Since the outbreak of the conflict, Israel has been conducting military operations on several fronts - in the Gaza Strip, Lebanon, Syria, and also against Iran. War-related expenses have already reached approximately 420 billion shekels, or over PLN 540 billion. This makes this conflict the most expensive in the history of the country. Defense spending increased from 4.2 percent. GDP in 2022 to almost 8 percent. in 2026, already consuming a quarter of the state budget. Half of these funds were financed by increasing debt.
Despite the enormous costs, the Israeli economy did not collapse. The stock market is breaking records, the shekel remains strong and inflation is moderate. Consumption remains high and interest rates are falling. However, behind these indicators lie the rising cost of living and the deteriorating situation of many households. Food prices have increased by about 8 percent since 2024, and subsequent reservist mobilizations have meant interruptions to work, studies and family life for hundreds of thousands of Israelis.
The war affected not only the economy but also the social structure of Israel. The mass mobilization of reservists intensified the dispute over the exemption of ultra-Orthodox men from military service. The ultra-Orthodox make up about 13 percent of the country's population, and many citizens consider their dismissals unfair, especially at a time when others are repeatedly called up to the reserves.
Tiredness of the war, subsequent mobilizations and rising costs of living contributed to the increase in emigration. From 2024, more people will leave Israel than arrive. In the years 2023–2025, an average of about 90,000 people left the country per year for at least three months, while in the previous decade it was about 60,000. Particularly disturbing is the increase in emigration among employees of the new technology sector, doctors and people with high incomes. Israel is therefore losing not only its inhabitants, but also qualified specialists and the highest-earning taxpayers.
Despite massive defense spending and three years of fighting, most Israelis do not consider the war to have been won. Only one third of the population is convinced of victory in the Gaza Strip, and even fewer positively evaluate the results of the fights against Hezbollah and Iran. The public is divided in their assessment of the current level of safety - 38 percent believe the situation has improved, but a similar group sees no change or believes it is worse. As many as 60 percent fear another attack from the Gaza Strip in the coming years.
Israelis clearly distinguish between the actions of the army and the government - 61 percent are satisfied with the military's conduct of the war, but only 34 percent are positive about the actions of the civilian authorities.
Three years after the war began, the Gaza Strip is almost completely destroyed. More than 80 percent of buildings were damaged or demolished, and 1.9 million of the 2.1 million inhabitants had to flee their homes. Two-thirds of the population currently live in tents or makeshift camps. Reconstruction has barely started, and Israeli troops still control nearly two-thirds of the territory.
The ceasefire that ended the heaviest fighting in October 2025 has brought some improvement in access to food, but humanitarian aid still does not meet basic needs. Families receive food parcels and bags of flour that cover only half of the minimum calorie requirement. Food prices are twice as high as before the war.
Shortages of access to electricity, water and medical care are common. Hospitals use generators, but fuel constraints mean power is unavailable to most families. The price of generator oil has increased from $3 to as much as $1,300 per liter. As many as 77 percent of households depend on tanker water supplies, and 73 percent of water samples do not meet sanitary standards. Poor sanitation and a lack of medicines mean that infectious diseases account for 18 percent of medical consultations. At least 41,800 people require long-term rehabilitation, a quarter of them are children.
The war also destroyed the education system. About 200,000 children do not have access to organized education, and nearly half a million are educated in temporary centers run by humanitarian organizations.
The administration of the Gaza Strip is divided. Israel controls most of the territory, Hamas has de facto control over the area where the majority of the population lives, and the UN-appointed administration has not yet been allowed into the Strip. Despite the formal dissolution of Hamas, its officials continue to provide basic services.
The peace plan adopted after the ceasefire assumes the gradual disarmament of Hamas, the withdrawal of Israeli troops and the transfer of administration to the Palestinian National Committee for the Administration of the Gaza Strip. However, the implementation of these assumptions has stalled. Israel makes further troop withdrawal conditional on the full disarmament of Hamas, and Hamas does not intend to surrender its weapons as long as the Israeli army remains in the Strip.
