Will Netanyahu Clip the Wings of His New Cabinet Hawks?

Newly sworn-in Israeli Prime Minister Benjamin Netanyahu (R) chairs the first cabinet meeting of his new government in Jerusalem, on December 29, 2022. (AFP)
Newly sworn-in Israeli Prime Minister Benjamin Netanyahu (R) chairs the first cabinet meeting of his new government in Jerusalem, on December 29, 2022. (AFP)
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Will Netanyahu Clip the Wings of His New Cabinet Hawks?

Newly sworn-in Israeli Prime Minister Benjamin Netanyahu (R) chairs the first cabinet meeting of his new government in Jerusalem, on December 29, 2022. (AFP)
Newly sworn-in Israeli Prime Minister Benjamin Netanyahu (R) chairs the first cabinet meeting of his new government in Jerusalem, on December 29, 2022. (AFP)

One is a pistol-packing ex-member of an outlawed Jewish militant group. The other is a religious fundamentalist. Both are West Bank settlers averse to Palestinians' self-rule - let alone their hopes of statehood.

And as senior coalition partners to reelected Prime Minister Benjamin Netanyahu, Itamar Ben-Gvir and Bezalel Smotrich will be within reach of the levers of power - a troubling prospect for Israel's once-dominant secular-left and friends in the West.

Netanyahu turned to the ultra-nationalists after centrist parties boycotted him over his long-running corruption trial. He needs their support to stay in office as he argues his innocence in court. But he denies this spells pliability to their demands.

"I will navigate this government. The other parties are joining me. I'm not joining them," Netanyahu told Al Arabiya on Dec. 15, pledging to enforce "liberal rightist" policymaking.

Besides, he said, "a lot of them have changed and moderated their views, principally because with the assumption of power comes responsibility".

There may be precedent in Avigdor Lieberman, a firebrand whose 2006 appointment as deputy prime minister triggered much the same response as Ben-Gvir's rise: liberal warnings of civil war and, on Israel's top TV satire, his lampooning as a Nazi.

Lieberman proved to be politically adaptable. He served in various coalitions - one of which included an Islamist party - and ended up in the current opposition, from which he has scorned Netanyahu's new allies as "zealots and extremists".

Still, Lieberman could also play spoiler from the right. As Netanyahu's foreign minister in a previous government, he would publicly promote a harder line on the Palestinians than the premier's. In a later term, Lieberman resigned as Netanyahu's defense minister in protest at a Gaza truce he deemed too lax.

Netanyahu's conservative Likud party has now retained the defense and foreign ministries. But the optics around Ben-Gvir and Smotrich may yet prove combustible for him - for example, if either man visits or prays at Jerusalem's Al-Aqsa mosque compound, an icon of Palestinian nationalism which is also the holiest site for Judaism as vestige of its two ancient temples.

Netanyahu's previous 15 years as premier saw him feathering the nests of the hawks in his cabinet - or clipping their wings - as he deemed necessary. Back then, however, he had parties to his left to help him function as an ideological fulcrum.

"With all the parties in the incoming government situated to Netanyahu's right, it will be difficult for him to replicate that role this time," argued Yohanan Plesner, president of the Israel Democracy Institute think-tank. "Does he want to?"

Pacing themselves

On Ben-Gvir's and Smotrich's calls for West Bank annexations, Netanyahu is on record as being in favor while also avoiding action on the ground that would risk escalating into confrontations with Washington or Arab partners.

Yet Smotrich did carve out a cabinet niche for himself overseeing settlements, which most world powers deem illegal for taking occupied land that Palestinians want for a state.

"He can be effective in multiplying and consolidating Israel's presence in the West Bank," said Amotz Asa-El, research fellow at the Shalom Hartman Institute, noting Smotrich's high pace of infrastructure-building as a former transport minister.

For Ben-Gvir, by contrast, this is the first stint in government. As police minister, he will focus on law-and-order issues important to a swathe of Israelis, Asa-El predicted - including crime-hit Arabs against whom Ben-Gvir once agitated.

