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Wartime Innovation Spurs Israeli Defence Tech Surge Amid Global Demand

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Amid the ongoing conflict in Gaza and growing geopolitical instability, Israel’s defence technology sector is experiencing a dramatic acceleration, driven by battlefield innovation and global demand. Civilian reservists with tech backgrounds, such as Zach Bergerson, are creating new startups in response to real-time battlefield needs—merging military insight with cutting-edge innovation.

Bergerson’s company, SkyHoop, which developed a wearable drone-detection system for soldiers, is now being piloted in Ukraine and is in talks for a potential U.S. Department of Defense trial. His story is emblematic of a broader trend: Israeli startups, born from frontline experiences, are attracting significant investment from both Israeli and American venture capital firms, many of whom had previously avoided defence tech due to regulatory risks.

According to Startup Nation Central, over one-third of Israel’s defence startups were founded after the October 7, 2023 Hamas attack that ignited the current war. The surge in wartime innovation has generated strong interest from Europe, especially as countries increase defence spending under NATO’s new mandate to raise defence budgets to 5% of GDP.

Lital Leshem, a reservist and co-founder of the new $100 million fund Protego Ventures, noted that Israeli tech professionals returning from the battlefield are creating companies to solve problems they directly experienced. Her fund has reviewed over 160 defence startups and expects to invest in a select few by the end of the year.

Israel’s defence exports reached a record $14.8 billion in 2024, with Europe accounting for over 50%—up from 35% the year before. Demand has spiked as European countries replace old systems sent to Ukraine and seek combat-tested, high-tech solutions. However, this boom comes alongside political backlash: calls for boycotts over Israel’s actions in Gaza have intensified, with over 57,000 Palestinians reported killed by local health officials, most of them civilians.

Despite global criticism, many nations continue to prioritize performance over politics when it comes to defence acquisitions. Reserve Brigadier General Yair Kulas, head of Israel’s International Defence Cooperation Directorate, acknowledged the tension between Israel’s innovation reputation and growing international delegitimization, especially in light of the Gaza humanitarian toll.

Analysts like Avi Hasson from Startup Nation Central believe this moment mirrors the tech boom of the early 2000s, when military innovations laid the groundwork for the smartphone era. Major Israeli defence firms—Elbit, Rafael, and Israel Aerospace Industries—are now eyeing startups for potential acquisitions or rapid internal development to keep pace with the evolving market.

As the war reshapes global defence priorities, Israel’s battlefield-tested startups may find themselves at the forefront of a new global arms innovation wave—if they can overcome regulatory and political hurdles.

U.S. Diplomacy Falters in the Middle East as Biden’s Time Runs Out

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As President Joe Biden’s term nears its end, his administration faces mounting challenges in the Middle East. U.S. diplomatic efforts to broker a ceasefire in Gaza have stalled after nearly a year of fighting between Israel and Hamas, and attacks on Red Sea shipping by Iran-backed Houthi rebels continue unabated. Meanwhile, a potential Israel-Hezbollah conflict looms, threatening to escalate into a regional war despite intense U.S. diplomatic efforts.

Biden’s Middle East strategy has centered on balancing Israel’s right to self-defense with efforts to prevent broader civilian casualties and regional conflict. However, this approach has repeatedly fallen short. Israel’s rejection of a U.S.-backed proposal for a 21-day truce on the Lebanon border is a stark reminder of the limits of U.S. influence in the region. As Jonathan Panikoff, a former U.S. intelligence officer, notes, Biden has struggled to leverage America’s diplomatic and military power to sway Israeli Prime Minister Benjamin Netanyahu.

Despite Secretary of State Antony Blinken’s multiple trips to the region, negotiations have failed to bring about a lasting ceasefire between Israel and Hamas, with no breakthrough on the horizon. The blame is shared between Hamas and shifting demands from Netanyahu, according to U.S. officials. The strained relationship between Blinken and Israeli leaders underscores the friction in Biden’s Middle East policy.

