildings have been destroyed or severely damaged, and it will cost hundreds of millions of dollars to rebuild or repair, says Eyal Shalev, a structure engineer called to assess the damage to civil infrastructure. Shalev estimated that it would cost at least ten millions of dollars to restore a single newly built skyscraper in the central Tel Aviv, affected by the strikes. More than 5,000 people have been evacuated from their homes due to rocket damage, and some are housed in hotels for which the state pays, according to the National Directorate of Public Diplomacy of Israel. The target of critical infrastructure was a major problem in Israel. Two strikes on Israel’s largest oil refinery in the north of Israel led to its closure and killed three of the employees of the refinery. Some employees who work in sensitive or critical infrastructure industries have been told in recent days not to work, according to Dror Litvak, CEO of ManpowerGroup Israel, who provides more than 12,000 employees to different sectors. On Wednesday, Israel’s home front assignment said it would partly lift a ban on events – which would meet up to 30 people in total – and that workplaces could reopen in a large part of the country as long as there is a shelter in the area. But with schools still closed, many parents struggle to work at home and entertain their children in the midst of another military campaign. Ariel Markose, 38 years old, a chief strategy officer for an Israeli nonprofit, is now keeping her morning work out of a park in Jerusalem where she spends a few hours with her four young children. She returned home around 4pm and continued to work while her husband was taking over with the children. “There are families who collapse below,” she said. Iranian missiles have hit critical Israeli infrastructure, and some homes have been damaged, as in Ramat Gan. Write to Anat Peled by Anat.peled@wsj.com Stuck all the business news, market news, news reports and latest news updates on live currency. Download the Mint News app to get daily market updates. More topics #israel read next story
Israel’s war against Iran costs hundreds of millions of dollars a day