"After legitimating his position in broader Israeli circles, he will proceed to the realms that not all agree on - namely the West Bank," Asa-El said. But that may have to wait, as Ben-Gvir's portfolio does not grant major powers in the West Bank, which is under the overall control of the military.

Arguably, Ben-Gvir, 46, and Smotrich, 42, can afford to shelve some of their agendas for this round with Netanyahu, 73.

"But that's counting on restraint from people who come from very different ideological world-views than what we've seen in Israeli governments before," said Daniel Shapiro, a former US envoy to Israel and now Atlantic Council distinguished fellow.

Ben-Gvir came up through the Kahane Chai group, which is blacklisted in Israel and the United States for its virulently anti-Arab doctrines. Smotrich's advocacy of Jewish claims on the West Bank is informed by a doctrinaire faith in Bible prophesy.

Earlier generations of Israeli far-rightists in government "demonstrated an interest and capacity to engage in a genuine two-way dialogue with the United States and other international players, and seemed to recognize the limits on pursuing some of their most ideological positions," Shapiro said.

"It remains to be seen whether that approach will characterize members of the incoming coalition."

Alan Dershowitz, a prominent American-Jewish jurist who has advised US and Israeli leaders, said Ben-Gvir and Smotrich disavowed racism and homophobia in meetings with him this month.

"The word 'balance' came up a number of times" in their reassurances during the conversations, Dershowitz told Reuters.

"Obviously they were in some ways trying to get me to have a positive impression of them," he said. "Let's see what happens when I'm not in the room and the people in the room are pushing them to become more extreme. That's the litmus test."



To Get Their Own Cash, People in Gaza Must Pay Middlemen a 40% Cut

A destroyed branch of the Bank of Palestine in the Tal al-Hawa neighborhood of Gaza City is seen Wednesday, July 9, 2025. (AP)
A destroyed branch of the Bank of Palestine in the Tal al-Hawa neighborhood of Gaza City is seen Wednesday, July 9, 2025. (AP)
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To Get Their Own Cash, People in Gaza Must Pay Middlemen a 40% Cut

A destroyed branch of the Bank of Palestine in the Tal al-Hawa neighborhood of Gaza City is seen Wednesday, July 9, 2025. (AP)
A destroyed branch of the Bank of Palestine in the Tal al-Hawa neighborhood of Gaza City is seen Wednesday, July 9, 2025. (AP)

Cash is the lifeblood of the Gaza Strip’s shattered economy, and like all other necessities in this war-torn territory — food, fuel, medicine — it is in extremely short supply.

With nearly every bank branch and ATM inoperable, people have become reliant on an unrestrained network of powerful cash brokers to get money for daily expenses and commissions on those transactions have soared to about 40%.

"The people are crying blood because of this," said Ayman al-Dahdouh, a school director living in Gaza City. "It’s suffocating us, starving us."

At a time of surging inflation, high unemployment and dwindling savings, the scarcity of cash has magnified the financial squeeze on families — some of whom have begun to sell their possessions to buy essential goods.

The cash that is available has even lost some of its luster. Palestinians use the Israeli currency, the shekel, for most transactions. Yet with Israel no longer resupplying the territory with newly printed bank notes, merchants are increasingly reluctant to accept frayed bills.

Gaza’s punishing cash crunch has several root causes, experts say.

To curtail Hamas’ ability to purchase weapons and pay its fighters, Israel stopped allowing cash to enter Gaza at the start of the war. Around the same time, many wealthy families in Gaza withdrew their money from banks and then fled the territory. And rising fears about Gaza’s financial system prompted foreign businesses selling goods into the territory to demand cash payments.

As Gaza’s money supply dwindled and civilians’ desperation mounted, cash brokers' commissions — around 5% at the start of the war — skyrocketed.

Someone needing cash transfers money electronically to a broker and moments later is handed a fraction of that amount in bills. Many brokers openly advertise their services, while others are more secretive. Some grocers and retailers have also begun exchanging cash for their customers.

