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Shaike Komornik

2025 and Its Challenges for the State of Israel

As the new year begins, Israel stands at a critical crossroads, facing a complex web of challenges that include security, economic stability, and social cohesion. While Israel has demonstrated resilience in navigating past crises, the intersection of these challenges requires immediate attention and long-term strategic planning by its leadership.

Security Challenges

Israel’s geopolitical situation remains one of the most complex in the world, with ongoing regional volatility exposing it to persistent threats. Chief among these security challenges is tension with Iran, particularly over Tehran’s nuclear ambitions. Israel views a nuclear-capable Iran as unacceptable and currently pins its hopes on US President Donald Trump to take decisive action to thwart Iran’s nuclear project—whether through diplomatic, economic, or military means—so that Israel does not have to face this challenge alone.

Israeli security analysts see a golden opportunity to dismantle Iran’s nuclear aspirations, especially following setbacks faced by Iran’s proxy groups such as Hezbollah in Lebanon, Hamas in Gaza, and the collapse of Bashar al-Assad’s regime in Syria, which has effectively dismantled Iran’s “ring of fire” around Israel. This opportunity coincides with Trump’s firm stance against allowing Iran to acquire nuclear weapons.

On the southern and northern fronts, the situation remains fragile despite military successes. In Gaza, remnants of Hamas are regaining control over parts of the strip. Hamas’s holding of Israeli hostages is a sore point for Israeli society and complicates decision-making by the government. The government faces criticism for its lack of a clear “day-after” strategy for Gaza and the uncertainty  as to who would govern the territory. A deal for a ceasefire in Gaza and the return of Israeli hostages has begun, but the extant of implementation of all its stages remains to be seen. This deal has also stopped for the time being the Yemenite Houthis attacks on Israel and on the maritime navigation ways in Bab Al Mandab but the potential problem still remains.

In the north, the ceasefire agreement with Hezbollah faces difficulties and breaches. However, the election of a new president in Beirut offers a glimmer of hope for its stability and the restoration of calm in the region.

The situation in Syria, following the fall of Bashar al-Assad’s regime, also raises concerns. While Iran has lost a critical stronghold in the region, which is a positive development for Israel, the nature and political leanings of the new regime remain unclear. Additionally, Turkey’s influence on the new regime is unsettling for Israel, given Ankara’s increasingly adversarial stance.

The West Bank has recently become a flashpoint, with escalating violence attributed by Israeli security officials to Iranian provocations, including arms smuggling and incitement, as Iran attempts to compensate for its loss of Gaza.

Economic Challenges

Like its security situation, Israel’s economy faces significant challenges following 15 months of war, which inflicted substantial material losses.

The direct costs of the war are a heavy burden, estimated at around 250 billion shekels, along with compensation for displaced civilians in the south and north, and a decrease in GDP due to the mobilization of reservists. These factors suggest a difficult recovery period ahead. These difficulties are reflected in Israel’s downgraded credit rating by international agencies, higher taxes on citizens, and a cost of living that is among the highest in developed countries.

Despite these challenges, Israel’s economy remains robust, with the high-tech sector continuing to achieve significant success and accounting for a large share of GDP and exports. Other indicators, such as a lower-than-expected budget deficit, provide hope for economic recovery. Analysts believe that if the war ends and security stabilizes, Israel’s economy will rebound and grow once again.

Social Challenges

Perhaps the most pressing challenges facing Israel are on the domestic front, as they directly impact national security. Following the October 7 massacre by Hamas in southern Israel, the country initially witnessed a sense of unity and solidarity in response to these atrocities and the subsequent war against Hamas and Hezbollah. However, as the war that dragged on for over a year  has subsided, old divisions and disputes have resurfaced.

These divisions span over several areas, including polarization between the ruling right-wing parties and opposition centrist and leftist parties, or more specifically, between supporters and opponents of Prime Minister Netanyahu.

Discontent among secular Jewish citizens has also grown toward the ultra-Orthodox (Haredi) community, whose young men, as yeshiva students, are exempt from mandatory military service and receive generous government stipends, with many not participating in the workforce. The Haredi parties, leveraging their coalition role, maintain these privileges, sparking widespread frustration in other sectors of society.

The government’s repeated attempts to curtail the judiciary’s powers have also reignited conflicts between supporters and opponents of such measures. These disputes, which led to massive protests before the October 7 massacre, have resurfaced in recent weeks.

These internal divisions and disputes threaten Israel’s social cohesion, which analysts view as a genuine risk to the state.

Charting a Path Forward

The overlapping challenges Israel faces demand urgent attention.

  • On the security and regional front, Israel must restore deterrence and address Iran’s nuclear project, ideally with support from the Trump administration. Concurrently, it should aim to strengthen and expand regional alliances through frameworks like the Abraham Accords, which can provide strategic depth. However, expanding these alliances will require resolving issues related to Gaza and achieving some form of settlement in the West Bank.
  • Economically, the government must work to revitalize the economy by injecting funds into war-affected sectors, addressing the high cost of living, reducing inequality, diversifying industries, and maintaining security to foster long-term growth.
  • Socially, urgent steps are needed to heal rifts between different segments of society, including establishing a formal commission to investigate the Hamas massacre, and possibly holding new legislative elections to rebuild trust in democratic institutions and the rule of law.

Despite these immense challenges, Israel’s history of overcoming adversity provides a strong foundation for tackling them. By addressing its security, economic, and social issues with determination and strategic planning, Israel can chart a path toward greater stability and prosperity.

About the Author
Former news editor in the IBA radio in Arabic and chief editor for the digital platforms in Arabic on both IBA and IPBC. He has written many articles in Arabic, English and Hebrew on various topics. He has academic degrees in Middle Eastern history, Member of the presidency of the Israeli Press Council, Member of the board of directors of the Journalists Association Jerusalem, Member of the board of directors of the Israeli Translators Association.
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