Israel estimates $17.5B cost of 40 days of war on Iran, Lebanon

The Israeli Finance Ministry estimated the cost of 40 days of war on Iran and Lebanon at around $17.5 billion, the Israeli Channel 12 reported on Thursday.

Direct military expenditures for the ongoing conflict with Iran and Hezbollah are estimated at around 40 billion shekels ($12.9 billion), the report said.

Civilian costs are projected at around 13-14 billion shekels ($4.2-4.5 billion), bringing the total to roughly 54 billion shekels ($17.5 billion), the channel added.

The figures are preliminary and expected to be updated, and do not include future reconstruction costs or losses to gross domestic product caused by the partial shutdown of the economy during the war.

The Finance Ministry has also allocated about 7 billion shekels ($2.3 billion) as a reserve for defense-related expenses, which would raise total military costs to around 40 billion shekels, according to Channel 12.

Military expenditures include weapons, flight hours, reserve soldiers’ service days, and damage.

The ministry estimated compensation costs under property tax at about 12-13 billion shekels ($3.8-4.2 billion), covering expected payments to businesses affected by reduced activity during the war.

An additional 1 billion shekels (around $324 million) is expected to be spent on unpaid leave schemes for workers unable to attend work and to compensate local authorities.

As of Thursday morning, 28,237 claims for direct property damage had been submitted to the compensation fund, including 18,408 for buildings, 2,594 for equipment, and 6,617 for vehicles.

The largest number of claims was reported in Tel Aviv (around 5,100), Beersheba (3,600), Arad (2,350), Petah Tikva (2,000), Dimona (1,500), and Beit Shemesh (1,400).

Iran and the US announced a two-week truce on Tuesday, mediated by Pakistan, aimed at paving the way for a final agreement to end a war launched by Washington and Israel against Tehran on Feb. 28. The conflict has left thousands dead and wounded.

Lebanon declared a period of national mourning after Israeli attacks killed at least 254 people on Wednesday, according to Lebanese authorities, raising fears that the escalation could derail the fragile truce between Washington and Tehran.

* Writing by Rania Abushamala in Istanbul