"If I need $60, I need to transfer $100," said Mohammed Basheer al-Farra, who lives in southern Gaza after being displaced from Khan Younis. "This is the only way we can buy essentials, like flour and sugar. We lose nearly half of our money just to be able to spend it."

In 2024, inflation in Gaza surged by 230%, according to the World Bank. It dropped slightly during the ceasefire that began in January, only to shoot up again after Israel backed out of the truce in March.

Cash touches every aspect of life in Gaza

About 80% of people in Gaza were unemployed at the end of 2024, according to the World Bank, and the figure is likely higher now. Those with jobs are mostly paid by direct deposits into their bank accounts.

But "when you want to buy vegetables, food, water, medication -- if you want to take transportation, or you need a blanket, or anything — you must use cash," al-Dahdouh said.

Shahid Ajjour’s family has been living off of savings for two years after the pharmacy and another business they owned were ruined by the war.

"We had to sell everything just to get cash," said Ajjour, who sold her gold to buy flour and canned beans. The family of eight spends the equivalent of $12 every two days on flour; before the war, that cost less than $4.

Sugar is very expensive, costing the equivalent of $80-$100 per kilogram (2.2 pounds), multiple people said; before the war, that cost less than $2.

Gasoline is about $25 a liter, or roughly $95 a gallon, when paying the lower, cash price.

Bills are worn and unusable

The bills in Gaza are tattered after 21 months of war.

Money is so fragile, it feels as if it is going to melt in your hands, said Mohammed al-Awini, who lives in a tent camp in southern Gaza.

Small business owners said they were under pressure to ask customers for undamaged cash because their suppliers demand pristine bills from them.

Thaeir Suhwayl, a flour merchant in Deir al-Balah, said his suppliers recently demanded he pay them only with brand new 200-shekel ($60) bank notes, which he said are rare. Most civilians pay him with 20-shekel ($6) notes that are often in poor condition.

On a recent visit to the market, Ajjour transferred the shekel equivalent of around $100 to a cash broker and received around $50 in return. But when she tried to buy some household supplies from a merchant, she was turned away because the bills weren’t in good condition.

"So the worth of your $50 is zero in the end," she said.

This problem has given rise to a new business in Gaza: money repair. It costs between 3 and 10 shekels ($1-$3) to mend old bank notes. But even cash repaired with tape or other means is sometimes rejected.

People are at the mercy of cash brokers

After most of the banks closed in the early days of the war, those with large reserves of cash suddenly had immense power.

"People are at their mercy," said Mahmoud Aqel, who has been displaced from his home in southern Gaza. "No one can stop them."

The war makes it impossible to regulate market prices and exchange rates, said Dalia Alazzeh, an expert in finance and accounting at the University of the West of Scotland. "Nobody can physically monitor what’s happening," Alazzeh said.

A year ago, the Palestine Monetary Authority, the equivalent of a central bank for Gaza and the West Bank, sought to ease the crisis by introducing a digital payment system known as Iburaq. It attracted half a million users, or a quarter of the population, according to the World Bank, but was ultimately undermined by merchants insisting on cash.

Israel sought to ramp up financial pressure on Hamas earlier this year by tightening the distribution of humanitarian aid, which it said was routinely siphoned off by militants and then resold.

Experts said it is unclear if the cash brokers’ activities benefit Hamas, as some Israeli analysts claim.

The war has made it more difficult to determine who is behind all sorts of economic activity in the territory, said Omar Shabaan, director of Palthink for Strategic Studies, a Gaza-based think tank.

"It's a dark place now. You don't know who is bringing cigarettes into Gaza," he said, giving just one example. "It's like a mafia."

These same deep-pocketed traders are likely the ones running cash brokerages, and selling basic foodstuffs, he said. "They benefit by imposing these commissions," he said.

Once families run out of cash, they are forced to turn to humanitarian aid.

Al-Farra said that is what prompted him to begin seeking food at an aid distribution center, where it is common for Palestinians to jostle over one other for sacks of flour and boxes of pasta.

"This is the only way I can feed my family," he said.