Insights Series - Israel-Hamas Conflict (#1)
Proximities, to better inform its clients and the international community, will be producing a weekly intelligence briefing on the status of the ongoing Israel-Hamas conflict andhow we see it developing. These briefings will be produced on Wednesdays and be current as of 1400hrs (GMT+1). If you require any supplementary information or wish to speak to our analyst team about any recent developments, please email email@example.com.
- One month into the Israel-Hamas conflict, tensions have remained as clashes between both sides continue to escalate. The conflict has taken on a hybrid approach, with both sides using several fronts – notable kinetic military operations, cyber campaigns, and disinformation – to either undermine the other side’s operational or military capabilities. While Hamas launches missile attacks consistently against Israel, Tel Aviv’s forces have launched an all-out offensive against the Palestinian terrorist group to shutter Hamas’ operations.
- This tit-for-tat conflict has resulted in heavy civilian causalities and infrastructure destruction in the Gaza Strip, with the bombing of the Al-Ahli Baptist Hospital highlighting the extent of the issue. These incidents have incited global unrest from pro-Palestinian groups and increased calls from intergovernmental agencies and NGOs for a ceasefire or de-escalation of tensions between Israel and Hamas to allow humanitarian aid into Gaza. However, growing disinformation campaigns, regarding the conflict, have continued to obnubilate the origin of missile attacks – such as the Al-Ahli Baptist Hospital – and what is happening on the ground, creating false narratives on the conflict, and spurring further unrest from the international community.
- Uncertainty over how this conflict will develop remains high. However, based on the aforementioned developments and the historical context of Israel’s conflict with Hamas, Proximities proposes four scenarios that give a predictive analysis of how the conflict could develop. These scenarios can be defined as “a return to status quo”, “partial annexation & proxy war”, “a war of attrition”, and “a full annexation of Gaza”. These scenarios not only go into the geopolitical impacts but also the impact on businesses.
What is the context?
It has been nearly a month since the Israel-Hamas conflict broke out after the Palestinian terrorist group Hamas launched attacks in Southern Israel on 7 October that resulted in the death of at least 1,400 people according to the Israeli government. Of these victims, attendees of the Israeli Supernova music festival became some of the first targets of Hamas fighters after they crossed the border region near the Israeli city of Be’eri. Nearly 200 festival-goes were taken hostage by the terrorist group and hidden across the Hamas-controlled Gaza Strip in the wake of the attack.
This is the most notable conflict between Israel and Hamas since the 2014 Gaza War which was launched by the Israeli government in response to the kidnapping and murder of three Israeli teenagers in the West Bank. This incident sparked a 50-day conflict that resulted in heavy civilian casualties, with between 2,125 and 2,310 on the Palestinian side and 6 on the Israeli side.
What are key trends?
Key Military and Security Trends
- Israeli Defence Forces (IDF) have launched “Operation Swords of Iron” (OSI) in response to Hamas’ attacks and kidnaps. Israeli Prime Minister Benjamin Netanyahu claims that OSI is a highly ambitious plan that involves house-to-house urban fighting, air strikes, and other military operations to “eradicate” Hamas from the Gaza Strip. For example, the IDF reportedly targeted 200 Hamas and PIJ forces on 16-17 October. This joint strike entails Israeli naval forces and air force fighter jets targeting underground tunnels, banks allegedly used to finance the groups’ terror activities, weapon silos, and other infrastructure critical to the group’s operations. While a full invasion of Gaza has yet to take place as of the time of writing, small but increasingly more frequent and invasive incursions into the strip have occurred.
- Hamas’ tunnels have been a particular point of interest for the IDF during OSI. Indeed, Hamas has built a series of tunnels underneath the Gaza Strip. While the IDF claims that it is “very difficult to assess the size of the network”, the IDF estimates that the so-called “Gaza Metro” is believed to stretch 41 km long and 10 km wide across the territory. However, Hamas claims that at its peak it maintains an estimated 500 km of tunnels to smuggle goods, fuel, and weapons underneath the neighbouring Egyptian border and through Gaza. Nevertheless, Israeli artillery strikes have remained focused on disrupting this tunnel network, which has resulted in notable civilian infrastructure destruction across the Gaza Strip.
