Impact of the Gaza War

The war began with a Hamas-led terrorist attack on Israel on October 7, 2023, during which attackers crossed into southern Israel, killed civilians, burned homes and property, and seized hostages.[7] At least 1,200 people were killed — mostly civilians — and 251 were taken hostage into Gaza; among the dead were people of different ages, religions, and at least 33 nationalities, and the attack struck communities, the Nova music festival, and military installations.[1] The hostages included men, women, and children; Israeli, American, and other foreign nationals; and Jews, Muslims, and Christians.[7]

The Israeli government declared a state of war on October 8, and the Israel Defense Forces (IDF) entered Gaza on October 27.[7] The hostages' fate became a defining preoccupation of Israeli public life, with families and supporters holding weekly protests demanding their release. Releases occurred through intermittent ceasefires, exchange agreements, and limited rescue operations.[1] The final 20 living hostages returned on October 13, 2025, and the body of the last hostage was returned on January 26, 2026, formally closing the hostage crisis.[7]

Israel's National Insurance Institute recorded that 1,029 Israeli citizens — excluding security forces and emergency responders — were murdered in terrorist attacks from October 7, 2023 onward, among them 63 children.[8] The institute also recognized 87,425 new victims of hostile actions, including 24 amputees, and counted 216 civilian hostages returned from Gaza: 154 alive and 62 whose bodies were repatriated.[8] The human toll extended across households: 1,216 people were orphaned — 345 of them under 18 — 300 were widowed, and 1,204 parents lost a child.[9]

Reported Palestinian casualties accumulated rapidly and remained deeply contested throughout the conflict. Between October 7, 2023, and January 8, 2025, the Hamas-controlled Gaza Health Ministry reported at least 45,936 Palestinians killed and 109,274 injured.[10] By February 10, 2026, the ministry's cumulative total had risen to 72,037 deaths.[11] As of July 22, 2026, Hamas-announced totals stood at 73,305 killed and 173,918 injured.[12] These figures are attributed to the ministry and are not independently verified; they do not distinguish combatants from civilians.[1][11]

The reliability of the ministry's numbers has been disputed. The ADL noted that accurate figures for civilian deaths were contested and that no credible source had published confirmed statistics at the time of its account; it also observed that Israel's own figures could omit people missing or buried under rubble.[1] An INSS analysis argued that the ministry's totals do not distinguish deaths caused by Israeli fire from deaths caused by Palestinian groups, illness, old age, or natural causes.[11] A July 2024 Lancet study estimated roughly four indirect deaths for every direct death — attributing indirect mortality to damage to health-care infrastructure and to shortages of food, water, and shelter — yielding an estimate of approximately 186,000 direct and indirect deaths, equivalent to about 8 percent of Gaza's prewar population; this figure was presented as an estimate, not a verified count.[13] UNRWA reported that at least 265 of its own staff had been killed during the conflict.[10]

At least 41,844 people were documented as living with conflict-related, life-altering injuries requiring long-term rehabilitation, based on World Health Organization data incorporating information from medical teams inside Gaza.[14]

Displacement in Gaza was nearly total in scale. By the end of 2024, the United Nations calculated that 90 percent of Gaza's population had at some point been displaced under an IDF evacuation order — a figure referring to people displaced at some point rather than simultaneously.[2] By October 2025, more than 90 percent of Gaza's population of over 2 million people had been displaced, often more than once, with the medical system described as shattered, homes and buildings flattened, croplands razed, and hunger pervasive.[15] Evacuation orders and militarized zones during the March–August 2025 campaign eventually covered more than 80 percent of the Gaza Strip.[1] A World Bank–United Nations–European Union assessment found that more than 1.9 million Palestinians had been internally displaced and that more than 1.2 million people — roughly 60 percent of Gaza's population — had lost their homes.[3]

CRS reported that about 90 percent of Gaza's approximately 2.1 million residents had been displaced, with most facing unsanitary and overcrowded conditions and acute shortages of food, water, medical care, and other essential services.[16] One year after the October 2025 ceasefire, 65 percent of Gaza's population — approximately 1.37 million people — were still living in tents or makeshift shelters, according to the UN Shelter Cluster.[17] An August 2026 analysis classified 94 percent of the population as having shelter needs ranging from inadequate provisions to critical deficiencies.[17]