Biden’s efforts have not gone unnoticed by his Western allies, who credit him with strengthening key alliances, particularly in NATO and with Asian partners. However, his handling of the Middle East, particularly in Gaza, has raised concerns about U.S. credibility. Some foreign diplomats argue that Biden’s unyielding support for Israel has hindered his diplomatic flexibility. A Middle Eastern diplomat remarked that while Biden dispatched military assets to warn Iran and its proxies, the threats have not fully deterred attacks, particularly by the Houthis in Yemen.

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Analysts like Michael Mulroy, a former U.S. defense official, argue that Biden could have responded more decisively to these proxy attacks. Although U.S. officials defend their diplomatic efforts, emphasizing that progress takes time, the growing discontent among regional players reflects the difficulty of Biden’s position.

The Gaza conflict has dashed Biden’s hopes for a potential breakthrough in Middle East peace – the normalization of relations between Israel and Saudi Arabia. That deal, once seen as a possible highlight of his foreign policy legacy, now seems elusive.

At the United Nations, frustration is mounting. Jordanian Foreign Minister Ayman Safadi criticized international efforts as “a year of failure,” arguing that Israel is not listening to even its closest allies, including the U.S.

With four months left in office, Biden faces deepening crises in Lebanon and the wider region. Hezbollah and Israel continue to clash, and the threat of a full-scale ground war looms. Should this occur, it could not only mar Biden’s foreign policy legacy but also impact the 2024 U.S. presidential election, where Vice President Kamala Harris might face backlash from progressive Democratic voters already critical of Biden’s unwavering support for Israel.

Analysts like Panikoff assert that Biden’s Middle East strategy requires a shift. “Plan A hasn’t worked for months. So where’s Plan B?” As the clock runs out on Biden’s administration, the question remains whether the crises in Gaza, Lebanon, and beyond will define his presidency or be passed to his successor.

Lebanon Appeals to U.S. Amid Rising Israel-Hezbollah Conflict

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Amid escalating cross-border strikes between Israel and Hezbollah, Lebanon has called on the United States to intervene and stop the fighting, warning that the situation could spiral into full-scale war. On Tuesday, an Israeli airstrike in Beirut killed Hezbollah commander Ibrahim Qubaisi, heightening tensions and sparking fears of regional destabilization. Qubaisi, a key figure in Hezbollah’s missile and rocket force, was targeted amid an ongoing Israeli offensive that has killed over 569 people, including 50 children, and injured 1,835 in Lebanon, according to the Lebanese Health Minister.

The violence follows nearly a year of conflict between Israel and Hamas in Gaza, with fears growing that Hezbollah, an ally of Hamas, could further draw Lebanon into the conflict. The U.N. Security Council is set to meet on Wednesday to address the crisis. U.N. Secretary General Antonio Guterres warned that Lebanon was “at the brink,” stressing that a conflict in Lebanon could have catastrophic consequences similar to Gaza.

U.S. President Joe Biden, speaking at the U.N. General Assembly, called for restraint, noting that “full-scale war is not in anyone’s interest.” However, Lebanese Foreign Minister Abdallah Bou Habib criticized Biden’s remarks, urging stronger U.S. intervention and highlighting that Washington is key to halting the violence due to its close alliance with Israel.

Meanwhile, the humanitarian crisis in Lebanon is worsening. Displaced civilians from southern Lebanon are taking refuge in schools and shelters across Beirut. At a shelter in Bir Hassan, volunteers provided basic supplies for displaced families. Amid the growing toll, half a million people have been displaced, with many civilians struggling under extreme conditions.

Hezbollah and Israel continue to trade strikes. Israeli Defense Minister Yoav Gallant stated that Hezbollah had suffered significant losses, while Hezbollah claimed responsibility for attacks on Israeli military bases and launched drones at Israel’s Atlit naval base. The conflict shows no sign of abating, with diplomatic efforts from the U.S., Qatar, and Egypt failing to secure a ceasefire.

As international pressure mounts, Iranian President Masoud Pezeshkian called for a permanent ceasefire in Gaza and an end to what he described as Israeli “barbarism” in Lebanon. Israel, for its part, continues its air campaign, targeting Hezbollah and other Iranian-aligned groups in Syria. The situation remains volatile, with concerns that continued fighting could engulf the region in broader conflict.