- Despite the OSI’s aim, it remains highly unlikely that Israel will be able to dismantle Hamas given that every attempt by Israel will likely strengthen the group’s extremist ideology and the plight of the Palestinian people. As such, there is a heightened risk that the current wave of fighting will become a protracted conflict. Indeed, Prime Minister Netanyahu has called a record 360,000 reservists to duty and warned Israeli citizens of “a long war”. At the time of writing, Israel has 169,000 active military personnel – excluding its 465,000 total reservists – in comparison to Hama’s estimated 15,000-20,000 fighters.
- The conflict further escalated on 17 October after hundreds of Palestinians were killed – and hundreds more wounded - in a “massive blast” at the Al-Ahli Baptist Hospital in Gaza’s northern region. The Gaza Strip’s officials – who differ from the Palestinian officials in the West Bank – claimed that Israel’s ongoing airstrikes were the cause of the lethal incident. However, the Israeli Defence Ministry “categorically” denied the allegations and blamed the blast on a “failed rocket launch” by the Palestinian Islamic Jihad group (PIJ), a rival Islamist militant group in Gaza. Proximities is currently unable to independently verify the origin of the Al-Ahli Baptist blast (see misinformation section for further analysis).
- Alongside the hostilities in Gaza, reports emerged that Lebanese Hezbollah fighters have launched a series of attacks on Israeli army posts and a northern border village. IDF has reportedly responded with tit-for-tat strikes against Hezbollah forces along the Lebanon-Gaza border. UN peacekeepers have warned that border clashes between the two forces have escalated in response to the increasing number of Palestinian civilian casualties that have occurred because of the IDF’s strikes, which have reached more than 8,500 at the time of writing.
- Outside of Hezbollah, other Iranian-backed actors have also been active following the start of the Israel-Hamas conflict. For example, US naval ships shot down missiles fired by Houthi forces in Yemen allegedly targeted at Israel around 20 October. Similarly, Islamist militia linked to Tehran have launched multiple strikes against US bases in Syria and Iraq, wounding at least 24 soldiers and killing at least one civilian contractor. Such activity has prompted US forces to launch counterstrikes. There is a heightened risk of the intensity of these attacks increasing in the coming days and weeks, especially as Israel’s ground offensive into Gaza continues to escalate. While US Defence Secretary Lloyd Austin claimed the Iran-backed strikes were “mostly unsuccessful attacks against US personnel”, the risk of such strikes becoming increasingly more effective will remain. Nevertheless, the risk posed to businesses will remain limited unless they are providing critical services to US military personnel in Syria and Iraq.
Key Cyber Trends
- While the focus has remained squarely on the kinetic side of the Israel-Hamas conflict, malicious cyber threat actors have been operating in the background to further heighten uncertainty around the conflict. For example, shortly following the start of Hamas’ missile attacks, multiple Israeli websites and mobile apps designed to alert Israeli citizens of incoming projectiles were subjected to Distributed Denial-of-Service (DDoS) attacks by pro-Palestinian hacktivist groups to disrupt their services. One group – AnonGhost – utilised an exploit in the mobile app “Red Alert: Israel” to send incoming missile alerts to some app users to sow chaos and unrest.
- These attacks are indicative of the trend of hacktivist groups launching disruptive cyber-attacks – such as DDoS or defacement - in support of political movements. However, the short time frame of these attacks – 1-30 minutes – highlights these groups’ low cyber sophistication and their limited capabilities to compromise their target’s digital infrastructure. Nevertheless, these groups are highly likely to continue launching such attacks to both support their side and make a name for themselves in the cyber underground.
- The highest-risk category for these attacks will remain Israeli government entities and private sector organisations supporting their critical infrastructure, e.g., technology companies, energy, or telecoms. Nevertheless, other private sector firms that make overtly political statements against Palestine could also be targeted by these pro-Palestinian groups with low-level attacks.
