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Marking Two Years to the Iron Swords War
Opportunities vs. Risks
September, 2025
Israel is entering a crucial phase, and must decide whether to proceed to take over Gaza City, followed by the central camps, by means of a military operation or make a deal to release all 48 hostages.
However, it is our understanding that the two options are mutually exclusive. A military occupation of the Gaza Strip could last many months, and claim the lives of many IDF troops. It may also prove fateful for the possibility of returning all 48 hostages, both living and deceased. Moreover, military occupation would lead Israel to establish military administration. Such a development would place an unbearable burden on Israel’s abilities, forcing it to assume responsibility for 2.2 million Gazans living in the Gaza Strip, and provide them with all they need to sustain themselves. Under such a scenario, and as long as Israel will have control over Gaza but no plan to form an alternative administration, the Arab states will be unlikely to invest the huge resources required to reconstruct the Gaza Strip, estimated at billions of Dollars.
Despite the war, Israel can still advance its historic normalization with Saudi Arabia. This is a unique opportunity for Israel to boost its strategic, political, military, and economic power. Following the agreement with Saudi Arabia, other countries in the Arab and Muslim world are likely to be willing to sign similar agreements with Israel, bolstering the strategic alliance with the United States as the leader of the Israeli-Arab axis. Conversely, an ongoing direct military occupation of Gaza would hinder the establishment of such an axis in fulfilment of Sinwar’s underlying vision when launching Hamas’s murderous and atrocious attack against Israel, and exacerbate the latter’s relations with the Arab states, further sabotaging its status internationally. In this context, one should add the soaring criticism of Israel worldwide in recent weeks, and the intentions of many western leaders, headed by President of France Macron, to recognize a Palestinian state during the upcoming United Nations assembly sessions in late September. Furthermore, a considerable increase in acts of antisemitism has been witnessed against Jews and Israelis across the globe.
It should be emphasized that all notions of transferring the Gazan population are impractical, first and foremost due to the vehement objection of all Arab states, led by Egypt. Any ongoing attempts to promote such initiatives could cause fundamental detriment to Israel’s strategic relations with Egypt. Furthermore, special attention should be given to the growing explosivity in the West Bank. U.S. Ambassador to Israel Huckabee has even alerted to the possibility that the deteriorating financial situation there would lead to the Palestinian Authority’s collapse, impacting security stability. Similarly, officials in the UAE have warned that any annexation steps advanced by the Israeli government in Judea and Samaria would have repercussions for normalization with Israel. The murderous terror attack carried out in Jerusalem by two illegal residents from Judea and Samaria, which led to the murder of 6 civilians, illustrates the existing explosiveness.
The Threat Posed by Iran
On wider circles, Israel has had remarkable military achievements against Iran and its proxies, as manifest in the significant dent caused to the ring of fire established by Iran around Israel in recent decades. In addition, Iran’s nuclear and SSM programs, as well as its air defense capabilities, have been compromised during the Rising Lion War. At the same time, the decision reached by Germany, the UK and France to trigger the snapback mechanism on Iran, which means the return of UN Security Council sanctions without allowing Russia or China to veto them, aims to increase the pressure exerted on the Islamic Republic to force it back to the negotiations table. Some evidence of Iran's willingness to flex is the reports of its willingness to restore supervision by IAEA inspectors.
Nevertheless, as long as the current Iranian regime remains in power, it will continue to promote its extreme ideology calling for Israel’s annihilation, and strive to gradually restore its damaged capabilities. Thus, Israel needs political freedom of action as part of its overall preparation to address the multidimensional threat posed by Iran. To do so, it must focus most of its resources on building military capabilities, and developing strategic relations with the Arab states and its international allies. Israel should also enhance its coordination and special collaborations with the United States, as they are crucial to any future action taken against Iran. Wading knee-high in the Gazan swamp instead, with no prospects of ending the war, would impede the main effort that should be focused on Iran.
Opportunities in Syria and Lebanon
On the northern front, the collapse of Asad’s regime and weakening of Hizballah serve Israel as a strategic asset. In Lebanon, alongside the damage caused to Hizballah’s military capabilities, President and former Army Chief Joseph Aoun is spearheading efforts to establish his country as a sovereign state while actively disarming Hizballah. This challenge is complex and risk-intense as Hizballah will not willingly surrender its arms without a fight, and since the Lebanese army has many Shiites who support Hizballah among its ranks.
In Syria, President Ahmed al-Sharaa is trying to stabilize his country under his leadership, and is even willing to advance direct defense agreements with Israel. Syria has, in recent months, become one of the main scenes of struggle between the various forces in the Middle East. Israel and the Gulf States on the one hand, and Turkey and Qatar on the other, with Iran simultaneously seeking to stir the pot in an attempt to maintain its influence there. No matter what the future holds, it is vitally important for Israel to keep the Syrian Druze safe.
Israel is at a crossroads where decisions must be made that would be fateful to its future. Resolving to continue fighting and taking full control of the Gaza Strip with no political plan means abandoning the hostages, sinking into the Gazan swamp, while tarnishing Israel’s international and regional image, thereby possibly preventing the destruction of Hamas despite the great detriment caused to its military capabilities. The time has come, therefore, to release the hostages immediately by means of a political arrangement, even at the cost of ending the war. At the same time, Israel must also collaborate with the United States and Arab countries to establish an alternative administration to Hamas in Gaza and its ongoing presence in the Gaza Strip moving forward.
Institute for Policy and Strategy (IPS), Executive Director: Maj. Gen. (res.) Prof. Amos Gilead
Editted by Dr. Shay Har-Zvi, Senior Fellow, Institute for Policy and Strategy (IPS), Reichman University.
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