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Gaza War Becomes Cash Surge for US Weapons Makers

An Israeli F-16 carrying air-to-air missiles and extra fuel tanks takes off from an air base (Israel Defense Forces)
An Israeli F-16 carrying air-to-air missiles and extra fuel tanks takes off from an air base (Israel Defense Forces)
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Gaza War Becomes Cash Surge for US Weapons Makers

An Israeli F-16 carrying air-to-air missiles and extra fuel tanks takes off from an air base (Israel Defense Forces)
An Israeli F-16 carrying air-to-air missiles and extra fuel tanks takes off from an air base (Israel Defense Forces)

Israel’s war in Gaza, which erupted in October 2023, has become one of the most profitable conflicts for major US defense contractors.

As Gaza was being devastated and hundreds of thousands of civilians faced death and starvation, weapons factories across several US states were running at full capacity to meet Israel’s expanding military demands, generating more than 32 billion dollars in sales in just two years, according to a Wall Street Journal analysis based on US State Department data.

After the Hamas attack on southern Israel on October 7, 2023, and the large-scale Israeli military campaign that followed, Washington moved quickly to open an unprecedented weapons pipeline that included precision-guided munitions, long-range missiles, fighter jets and field equipment.

While Israel typically receives around 3.3 billion dollars in annual military assistance, that figure doubled in 2024 to 6.8 billion dollars in direct funding, not including non-cash support such as logistics, training and intelligence coordination.

A US State Department spokesperson said the Trump administration remains committed to Israel’s right to defend itself, adding that Washington is currently leading a regional effort to end the war through lasting security arrangements.

But despite talk of a “possible end” to the conflict, Pentagon data show that weapons production lines in US factories have not slowed and that supply contracts run through 2029, meaning arms deliveries to Israel will continue even after the fighting stops.

Who is benefiting most?

Boeing sits at the top of the list of beneficiaries after securing a 18.8 billion dollar deal to sell upgraded F-15 fighter jets to Israel, with delivery expected in four years.

The company also won an additional 7.9 billion dollars in contracts to supply Tel Aviv with guided bombs and associated weapons systems. These deals alone represent a major leap compared with Israel’s previous commitments to Boeing, which totaled less than 10 billion dollars over an entire decade.

Northrop Grumman, Lockheed Martin and General Dynamics secured specialized contracts for fighter jet spare parts, precision missiles and 120-millimeter tank rounds used in Merkava tanks.

Caterpillar benefited from soaring demand for its armored D9 bulldozers, widely deployed by the Israeli military to destroy homes and infrastructure in the enclave.

According to the US Defense Security Cooperation Agency, most of the deals are concentrated in aerial munitions and attack aircraft, while ground systems such as tanks and armored vehicles represent a far smaller share of total sales.

War as an economic opportunity

The conflict has not only been a military campaign, it also served as an economic boost for the US defense sector, which in recent years struggled with supply chain disruptions and labor strikes.

Boeing said in its 2024 annual report that its defense division saw strong demand from governments prioritizing security and defense technology amid rising threats.

Lockheed Martin reported a 13 percent increase in missile division revenues, reaching 12.7 billion dollars in a single year.

Oshkosh, which produces tactical military vehicles, said Israel’s orders saved a production line that was close to shutting down last year. Italy’s Leonardo Group, whose US unit sells military trailers to Israel, said in its latest financial report that the continuation of the conflicts in Ukraine and Israel ensures stable international sales for 2025.

The cost of war and who pays the price

Although the billions flowing through arms deals reflect a boom for the US defense industry, the humanitarian and political dimensions of the conflict have fueled debate in the United States and abroad.

The war has killed more than 68,000 people, including about 18,000 children, according to the Gaza Health Ministry. Israel has not released any official figures on the number of Hamas fighters killed.

As Washington funds a significant share of these sales with US taxpayer money, some Western financial institutions have started taking protest measures.

Three Norwegian funds withdrew investments from companies such as Caterpillar, Oshkosh and Palantir over the use of their products in Gaza. The Dutch pension fund sold its 448 million dollar stake in Caterpillar for the same reasons.

In Europe, Germany announced in August 2025 a halt to all arms export licenses to Israel for use in Gaza. US technology companies also faced internal pressure, prompting Microsoft to restrict the Israeli Defense Ministry’s access to some of its cloud services.