Malicious cyber threat actors have been operating in the background to further heighten uncertainty around the conflict
Key Mis-Disinformation Trends
- In addition to the aforementioned cyber campaigns, mis-disinformation has rapidly emerged related to the conflict since the Hamas attack on 7 October. Indeed, the Director of the George Washington University’s Institute for Data, Democracy and Politics Rebekah Tromble stated during an interview about the conflict that “it has become more difficult for researchers to collect and analyse meaningful data to understand what’s actually happening on any of these [social media] platforms”. The issue is related primarily to the more hands-off approach that social media companies have taken towards monitoring the spread of misinformation on their sites. For example, X’s – formerly known as Twitter – introduction of paid premium accounts and prioritised ranking/searches via the algorithm has made it easier for politically motivated accounts to spread propaganda.
- Recently, misinformation related to the bombing of the Al-Ahli Baptist Hospital has obnubilated the origins of the blast and who is responsible for the attack. While the Palestinian Authority claims that the IDF are responsible for this incident, the Israeli government maintains that the incident was caused by a PIJ rocket. Reports published by the journalistic organisation Bellingcat and the French and Canadian intelligence services further confirmed that the attack may not have been Israeli. Indeed, the report indicates that an analysis of social media-located videos and images of the incident and its aftermath indicates that the “impact point does not appear to be consistent with the 500, 1000, or 2000-pound bombs used in Joint Direct Attack Munitions (JDAMs)”. While these findings are likely to ease tensions for Western nation-states currently supporting Israel in its claim it was not responsible for the hospital incident, it is unlikely to completely halt the accusations and tensions surrounding the incident from Pro-Palestinian supporters.
- There remains a heightened risk that mis-disinformation over the conflict will intensify in the coming weeks, especially as tensions over the conflict continue to increase vis-à-vis the looming threat of an Israeli ground assault into the Gaza Strip. These mis-disinformation campaigns are highly likely to be launched by both Israeli and Hamas operatives aimed at garnering favour from the international community but also obfuscating any wrongdoing stemming from the conflict, such as the bombing of civilian infrastructure such as hospitals or schools. Such activity will likely further exacerbate regulatory scrutiny of social media companies and heighten the risk of severe reputational damage or monetary fines being levied against them.
Key Social Trends
- Tens of thousands of protesters across the world have taken to the streets since the start of the conflict to demonstrate in support of the Palestinian people and against the IDF’s alleged impending ground assault. These demonstrations emerged predominantly in major cities in the Arab world, with some 1,000 protesters rallying in the Malaysian city of Kuala Lumpur chanting “free Palestine” and “crush the Zionists” whilst burning effigies covered with Israeli flags. However, similar-sized protests were also held in Western cities. For example, numerous NGOs, humanitarian groups, and pro-Palestinian supporters held rallies in or around capital buildings or Israeli Embassies in cities such as Washington DC, the Hague, or Mexico City.
- However, the threat of potentially more escalatory protests has increased since the perceived Israeli bombing of the Al-Ahli Baptist Hospital. For example, hundreds of protesters in Ramallah and Nablus (in the Occupied West Bank) rallied after the bombing which resulted in clashes with the Palestinian security forces, who fired tear gas at the demonstrators. There is a high likelihood that medium- to large-scale protests will continue in the coming weeks, especially if Israel’s incursions into Gaza become more frequent and destructive. These pro-Palestinian protests will continue to take place on a global scale, with major capitals and political centres – e.g., London, Berlin, Washington D.C., and The Hague – remaining the areas for demonstrations.
- While pro-Palestinian protests are expected to remain largely peaceful, their presence could encourage counter-pro-Israel demonstrations and result in minor clashes and heightened police activity. Businesses across all sectors are advised to mitigate their risk exposure to these threats by diversifying their supply chain routes away from major city centres and refraining from making statements regarding the conflict to avoid being targeted by either side’s supporters. Despite this, there is a latent risk that pro-Palestinian protests similar to the one at the Makhachkala airport in Russia’s Dagestan region could emerge. This rally, where hundreds of demonstrators broke onto the airport’s runaway chanting anti-Jewish slogans around a flight landing from Israel, underlines the potential for more aggressive and targeted activity for protesters. Nevertheless, such activity will likely be conducted by a small minority of pro-Palestinian supporters and pose a low risk to businesses or travellers.