Food insecurity was severe throughout the conflict. Approximately 80 percent of Gaza's population relied on direct humanitarian aid, while local agriculture was severely affected by destruction of fields and lack of fuel for irrigation.[18] CRS documented that obstacles transporting aid through crossings and checkpoints, combined with difficulties distributing it safely, contributed to high levels of food insecurity; Israeli officials disputed that Israel was limiting aid, pointing instead to security-related problems including looting, while aid providers and Israeli authorities both faced coordination challenges.[16] Israeli government claims that Hamas stole, taxed, or diverted humanitarian aid were noted by humanitarian organizations, though they differed over the scale of diversion and how to prevent it.[19]

Conditions improved following the October 2025 ceasefire, though they remained far from adequate. Israel's Coordinator of Government Activities in the Territories (COGAT) reported that 1.78 million tons of food entered Gaza between October 2025 and June 2026, that more than 70,000 cubic meters of water were supplied daily, and that more than 18,000 tons of medicines and medical supplies entered after the ceasefire began.[19] COGAT also reported that staple-food prices fell approximately 72 percent between September 2025 and May 2026.[20] Nonetheless, UNICEF said in October 2026 that improvements in food and nutrition remained fragile: acute malnutrition rates had fallen following increased aid flows, but only one in three children under two was achieving minimum dietary diversity, a June survey found chronic malnutrition in one in eight children under five, and approximately 800,000 children remained displaced, most living in tents or unsafe buildings.[21]

The scale of physical destruction in Gaza was documented across every major sector of civilian life. The April 2026 World Bank–UN–EU Rapid Damage and Needs Assessment estimated $35.2 billion in direct physical damage, $22.7 billion in economic losses, and total recovery and reconstruction needs exceeding $71 billion.[3][14] The same assessment found that 68 million tons of debris were contaminated with unexploded ordnance, posing an enduring hazard to any reconstruction effort.[22]

Housing was the most severely damaged sector. Some 371,888 housing units — more than three-quarters of Gaza's total housing stock — were directly affected, and nearly 85 percent of those were completely destroyed.[14] The Gaza Ministry of Public Works placed the housing sector at approximately 70 percent destroyed by end-2024, including 170,000 units completely destroyed and 80,000 residential buildings partially damaged.[23] The reconstruction assessment estimated $18 billion in residential damage and $16.21 billion in housing-reconstruction needs alone.[14] UNOSAT satellite data estimated that approximately 282,000 homes and apartments had been damaged or destroyed.[24] A July 2026 OCHA report found that only 1 percent of rubble had been cleared from roads and essential facilities by that date.[17]

The electricity and water systems were essentially destroyed. More than 90 percent of Gaza's electricity infrastructure was reported destroyed; Gaza's sole power plant stopped operating after the start of the conflict, and electricity generation later relied on local generators and solar panels.[14] The reconstruction assessment put electricity-sector damage at $565.3 million and recovery needs at $2.73 billion.[14] Approximately 88 percent of aboveground water infrastructure and 76 percent of underground water networks were partly damaged or destroyed, leaving about 77 percent of households reliant on tanker-delivered water; estimated water and sewer damage reached $1.7 billion, with recovery needs of $4.24 billion.[14] UNICEF estimated that more than 70 percent of Gaza's water and sanitation infrastructure had been damaged.[24] More than 60 percent of the sewage system was also reported damaged, raising the risk of epidemic disease, including from bodies remaining under rubble.[23][4]

Major roads were heavily damaged: about 80 percent of access roads between districts were completely destroyed, including sections of Salah al-Din Road, and Gaza Municipality placed overall road damage at approximately 90 percent.[23][24] Nearly 92 percent of businesses were affected through damage to buildings or equipment; damage to commercial and industrial structures was estimated at $6.35 billion, and nearly three-quarters of workers who had been employed before the war lost their jobs.[14] Damage to food-production and market infrastructure was estimated at $1.44 billion, and agricultural recovery needs — including sustaining food supplies while production and distribution were rebuilt — were put at $10.49 billion.[14] Analysis relayed by a BBC fact-checking investigation estimated damage to 82.4 percent of annual crops and more than 97 percent of tree crops through August 10, 2025.[24]