Artificial intelligence on the battlefield

Alongside conventional weapons, the war created a wider arena for cooperation on artificial intelligence and digital surveillance. Palantir, owned by conservative billionaire Peter Thiel, entered a partnership with the Israeli Defense Ministry in early 2024. After criticism that its tools were being used in airstrikes, CEO Alex Karp responded by saying that most of those killed “were terrorists,” in his words.

Israel also signed pre-war agreements with Google, Amazon and Microsoft for advanced cloud computing services, and all three companies have faced growing employee protests calling for an end to military cooperation.

In an unusual twist, some of the same US firms supplying Israel with weapons also participate in humanitarian relief programs for Gaza.

The US State Department allocated 30 million dollars to the Gaza Humanitarian Foundation, overseen by former Trump adviser Johnnie Moore, to coordinate aid distribution in the enclave.

The foundation hired American security contractors to protect its operations amid chaos and allegations of poor organization.

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Arab World

Sadr Says Armed Wing to Join Iraqi Gov’t

An Iraqi man walks past a poster of Moqtada al-Sadr wearing Saraya al-Salam military uniform on a street in Baghdad (AFP)
An Iraqi man walks past a poster of Moqtada al-Sadr wearing Saraya al-Salam military uniform on a street in Baghdad (AFP)
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Sadr Says Armed Wing to Join Iraqi Gov’t

An Iraqi man walks past a poster of Moqtada al-Sadr wearing Saraya al-Salam military uniform on a street in Baghdad (AFP)
An Iraqi man walks past a poster of Moqtada al-Sadr wearing Saraya al-Salam military uniform on a street in Baghdad (AFP)

Shiite cleric Moqtada al-Sadr, leader of the Sadrist movement, said on Wednesday he had decided to sever his movement’s ties with its armed wing, Saraya al-Salam, and place its members under the authority of the state, in a move that comes amid political and government efforts to restrict weapons to the state and regulate the work of armed factions in Iraq.

Sadr had previously announced that he was dissolving his armed wing, but his latest position coincides with the arrival of a government working under regional and international pressure to disarm armed factions.

Observers said Sadr’s latest decision carries weight because it hands his Saraya al-Salam fighters over to the authority of the new prime minister, Ali al-Zaidi.

“It has become necessary for us to announce the complete separation of Saraya al-Salam from the movement and their full integration into the state and the general authority responsible for military formations, provided that the civilian bodies attached to Saraya al-Salam are transformed into Al-Bunyan al-Marsous, with no offices, weapons, uniforms, titles or anything else,” Sadr said in a statement.

“In the end, I can only thank the military formations of Saraya al-Salam for all their jihad, and may God forgive them,” he added.

Saraya al-Salam is part of the Popular Mobilization Forces through brigades 313, 314, and 315. It carries out security duties across several areas, most notably in Samarra.

Sadr called on “the remaining factions in the Popular Mobilization Forces to separate themselves from partisan and sectarian orders” and urged them to hand over their weapons to the state, saying he had offered such advice years earlier.

Government welcomes move

In a swift response, Iraqi Prime Minister Ali al-Zaidi welcomed the move, describing it as “an important path toward strengthening internal stability and consolidating the principle of restricting weapons to the state.”

Zaidi said in a statement that the current phase “requires unifying efforts and placing the higher national interest first.” He called on all armed factions to work under the umbrella of the state and its official institutions, stressing that the state “is the only authority authorized to carry weapons and enforce the law.”

Sadr’s announcement comes as the Iraqi government seeks to implement a program to restrict weapons to the state, a pledge included in the current government’s ministerial program, alongside discussions within the Coordination Framework over mechanisms to regulate and hand over weapons.

Sources said some factions had shown relative “flexibility” on the issue compared with their previous, more hardline positions, while others still reject including what they call “resistance weapons” in any disarmament measures.

It is widely rumored that five armed factions have agreed to place their weapons under government institutions, without clear details on how the possible process would be carried out, while Harakat al-Nujaba and Kataib Hezbollah have refused to comply with disarmament requests.

Nazim al-Saidi, head of the executive council of Harakat al-Nujaba, said earlier this month that measures to restrict weapons target “uncontrolled” arms that cause “chaos,” not “resistance weapons.”

Former lawmaker Sajjad Salem questioned whether the decision could be implemented, saying Sadr had previously announced the separation of Saraya al-Salam from the movement, “but the decision was not carried out.”

Salem said armed factions rely on weapons to secure their political and financial influence, adding that the Sadrist movement “has an exceptional ability to organize and mobilize with almost no resources,” a reference to the difficulty other factions may face in giving up their weapons.