There is a high likelihood that medium- to large-scale protests will continue in the coming weeks
Key Political Trends
- While the international community’s response to this incident has been diverse, the Western world has shown strong support for Israel in response to the Hamas attacks and kidnapping incidents. Meanwhile, citizens of the Middle East and Northern Africa (also known as the Arabic-speaking world) have also strongly condemned the Hamas attack whilst also standing up for the Palestinian plight.
- From the West, US President Joe Biden reaffirmed his support for Israel during meetings with Israeli Prime Minister Netanyahu during a mid-October trip to Israel. While Biden was originally scheduled to meet with several Arab leaders – including the Palestinian President Mohammad Abbas, his visit was cancelled after the 17 October blast at the Al-Ahli Baptist Hospital that resulted in the death of at least 500 civilians. Biden is also highly likely to exert diplomatic pressure on Israel during this trip to initiate a ceasefire negotiation with Hamas and to allow humanitarian aid to flow into Gaza given the territory’s dwindling supplies and inadequate critical infrastructure.
- Meanwhile, the European Union (EU) announced on 16 October that it launched an “EU Humanitarian Air Bridge” to bring critical supplies to the humanitarian organisations providing support in Gaza. In addition, EU President Ursula Von der Leyen tripled the EU’s humanitarian financial assistance to Gaza to over EUR 75 million. Similarly, the Netherlands pledged an additional EUR 10 million in humanitarian assistance intended for “food, water, and medical care for Gaza’s inhabitants”.
- Despite the West’s continued calls for peace, the US government vetoed a United Nations Security Council resolution on 18 October that called for “humanitarian pauses” in the conflict to allow for aid work to gain access to the Gaza Strip. While Washington claimed that they vetoed the resolution because they “believe we need to let that diplomacy play out [between Israel and Hamas]”, this action is largely in line with the US foreign policy agenda. Washington has a history of shielding Israel from Security Council Resolutions, with the US vetoing at least 53 such actions since 1972.
- In contrast, Iran’s Foreign Minister Hossein Amriabdollahian warned on 17 October that Tehran could launch a potential “pre-emptive” strike against Israel “in the coming hours” in response to reports that the IDF is planning a ground offence into the Gaza Strip. Amirabdollahian warning that “all possible options and scenarios are there for Hezbollah [to strike Israel]” emerged as the Iran-backed terrorist group and the IDF are engaged in increasingly escalating tit-for-tat clashes along the Lebanon-Israel border region. The risk of a Hezbollah strike against more in-land Israeli targets will likely increase in the coming days, especially as the rhetoric surrounding the IDF’s allegedly impending ground offence continues. This will sustain the security threat posed to both Israeli and US assets in the region, including military installations or critical infrastructure establishments such as those in water purification, energy, or communications.
What is the forecast?
The growing uncertainty looming over the conflicts exacerbates the threat landscape faced by organisations operating both in Israel and the surrounding region. Therefore, Proximities has built out a series of scenarios (organised in decreasing likelihood) based on not only the ongoing developments but also the Israel-Palestine conflict’s historical context to indicate how the conflict could develop.
Scenario 1: Return to Status Quo
The most sought-after scenario from humanitarian organisations, intergovernmental organisations, and Israel’s Western allies regarding this conflict is either a ceasefire and/or the situation de-escalates enough to where tensions between Gaza and the Israeli forces return to the “status quo”. This return could be triggered by events such as a UN peacekeeping mission or the economic burden of a prolonged conflict forces Tel Aviv to end its military operations (see scenario 3). A return to the status quo would refer to the retreat of the additional Israeli forces, the cessation of all bombing and military operations into the Gaza Strip, and the return of all critical infrastructure operations – such as energy, water, or gas – to Gaza by the Israeli government. However, there will still be a significant amount of investment and construction required to return the strip to what it was pre-conflict. This will likely - alongside historical factors – maintain tensions between Palestinians and the Israeli government for the coming months and heighten the risk of sporadic protests by Palestinian citizens in Gaza and the West Bank. Such activity could be met with a strict Israeli or Palestinian security response, and businesses and their personnel are advised to avoid areas of typical interest for protesters, such as outside political capitals or highways, to minimise their exposure to these threats.
