Latest News and Developments from Israel in 2023

Latest News from Israel

Israel is often in the news due to its complex geopolitical situation and developments related to the Israeli-Palestinian conflict. As we enter 2023, here is an overview of some of the latest news stories coming out of Israel.

Elections and New Government

After five elections in less than four years, 2022 finally brought some political stability to Israel. In November, former Prime Minister Benjamin Netanyahu returned to power with a comfortable majority backed by a right-wing and religious coalition. However, the new government faces some challenges ahead.

Netanyahu’s coalition includes extreme right-wing parties such as Religious Zionism. There are concerns over what impact they may have on negotiations with the Palestinians. Additionally, the coalition only has a narrow majority, which could lead to instability if there are disagreements between coalition partners.

Security Situation with Palestinians

Tensions between Israelis and Palestinians have been escalating in recent months. There has been an uptick in lone-wolf style attacks by Palestinians targeting Israeli civilians and security personnel. Just last month, seven Israelis were killed in a synagogue shooting in East Jerusalem.

In response, the Israeli government has been cracking down on Palestinians in the West Bank through measures like home demolitions and mass arrests. However, critics argue such actions may only lead to further radicalization of Palestinian youth. Resolving the Israeli-Palestinian conflict remains as intractable as ever.

Iran Nuclear Deal

The fate of the Iran nuclear deal also made headlines again recently. After more than a year of indirect talks between the US and Iran, 2022 saw a final deal nearly reached before last minute Russian demands torpedoed the negotiations.

Entering 2023, resurrecting the deal looks challenging. Israel remains opposed to any deal with Iran, while Iran’s supplying of drones to Russia for use in Ukraine has turned the US Congress strongly against concessions to Iran.

Cost of Living Protests

Like many places around the world, inflation and a rising cost of living led to major protests in Israel last summer. Tens of thousands gathered to call for government action as food, housing, and fuel prices reached new highs thanks to factors like supply chain issues caused by the Ukraine war.

While the protests have died down, cost of living challenges remain a major issue for many Israeli families. New Finance Minister Bezalel Smotrich will be tasked with addressing these economic concerns, but his religious-right Yamina party’s spending demands could constrain the budget.

Energy Explorations and Climate Change

Recent years have seen Israel aggressively exploring for natural gas reserves off its Mediterranean coast. The Leviathan gas field coming online in 2019 turned Israel into a gas exporter. New exploration deals were signed in 2022 with neighbors like Lebanon and Egypt.

However, sections of Israeli society are questioning expanded fossil fuel exploration given the global climate crisis. Younger generations organized Israel's first climate march last spring. Such activism could impact Israel’s future energy policy.

High-Tech Industry Developments

Israel’s high-tech industry and startup ecosystem continue to bloom. 2022 saw another record year for Israeli unicorns with over 20 tech companies reaching $1 billion plus valuations. Israeli innovation is making global waves in sectors like cybersecurity, fintech, autonomous vehicles, and more.

However, there are challenges lurking below the surface. Skyrocketing housing costs make hiring difficult for tech companies centered in Tel Aviv. Additionally, the strong shekel and rising inflation threaten the competitiveness and growth of Israel's key high-tech export sector going into 2023.

Tourism Recovers After COVID

COVID-19 restrictions over the past three years essentially wiped out Israel's tourism industry. But travel to Israel is finally resuming in 2023 after the country reopened borders in May 2022.

Pent Up Demand from Europe and Americas

With most entry requirements now lifted, Israel is seeing a surge in bookings from Europe and the Americas. North American Jewish organizations have restarted long-paused youth trips and Christian pilgrim groups are flocking back to walk in Jesus's footsteps.

There is significant pent-up demand driving this tourism rebound as people want to return to this historic destination after a 3-year gap. The recovery is a relief to Israel's struggling tourism sector.

Challenges Remain in Asia

However, Israel's tourism industry is unlikely to see a full rebound in 2023. Key source markets in Asia remain closed due to China's zero-COVID policy. Chinese groups previously made up 15% of all visitors.

These restrictions are impacting famous sights like the Dead Sea, Jerusalem's Old City, and Masada which are heavily dependent on Asian tourism. Full recovery may take a few more years until China and the rest of Asia open up.

Focusing on Emerging Markets

Given the uncertainty from Asia, Israel is pivoting its tourism marketing to focus on emerging markets instead. For example, direct flights were launched last year from places like Morocco, Turkey, and several Eastern European countries.

These efforts seem to be paying off based on 2022 data that showed rising visitor numbers from markets like Poland, Romania, and Morocco. Expanding beyond established tourism source countries could make the industry more resilient.

Impact of Regional Instability

As a small country in a volatile neighborhood, political and economic developments across the Middle East inevitably impact Israel as well.

Unrest in Iran

Ongoing protests against Iran’s regime may have consequences for Israel. If the Islamist government falls, it could impact Iran’s regional aggression and nuclear program. However, in the short term, further unrest may prompt Iranian backed militant groups like Hezbollah to create cross-border incidents to divert attention.

Arab World Seeking stability

The Arab world is increasingly focused internally after years of turmoil from events like the Arab Spring. Weary populations want economic growth instead of continued conflict with Israel based on recent polls. Countries like Saudi Arabia and UAE have covertly built ties with Israel for this reason.

However, antisemitism remains rife in Arab media, making public normalization difficult. As Arab states try rebuilding their economies, reducing regional tensions benefits them and Israel.

Uncertain Global Economy

With inflation, recessions, and disruption facing much of the world, Israel remains alert to economic ripple effects. For example, European energy and inflation woes may reduce investment and immigration inflows that have fueled Israeli tech growth.

Additionally, Israel's export focused economy depends on stable trading partners. A global downturn shrinking demand for Israeli technologies would impact economic growth domestically as well.

Key Takeaways

As seen above, Israel enters 2023 with a mix of uncertainty and potential. While security threats remain, expanding normalization agreements and Israel's growing economic clout point to a promising path ahead.

The new Netanyahu government faces economic discontent domestically in addition to diplomatic challenges posed by right-wing coalition partners and regional instability. Yet most Israelis remain fundamentally optimistic about their country's future.

FAQs

What is the latest with the new Netanyahu government?

In November 2022, Benjamin Netanyahu returned to power as Prime Minister with a right-wing and religious coalition. However, with a narrow majority and extreme parties in the coalition, there are concerns over potential instability and obstacles to negotiations with the Palestinians.

How is the security situation between Israelis and Palestinians?

Tensions have been rising with an increase in lone-wolf attacks by Palestinians and harsh crackdowns by Israel in the West Bank. Resolving this long-running conflict remains extremely challenging.

What is the status of recovering tourism in Israel?

After COVID border closures, tourism is rebounding significantly from Europe and the Americas. However, Asia remains restricted which delays a full recovery. Israel is now focused on emerging markets to compensate.

How could instability in Iran impact Israel?

Further unrest in Iran could influence its nuclear and regional aggression policies. However, attempts to divert attention by Iran-backed militant groups could flare up conflict along Israel's borders in the near-term.