Education was largely suspended for nearly two years. A report submitted to the UN Human Rights Council in June found that more than 90 percent of universities and schools had been damaged or completely destroyed, and UNRWA estimated that 91.8 percent of the 288 schools it operated in Gaza had been damaged.[25][24] Around 30,000 students had resumed in-person learning through UNRWA learning centers inside displacement shelters, while Gaza's government-run public-school system — which had served about 300,000 children before the war — remained closed.[25]

Gaza's healthcare system sustained severe damage and had recovered only marginally by the time of the ceasefire. Reports attributed to Doctors Without Borders and the Red Cross indicated that most hospitals in Gaza had been damaged and that those still operating were working at more than 300 percent of capacity, with critical shortages of medicines, antibiotics, surgical tools, and insulin.[4] Restrictions on evacuating wounded people outside Gaza further limited access to care.[4]

The World Bank–UN–EU assessment estimated that fewer than half of hospitals and less than 38 percent of primary healthcare centers were even partially functional at the time of its reporting; the cost of rebuilding the health system was estimated at $10.03 billion.[14] One year into the ceasefire, a Physicians for Human Rights Israel report found that 20 of Gaza's 36 hospitals were partially operational — an improvement from 14 at the ceasefire's start — but none was functioning at full capacity.[26] Gaza had 103 intensive-care beds in October 2025 and only 104 by July 2026.[26]

The Hamas-run Gaza Health Ministry reported that at least 1,570 patients died while awaiting medical evacuation between October 2023 and July 2, 2026, including 505 cancer patients and at least 264 children.[26] After October 7, 2023, Israel barred transfers from Gaza to hospitals in the West Bank — known by its original, indigenous Jewish name of Judea and Samaria — and East Jerusalem, permitting medical evacuations only to third countries; Israel's policy became the subject of a High Court petition, which the court declined to resolve at an interim stage in July 2026, instructing the state to provide an update by December 21, 2026.[26]

Sanitation and waste-management failures compounded health risks: the combination of inadequate resources to maintain remaining infrastructure and massive debris left people vulnerable to disease outbreaks.[14]

The war brought Gaza's economy to a near-complete halt. The U.S. State Department reported that almost all economic activity in Gaza had come to a standstill and that almost 100 percent of the population was unemployed — though without a Gaza-specific labor-force survey, the figure cannot be treated as a standard survey-derived unemployment rate.[27] All commercial exports from Gaza ceased after October 7, 2023, while imports faced heightened scrutiny.[27] World Bank and IMF figures cited in INSS analyses indicated that approximately 90 percent of local industry had ceased operations and approximately 80 percent of the employable population was jobless during the active phase of the war.[18]

GDP across the Palestinian territories — a wider figure that includes the West Bank — fell to $10.6 billion in 2024, a 28 percent decrease from the previous year.[27] Rebuilding Gaza to its prewar state was estimated by the World Bank–UN–EU assessment to require more than $71 billion over five years.[3] A RAND Corporation economist's estimate cited by CRS placed rebuilding costs potentially well above $80 billion when indirect and long-term costs — including a labor market affected by death, injury, and trauma — were included.[16] The Palestinian Authority presented a three-stage, five-year reconstruction plan valued at $67 billion: a $3.5 billion phase for immediate humanitarian needs and critical infrastructure, followed by a $30 billion phase over three years, and a final phase to complete reconstruction.[24] Financing remained unresolved, with talks still underway and private-sector funding being sought.[24]

The attack and subsequent war displaced hundreds of thousands of Israelis. About 60,000 Israelis were displaced from northern Israel as a result of Hezbollah rocket fire and border fighting, while communities near the Gaza border were also evacuated.[1] Together, the Hamas attack and Hezbollah attacks along Israel's northern border forced more than 200,000 Israelis from their homes.[28] Tourism Ministry figures reported that 68,712 evacuees had not yet returned home after a full year of war, most from northern communities.[29]

