SANAA, Oct. 09 (YPA) – Two years after the war in Gaza, following Operation Flood of Al-Aqsa that has been carried out by the Palestinian resistance on October 7, 2023, “Israel” has witnessed profound and far-reaching transformations, encompassing political and diplomatic, economic and financial, social and psychological, security and military aspects, as well as academic influences.
This operation has shaken Israeli perceptions of security and power, further deteriorating the occupation’s reputation. Economic pressures have escalated, social and psychological crises have worsened, leading it to weaknesses in the military system.
The occupation’s standing on the international stage has deteriorated at a time when Tel Aviv was seeking normalization with several countries, and the battlefronts have multiplied, including Iran directly, as well as Yemen, Lebanon, and Iraq. What Israeli Prime Minister Netanyahu did not anticipate was the growing international recognition of Palestine, which represented a diplomatic setback for the Israeli right-wing agenda, which strongly rejected it. This shift in international public opinion resonated with the United Nations General Assembly, which adopted a resolution supporting full membership.
Considering the economic losses caused by Operation Flood of Al-Aqsa to the occupation, Israeli military spending has increased by 65% in 2024, reaching $46.5 billion, according to Hebrew newspapers. This is the largest war cost in the history of the occupation.
A report was published by the Globalist website in August 2025 had predicted that the occupation’s public debt would exceed 70% of GDP by 2025, and that the government budget deficit would reach approximately 16% of GDP annually for the remainder of this decade.
The exodus of capital from the occupied territories perhaps reflected the deterioration of the Israeli economy. At least 1,700 Israeli millionaires left last year, and the phenomenon of “reverse migration” has increased in general, negatively impacting the economy and innovation, especially with the departure of workers in vital sectors such as high-tech.
In the tourism sector, 90 hotels were forced to close, representing 20% of “Israel”‘s hotel sector. The disruption of the daily economy caused losses estimated at almost 1.5 billion shekels per day.
The social and psychological repercussions of Flood of Al-Aqsa Operation were profound and widespread, with the occupation suffering significant human losses. The National Insurance Institute documented the deaths of 978 civilians, while the Ministry of Defense announced the deaths of 1,152 soldiers, with estimating the actual high losses.
In this context, the National Insurance Institute indicated that more than 80,000 people affected by the October 7 operation were treated, including 30,462 with psychological disabilities. The Institute also recorded more than 30,000 people suffering from psychological disorders.
Considering the security and military implications, Operation Protective Edge dealt a severe blow to Israeli perceptions of security and power, revealing flaws in the security and military system and a miscalculation of the resistance’s capabilities.
The conflict has expanded to include multiple fronts, including Lebanon, Yemen, and Iraq, leaving the occupation military exhausted. The occupation army has been suffering from a shortage of fighters and equipment, and, most importantly, its claim to be the “most moral army in the world” has crumbled.
Numerously, the Israeli occupation has faced a serious troop shortage of more than 12,000 soldiers, and a shortage of 300 officers in the positions of faction commanders, forcing it to recruit women and Jews from abroad to fill this gap.
Israeli ports have also been negatively impacted by attacks by Sanaa forces.
Israeli academic institutions were not immune to the repercussions of the Al-Aqsa Intifada, while Israeli universities and academics were subjected to a widespread academic boycott. The Committee of Presidents of Israeli Universities had recorded more than 750 cases of academic boycott since the beginning of the war on Gaza, resulting in moral and economic losses.
Furthermore, the European Commission discussed a recommendation to partially suspend Israel’s access to the Horizon 2020 scientific research funding program, threatening to cut off a significant portion of financial support for Israeli research.
Finally, the Al-Aqsa Intifada brought about a radical shift in the Israeli landscape at all levels. From the deterioration of its international reputation and the halt of normalization, to the enormous economic pressures and rising public debt, to the social and psychological shocks and reverse migration, to the exposure of military weaknesses and the academic boycott, the occupation faces unprecedented challenges.
AA