Tel Aviv: A shaky ceasefire between Israel and Iran is holding for now, offering both nations a chance to assess the extensive damage incurred during 12 days of intense conflict. The ceasefire, announced by US President Donald Trump on Monday, came after days of direct confrontation that inflicted significant human, economic, and infrastructural losses. Israel and the US have maintained that the operation achieved its goal of damaging Iran's nuclear capabilities, but experts and reports highlight the steep financial toll incurred by both nations, particularly Israel.
According to Anadolu Agency, Israel's military expenditure surged as the conflict commenced with airstrikes targeting Iranian nuclear and military facilities, leading to severe retaliation with hundreds of missiles and drone attacks. Operating missile defense systems such as Iron Dome, David's Sling, and Arrow cost Israel up to 1 billion shekels ($285 million) per day. Interceptor missiles, particularly those used by David's Sling and Arrow systems, individually cost between $1 million and $4 million.
The Israeli business daily Calcalist estimates that Israel's combined defensive and offensive operations during the conflict totaled approximately $5 billion. Fighter jet sorties, including those by advanced F-35 jets, cost around $10,000 per flying hour, with additional expenses for refueling aircraft and ammunition.
The cumulative impact of missile damage, reconstruction, and compensations could significantly inflate Israel's financial burden to double-digit billions. Shai Aharonovich, head of the Israeli Tax Authority, stated that Israel faces 'challenges of a magnitude we've never faced in history.' Amir Dahan from the authority's Compensation Department noted that 'there has never been this level of damage before.'
The Israeli government anticipates paying over 5 billion shekels ($1.5 billion) in property damage claims and evacuations, with about 40,000 claims already filed. Significant claims have been made in Tel Aviv, Ashkelon, Haifa, and Acre. Approximately 15,000 people have been evacuated, with hotel accommodation costs alone estimated at 100 million shekels ($29 million). The Tax Authority's Compensation Fund is expected to pay at least 9 billion shekels (nearly $2.7 billion).
Naser Abdelkarim, an assistant professor of finance at the American University of Palestine, estimated Israel's total losses - direct and indirect - could reach as high as $20 billion. Abdelkarim highlighted the sharp increase in Israel's military expenditures, disruptions in employment, and negative impacts on production and business sectors. Israel faces limited options to offset the widening budget deficit, including cutting spending on health and education, increasing taxes, or borrowing money.
On the US front, initial support for Israel's defensive efforts shifted to direct involvement on June 22 with a series of strikes against Iranian nuclear sites. The Pentagon reported that the operation involved 125 US military aircraft, including B-2 Spirit stealth bombers. The B-2 bombers, the most expensive aircraft in US military history, incurred operational costs estimated at around $56 million for the Iran strikes.
Defense analyst Andreas Krieg told Turkish broadcaster TRT World that the total cost of the US operation could range from $1 billion to $2 billion. However, US expenses extended beyond the direct strike, requiring significant military expenditures for naval carrier strike group deployments and air defense operations.