By late 2025, Israel's government Tekuma Directorate reported that more than 90 percent of residents of communities near the Gaza border had returned home, nearly two years after the October 7 attack.[30] The state allocated NIS 17.5 billion for a five-year rehabilitation plan covering housing, education, welfare, agriculture, and community resilience; five communities were still in temporary housing while rebuilding continued.[30] A Ministry of Finance briefing reported approximately 91 percent of Gaza Envelope community residents for whom a return date had been set had returned, though four communities had no return date and Nir Oz had none at all.[31]

The National Insurance Institute reported that more than NIS 5 billion in accommodation grants had been paid to more than 190,000 residents of the north and south, more than NIS 1.4 billion in return grants had gone to 110,000 people, and over NIS 750 million had been spent on rehabilitation services including vocational study, travel, rent support, and accessibility services.[8]

Mental health consequences were severe and widespread. Projections for the number of Israelis who might require mental-health treatment ranged from 300,000 (Taub Center) to 80,000–500,000 (Health Ministry) to as many as 3 million in a State Comptroller estimate — figures based on different methodologies and not directly comparable.[32] The State Comptroller reported that the mental-health system, already strained before October 7, collapsed in the first days of the war.[32]

A representative-sample study tracking Israeli responses across five measurement points found that at the time of its January 2025 report, 25.6 percent of respondents reported anxiety, 22.6 percent post-traumatic symptoms, and 29 percent depression; depression had peaked at 43 percent two months after October 7.[6] Among those surveyed, 50 percent reported significantly worsened sleep, 48 percent reduced ability to concentrate, and 59 percent a decline in their sense of mental calm.[6] Evacuees and reservists reported higher levels of anxiety, depression, post-traumatic symptoms, and burnout than other groups.[6] A separate peer-reviewed study comparing Israeli evacuees with a general-population sample found that evacuees reported lower societal and community resilience, lower hope and morale, and higher distress symptoms and perceived danger — while individual resilience did not differ — leading researchers to conclude that evacuees faced a disproportionately severe impact.[33]

Public worry extended well beyond immediate personal distress: 82 percent of survey respondents were worried about the country's general condition, 84 percent about its security situation, and 69 percent about their future economic situation.[6]

The war imposed an immediate and sustained economic shock on Israel. An early Bank of Israel estimate put the combined weekly cost of war-related absences from work — including reserve call-ups, school closures, and evacuations — at approximately NIS 2.3 billion, around 6 percent of weekly GDP.[4] Israel's GDP dropped 20.7 percent between October and December 2023, then expanded 3.35 percent in the first quarter of 2024 relative to the preceding quarter.[34] For 2024 as a whole, GDP grew by only 0.9–1.0 percent, against prewar estimates of 3.1–5.0 percent.[9][28] An Israeli State Comptroller audit estimated cumulative GDP damage in 2023–24 at approximately NIS 90 billion, with a further NIS 65–75 billion in anticipated damage for 2025.[9]

The Bank of Israel calculated that the cumulative gap in GDP relative to the pre-war trend had grown to more than 8 percent, or NIS 177 billion, by early 2026.[35] Extensive reserve recruitment, prolonged absences, and disruptions across industries damaged productive capacity, particularly labor supply — with the reported labor-supply shortfall equivalent to about 3.6 percent of the labor force.[35] Of that decline, 55 percent was attributed to lower participation and the absence of reservists and their spouses, and 35 percent to the absence of foreign workers.[35]

A Ministry of Finance estimate cited in INSS analysis put the economic cost of one reserve soldier at approximately NIS 48,000 per month.[18] The mobilization authorized at the outset — the largest in Israeli history, covering as many as 360,000 reservists — translated into call-ups amounting to roughly 8 percent of the labor force, disrupting manufacturing, agriculture, high technology, and logistics.[4][36] An average of 30,000 Israelis served in the reserves at any given point during 2025.[35] Roughly 100,000 Palestinian workers also became unavailable to Israeli employers after the war began, and about 15,000 foreign workers returned to their home countries, worsening labor shortages particularly in construction and agriculture.[36]

