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Israel, in concert with the US, has escalated military conflict with Iran through direct airstrikes, while simultaneously deepening its control in the West Bank, actions that have triggered international condemnation and regional economic disruption.
February 2026
Week of Feb 23, compared to 12-week average
Top sources covering Israel
critical but not hostile
The economy faces acute regional disruption from the conflict with Iran, causing widespread flight cancellations and airspace closures. This overshadows significant foreign investment in Israeli tech and shipping assets, including a major acquisition by Hapag-Lloyd. The US and Israel have also agreed to intensify economic pressure on Iran's oil sales.
Politics is dominated by high-stakes diplomacy with the US and India, amid international isolation over West Bank policies. Netanyahu met with Trump, with reports of both agreement and disagreement on Iran strategy, while Modi's visit solidified a major strategic partnership. Over 80 countries at the UN condemned Israel's West Bank actions.
Security is defined by a major escalation with Iran, as Israel and the US launched direct airstrikes, prompting Iranian retaliation. Concurrently, Israeli military operations in Gaza continued, killing dozens despite a ceasefire period. The US also allowed non-essential embassy staff to leave Israel over safety concerns.
Society is under intense international scrutiny over allegations of seeking permanent demographic change in Palestinian territories, with the UN raising ethnic cleansing concerns. Internal tensions are visible, as Smotrich clashed with Ra'am over Arab crime, and Israel barred an Al-Aqsa imam from entering the mosque ahead of Ramadan.