Despite the great appeal of this scenario to not only Israel’s allies but also the international community, several mitigation factors ensure this is a lower likelihood scenario. Most prominently, the communication lines between Hamas and the Israeli government are limited to non-existent and neither side has shown an inclination to open such lines. This lack of communication highlights the two side’s all-time-low relations and Israel’s focus on eliminating Hamas as a threat and unwillingness to keep an option of diplomatic de-escalation readily available. Moreover, regional states with clout in the region have had limited success convincing either side to come to the negotiation table like the Egyptian government did during the 2014 Gaza War. While nation-states such as Egypt have had some success during hostage negotiations, other nation-states such as the US have largely toed the line of publicly supporting Israel and its actions whilst also calling for “diplomatic efforts” to improve the situation.
Scenario 2: Partial land acquisition & proxy-war
In this scenario, Israeli ministerial officials follow through with their promise and annex a large swath of the Gaza Strip as compensation for the Hamas attack. Such aggressive activity could trigger the Iranian government and its proxy groups – such as Hezbollah – to follow through with their promises of launching “pre-emptive” strikes against Israel if they engage in a ground offensive against Palestine and prompt a proxy conflict between these actors. Such a conflict would present a significant risk to not just the Palestinian territories but also Israel as well, particularly from these actors’ rocket strikes.
While Israel’s airspace is protected by its so-called “Iron Dome” air defence system, the dome is not 100% effective. Indeed, Rafael – the state-owned Israeli defence firm that developed the system – claims that the technology has a 90% success rate at intercepting enemy rockets. However, The University of Singapore’s Middle East Institute stated this claim is “very contentious” because it is based on “estimates and data” provided by the Israeli government itself. Indeed, data gathered during the early stages of the 2023 Israel-Hamas conflict found that the between 2,200 – 3,000 rockets fired by Hamas towards Israel since 7 October have been successful in overwhelming the Iron Dome.
While Israel’s airspace is protected by its so-called “Iron Dome” air defence system, the dome is not 100% effective.
But Hezbollah has much more sophisticated weapons systems and the financial support of the Iranian government and has hundreds of thousands of rockets at their disposal, with it probable that such an amount can surpass the Israeli rocket defence system. However, Hezbollah is highly unlikely to launch its entire rocket stockpile at Israel at once and instead sporadically launch a series of rockets towards Israel against strategic targets, such as military installations or weapons caches. Nevertheless, there remains a heightened risk that civilian targets could be selected as well, with critical infrastructure entities, such as those in energy, telecoms, or defence, constituting high-value targets for such activity. Entities and organisations based in an unpopulated area of Israel will be particularly vulnerable in this scenario as the Iron Dome is programmed to destroy rockets which are considered threats to civilian urban areas.
However, this threat will likely be notably mitigated by the presence of US military personnel in the region. For example, the USS Carney, a destroyer, located in the northern Red Sea shot down multiple rockets and several drones that reportedly were launched by Houthi Forces in Yemen and headed towards Israel. Pentagon press secretary Brigadier General Pat Ryder stated that the missile interception was “a demonstration of the integrated air and missile defence architecture that we have built in the Middle East […] we are prepared to utilise, whenever necessary to protect our partners and our interests in this important region”. Nevertheless, there will remain a latent risk of Iranian proxy or pro-Palestinian militia groups’ missile attacks penetrating the Israel-US defence system and striking strategic targets such as critical infrastructure entities, government buildings, or military infrastructure.
Scenario 3: War of attrition
The war of attrition scenario entails that the current situation between the IDF and Hamas fighters continues indefinitely. While the two sides have historically already been engaged in a long-term conflict, this scenario would take a form like the Russia-Ukraine conflict in that both sides would engage in more regular operations aimed at targeting infrastructure, weapon caches, personnel critical to the opposition and civilian urban targets, such as public gatherings or critical infrastructure entities. Despite this, these operations would unlikely be able to deliver a critical strike that would end the conflict quick manner. This scenario would likely evolve if Israel partially succumbed to pressure from its allies – particularly the US – to not further escalate the conflict and implement its Operation Swords of Iron to the fullest.