Direct government war expenditures through the end of 2025 were put at NIS 231 billion ($75.7 billion) by the Bank of Israel: NIS 166 billion for defense, NIS 27 billion in compensation for direct and indirect damage, and NIS 38 billion in other civilian expenses.[5] Those figures did not include lost tax revenue (estimated at approximately NIS 40 billion) or lost economic output (approximately NIS 177 billion), bringing the Bank of Israel's total cost estimate to NIS 405 billion ($132.8 billion) through the end of 2025.[5] The State Comptroller's audit put total military and civilian war costs for 2023–25 at approximately NIS 250 billion, covering multiple fronts.[9]

Military spending rose to 8.8 percent of GDP in 2024 from 5.4 percent in 2023, while public debt climbed from 61.5 percent of GDP at end-2023 to 67.8 percent at end-2024 and 68.5 percent by the close of 2025.[4] Israel raised NIS 278 billion in debt in 2024, compared with NIS 265 billion in 2020.[18] War-related spending contributed to significant budget deficits and credit downgrades in 2024, although Israel's debt retained investment-grade status.[28] The state paid approximately NIS 5.1 billion in housing grants to evacuees by the end of 2025.[31]

Tourism collapsed: the Tourism Ministry estimated losses of approximately NIS 18.7 billion in incoming tourism and NIS 756 million in domestic tourism during the first year of the war, with roughly 853,000 tourists entering Israel compared with 3 million entries in 2023.[29] Evacuation accommodation alone cost NIS 8.6 billion, including NIS 5.5 billion paid to hotels and NIS 3.2 billion in accommodation grants.[29]

A December 2024–January 2025 Israel Democracy Institute survey found that 19 percent of respondents who had been employed before the war were out of work, and a further 3 percent were serving in the reserves; about one-third of Israeli households reported reduced income since the war began, rising to 44 percent of households in the north, where business, tourism, and agriculture were severely affected.[37] Reservists' wives were also disproportionately affected: about 20 percent worked less than usual in 2025, compared with 10 percent of other employed women, and about 13 percent were temporarily absent from work on average, compared with roughly 8 percent of other employed women.[35]

Future costs will extend well beyond the active conflict. Defense spending could remain at least NIS 40 billion per year above its pre-war baseline, and reconstruction and civilian compensation could require several billion shekels annually for 10 to 20 years.[5]

The Gaza war was accompanied by escalation on multiple additional fronts. Hezbollah intensified cross-border attacks on Israel after October 7, 2023, forcing the displacement of northern Israeli communities and contributing to the broader economic and social burden on Israel.[1] Israel's war costs reflect simultaneous commitments across Gaza, Lebanon, the West Bank, Iran-related threats, and maritime approaches — and the economic statistics cited in this article generally cannot be attributed to the Gaza front in isolation.[4]

Fighting with Hezbollah generated its own heavy regional toll: more than 1.1 million people in Lebanon had been displaced by the end of March 2026, nearly one-fifth of that country's population.[38] Separate from the fighting in Lebanon, Houthi attacks on ships transiting the Red Sea disrupted global shipping lanes, extending the conflict's consequences into the international economy.[1]

The SAPIR Journal reported that the evacuation of northern Israeli residents had cost an estimated $2.34 billion as of September 2024. It separately reported roughly $1.5 billion in direct and indirect damage to northern Israel in November 2024 and more than $100 million in estimated losses from fires that burned approximately 75 square miles, excluding certain other military and security costs.[39]

The war coincided with an unusual shift in Israel's international migration balance. Demographer Sergio DellaPergola recorded approximately 80,000 departures in 2024, offset by about 30,000 returning Israelis and 30,000 new immigrants, producing a net annual deficit of approximately 18,000.[40] One possible interpretation offered was that the deficit was largely attributable to approximately 14,000 rapid departures following the October 2023 attacks; however, many Israelis returned soon after the attacks, and DellaPergola noted that the ultimate balance would depend partly on military developments and economic growth.[40] The deficit did not establish that the war alone caused all departures.