Former Prime Minister Mustafa al-Kadhimi also commented on the move, saying the decision “stems from a high level of concern for the supreme national interest, and from a deep awareness of the need to push toward strengthening the path of the state and its institutions.” He described it as “a position worthy of praise and welcome.”

The leader of Asaib Ahl al-Haq also paved the way for the handover of his weapons. On Wednesday, he stressed that his political project supports “the state, sovereignty and stability, not a project of chaos,” as he put it.

Qais al-Khazali said in press remarks that “the current phase requires moving toward consolidating state institutions and strengthening their role in confronting internal and external challenges.”

Disarmament plan

Asharq Al-Awsat reported on May 9, 2026, that an Iraqi committee, including Prime Minister-designate Ali al-Zaidi, outgoing Prime Minister Mohammed Shia al-Sudani, and Hadi al-Amiri was working to complete an “executive project” to disarm armed factions before presenting it to Washington, amid mounting US pressure to keep militias away from the new government and state institutions.

The committee had presented militia leaders with “ideas on how to disarm,” but some meetings “did not pass calmly,” according to people familiar with the matter.

The plan includes removing heavy and medium weapons and restructuring the Popular Mobilization Forces, in parallel with expected changes in sensitive security agencies, which could include the intelligence service.

But political sources questioned the government’s ability to implement the project, saying it may be intended to “buy time.” In contrast, prominent factions, including Kataib Hezbollah and Harakat al-Nujaba, have said they reject handing over their weapons “whatever the cost.”

Arab World

Yemen Transport Minister Says Two Arabian Sea Ports Planned

A view of Aden International Airport earlier this year (Reuters)
A view of Aden International Airport earlier this year (Reuters)
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Yemen Transport Minister Says Two Arabian Sea Ports Planned

A view of Aden International Airport earlier this year (Reuters)
A view of Aden International Airport earlier this year (Reuters)

The Yemeni government is betting that rebuilding the transport sector can help revive an economy battered by more than a decade of war that has left airports, ports and roads badly damaged.

Yemeni Transport Minister Mohsen al-Amri told Asharq Al-Awsat that rebuilding the sector “requires resources, capabilities, investments and effective partnerships with donors, international institutions and the private sector.”

Al-Amri said the ministry was working under “a phased vision” to expand airport capacity and reconnect Yemeni governorates with the region and the wider world. It is also seeking to develop two ports on the Arabian Sea “to improve logistics services, support maritime trade and connect coastal areas to regional and international trade routes,” he said.

The Houthi group, meanwhile, has limited itself to estimating the sector’s losses without acknowledging responsibility.

Al-Amri said the damage since the start of the war had been extensive across air, sea and land transport.

“We cannot determine any figures in this regard at the present time, and there is no doubt that rebuilding Yemen’s transport sector requires resources, capabilities and investments with the private sector,” he said.

The minister praised Saudi Arabia’s continued support across several fields, including transport, saying its impact was reflected in improved services.

The Houthi group issued a report several days ago, presented at an event attended by some of its leaders, putting cumulative war damage and losses across transport sectors at $23.2 billion.

It claimed it could restore the operational readiness of damaged facilities in areas under its control within weeks, but did not set out a strategy.

Reconnecting Yemen

Recent moves by Yemen’s Transport Ministry point to a broader government push to rehabilitate airports and ports and increase the capacity of air and sea gateways. The government says the plan aims to turn Yemen into a hub linking international trade corridors, drawing on its strategic location.

Al-Amri said the ministry was pursuing a phased plan to turn several local airports into international airports, including Al-Ghaydah in the eastern governorate of Al-Mahra, Ataq in the central governorate of Shabwa and Mokha in the southwestern governorate of Taiz.

The plan also includes upgrading Seiyun airport in the east and Socotra airport in the south, with the aim of “linking Yemeni governorates to the regional and international spheres.”

The government is also seeking to revive maritime transport through new port projects, led by Qarma port on Socotra island in the Indian Ocean and Brom port in the eastern governorate of Hadramout.

Al-Amri described the two ports as “strategic projects” that would ease pressure on main ports, improve logistics, stimulate maritime trade and connect coastal areas to regional and international trade routes.

He said the ministry sets transport project priorities based on population density, economic importance, development and service impact, and the ability to facilitate the movement of people, trade and aid. Project readiness and financing prospects are also considered, he said, along with the goal of balancing development among governorates and directing resources by priority.