This scenario would likely have one of the higher humanitarian impacts due to the significant imbalance between Hamas and the IDF’s military capabilities. More specifically, Palestine – in the Gaza and West Bank - has already experienced a significantly higher number of civilian causalities compared to Israel, a trend that is likely to intensify further in a long-term conflict.
Recent policy blunders have seen FDI in the country drop by 60% and caused notable swings in the Israeli stock market.
On top of these social concerns, a prolonged conflict would also likely have significant economic impacts on both Israel and Palestine. Palestine’s economic outlook was already dire before the conflict broke out, with the World Health Organization (WHO) calling it a “humanitarian catastrophe”. In contrast, Israel was ranked as the fourth best-performing economy amongst the Organization for Economic Cooperation and Development in 2022 by the Economist. However, recent policy blunders by Israeli Prime Minister Benjamin Netanyahu – particularly his judicial overhaul – have seen FDI in the country drop by 60% and caused notable swings in the Israeli stock market.
However, Tel Aviv’s more aggressive approach towards this conflict iteration with Hamas has economic observers concerned about long-term impacts on Israel’s economy. Most notably, many of the reservists who have been called into service for this conflict are technology entrepreneurs, teachers, lawyers, or other sectors that make up an important part of Israel’s entrepreneurial economic activity. As such, rating agencies such as Moody’s or Fitch have downgraded aspects of Israel’s economic rating – such as debt – after warning that the heightened geopolitical tensions surrounding the conflict decrease investors’ confidence due to the risk of “a diversion of resources in the economy” emerging.
Nevertheless, Israel is highly likely to receive some type of financial aid from allies such as the US, with US President Joe Biden already expected to ask Congress for 14 million USD to provide Tel Aviv with security and military aid. While such financial support would likely mitigate the risk of any short-term economic instability, the prolonged nature of the conflict could heighten the risk of Tel Aviv introducing policies such as reducing interest rates to support its wartime economy but subsequently reducing the value of the shekel and hindering Israel’s long-term economic growth. As such, any prolonged IDF mobilisation will likely be weighed against its economic impact, with any significant hindering of Israel’s already slowed economy likely to heighten the likelihood of Tel Aviv calling for a reduction of troops or an extended ceasefire similar to 2014, which would trigger the start of our scenario 1.
Scenario 4: Full annexation of Gaza
While this can be seen as the worst-case and lowest-likelihood scenario, it would also likely have the greatest impact on business operations and regional stability in the region. Most notably, the full annexation of the Gaza Strip by Israel would bring about strong condemnation from the international community, particularly the Arabic-speaking community. Such a scenario would also likely see at the minimum the partial retraction of Washington’s support for Tel Aviv’s actions in Palestine, especially as calls from the international community increase for action to be taken by the UN Security Council and other intergovernmental organisations against Israel. While it is probable that this scrutiny will not be as severe as against the Russian government in response to the Ukraine conflict, there is a high likelihood that sanctions and other regulatory actions will be levied against Israel in response to the full annexation of the Gaza Strip.
In addition, more intense protests will likely be launched across the world in response to this action, which would be comparable if not of greater scale than those seen during the start of this current Israel-Hamas conflict. While these demonstrations are unlikely to be initially targeted against businesses, entities that show public support for Israel and/or are seen to be undermining the Palestinian cause will likely become targets of pro-Palestinian activist rallies. Indeed, these rallies are likely to be centred in areas of political importance, such as government buildings, embassies, or capital centres. However, protests in Palestine and Israel are likely to be met with significant resistance from Israeli security forces which could lead to clashes and violence. Demonstrations in other major cities – such as Washington D.C. or Amsterdam - are likely to remain peaceful and show solidarity with the plight of the Palestinian people, however, such activity could turn more violent if met with counter-protesters or with significant police resistance.