The war generated intense international debate and measurable social effects far beyond the region. In the United States, the ADL recorded 312 antisemitic incidents in the first several weeks of the conflict, compared with 64 in the same period in 2022; during a similar period, the Council on American-Islamic Relations recorded 774 Islamophobia complaints.[41] Campus protests, disruption, and safety concerns proliferated, alongside reported harassment, discrimination, and censorship directed at Muslim, Arab, and Palestinian students and faculty.[41]

Within Israel, public opinion on the war's costs was tracked by Tel Aviv University's Peace Index survey. In July 2025, 72 percent of Jewish respondents considered Palestinian casualties justified given the war's objectives, while 18 percent considered them unjustified; the same survey found that only 15 percent of Jewish respondents considered Israeli casualties justified and 73 percent considered them unjustified.[42] Among Arab respondents, 76 percent considered Palestinian casualties unjustified and 70 percent considered Israeli casualties unjustified.[42] Researchers noted a decline over time in the share of Jewish respondents who considered casualties on either side justified when compared with January 2024 responses.[42]

The path toward recovery in Gaza faced daunting practical, financial, and political obstacles. One year into the October 2025 ceasefire, 90 percent of Gaza's electricity infrastructure remained destroyed and unrestored, 71 percent of water and sanitation infrastructure had been damaged as of August 2026, and only 1 percent of rubble had been cleared from roads and essential facilities as of July 2026.[17] The World Bank–UN–EU assessment identified 68 million tons of debris contaminated with unexploded ordnance as a prerequisite challenge for any reconstruction.[22] Gaza's sole power plant had not resumed operation, and electricity generation depended on local generators and solar panels.[14]

Housing reconstruction had barely begun: 65 percent of Gaza's population remained in tents or makeshift shelters one year after the ceasefire.[17] Displaced people also faced the prospect that some homes were in areas under Israeli control.[14] The health system, while marginally improved, remained far from functional: no hospital had returned to full operation, and access to complex specialist care outside Gaza remained restricted.[26]

The INSS described the remaining humanitarian and infrastructure conditions as a major burden on future governance and recovery, estimating total rehabilitation needs at more than $70 billion.[22] CRS identified major political, security, and logistical obstacles to reconstruction — including establishing law and order and preventing a Hamas resurgence — as compounding the financial challenge.[16] The Palestinian Authority's $67 billion reconstruction plan required extensive debris removal before any rebuilding could begin, and the ultimate source of financing remained unclear.[24] For Israel, the State Comptroller's audit emphasized that prewar government planning had assumed a conflict of roughly one month; the actual duration and scope of the war far exceeded those assumptions, and the long-term costs in defense spending, community rehabilitation, and civilian compensation are projected to continue for years.[9]

Many of the most significant figures associated with the war are the subject of genuine dispute rather than settled fact. Palestinian casualty totals derive from the Hamas-run Gaza Health Ministry and are not independently verified; they do not distinguish combatants from civilians, differ by date and definition, and have been challenged by Israeli and other analysts who argue they omit methodological distinctions or include deaths from causes unrelated to Israeli fire.[1][11] Estimates of indirect deaths, including the Lancet study's figure of approximately 186,000, are modeled projections rather than individually confirmed counts.[13]

Reports of famine and food insecurity, and assessments of Israeli responsibility for restricting aid, are contested between humanitarian organizations on one side and Israeli officials on the other; COGAT's post-ceasefire data showing large food deliveries and falling prices represent the Israeli government's own accounting, while humanitarian organizations continued to report severe unmet needs and distribution failures.[19][20] The scale of Hamas diversion of humanitarian assistance was acknowledged but disputed as to magnitude.[19]

Damage and destruction figures across housing, infrastructure, and economic sectors use differing dates, methodologies, and reporting bodies; they should be understood as estimates reflecting conditions at a particular moment rather than a single definitive measurement.[23][14] The UN Commission of Inquiry's finding of reasonable grounds to conclude that Israel committed acts defined as genocidal under the Genocide Convention was an allegation by that body, not a court judgment, and Israel denied the allegation.[41] Economic cost totals for Israel vary significantly depending on whether they cover direct government expenditure only, include lost revenue and output, and whether they encompass the wider multi-front war or attempt to isolate Gaza's individual contribution — distinctions that should not be collapsed into a single figure.[9][5]