In recent weeks, the Transport Ministry has stepped up foreign outreach through talks and cooperation agreements with the European Union, the International Civil Aviation Organization, Morocco and Egypt. The aim is to secure technical and professional support to develop airports and ports, train personnel and modernize air navigation systems.

Al-Amri said the government does not see transport development as a services project alone, but as part of a wider plan to restore state institutions and strengthen their economic role.

Houthi denial

The Yemeni government expects its plans to help move Yemen from a country exhausted by war into a hub linking international trade corridors, using its position on the Red Sea, the Gulf of Aden and the Arabian Sea. It also expects the plans to cut transport and insurance costs, stimulate trade, attract private investment and support economic recovery.

By contrast, the Houthi group’s claims and loss estimates expose the depth of deterioration in one of the most vital sectors under its control, whether from its use of facilities and installations as military bases and barracks, or from attacks linked to escalation in the Red Sea and against Israel.

According to the group’s figures, losses at the ports of Hodeidah, Al-Salif and Ras Isa on Yemen’s western coast exceeded $8.7 billion. Airport losses topped $2 billion, with major airports knocked out of service, Sanaa International Airport damaged, thousands of kilometers of roads destroyed and more than 100 bridges wrecked.

The group has avoided acknowledging responsibility for destroying these facilities and damaging the sector, particularly after it detained four Yemenia Airways aircraft at Sanaa airport. The planes were destroyed by Israeli airstrikes last May in response to Houthi missile attacks.

The gap between government development plans and Houthi loss figures shows that transport has become one of the central arenas for rebuilding the Yemeni state. Reopening airports and ports is not just about improving services. It is about restoring key tools of economic sovereignty, easing the movement of trade and aid, and reconnecting Yemen’s regions with one another and with regional and international markets.

Arab World

Israel Tests Nabatieh Defenses, Seeks to Isolate the City in South Lebanon

Smoke rises from Beaufort Castle following strikes, as seen from Marjayoun, southern Lebanon, May 27, 2026. REUTERS/Stringer
Smoke rises from Beaufort Castle following strikes, as seen from Marjayoun, southern Lebanon, May 27, 2026. REUTERS/Stringer
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Israel Tests Nabatieh Defenses, Seeks to Isolate the City in South Lebanon

Smoke rises from Beaufort Castle following strikes, as seen from Marjayoun, southern Lebanon, May 27, 2026. REUTERS/Stringer
Smoke rises from Beaufort Castle following strikes, as seen from Marjayoun, southern Lebanon, May 27, 2026. REUTERS/Stringer

The Israeli army made on Wednesday further incursions around the southern Lebanese city of Nabatieh beyond the Israeli-declared "yellow line” while increasing airstrikes up to 20 kilometers from the border and forcing the full evacuation of towns around the city.

The advance followed Israeli threats to expand beyond the yellow line and coincided with what Israel’s Channel 14 described as the widespread, systematic destruction of more than 10,000 buildings in southern Lebanese border villages, about 70% of the structures Israel plans to demolish in the area.

“We are expanding our operations in Lebanon to deepen the scale of the damage we are inflicting on Hezbollah,” Israeli army Chief of Staff Eyal Zamir said on Wednesday.

Hayat Al-Aqleh embraces her 18-month-old son Ali at Jabal Amel Hospital in the southern port city of Tyre, Lebanon, Wednesday, May 27, 2026, after he underwent head surgery for injuries sustained in an Israeli airstrike a day earlier in the village of Charnay near Tyre. (AP Photo/Mohammad Zaatari)

New push north of the river

Israeli forces entered eastern Zawtar, a town on the northern bank of the Litani, advancing on its outskirts as they sought to reach the strategic Beaufort Castle east of Nabatieh.

The castle overlooks, from the east, Lebanese towns under Israeli occupation, as well as northern Israeli settlements less than 10 kilometers away. Israel has placed the castle and the towns of Zawtar, Arnoun and Yohmor al-Shaqif within the yellow line, although they lie north of the Litani.

Local sources in southern Lebanon told Asharq Al-Awsat that Israeli forces sent unmanned vehicles deep into an area near Mayfadoun to probe defenses and reconnaissance capabilities.

They said the move pointed to attempts to push toward the hills south of Nabatieh, especially Mayfadoun and Shawkin, to isolate the city, which was placed under a full evacuation warning on Wednesday for a second day in a row.

The sources said airstrikes intensified on Beaufort Castle and nearby Yohmor, Kfar Tebnit and Arnoun, areas overlooking Nabatieh from the east.

The Israeli army gave no details on the fighting.

In a statement sent in response to a question from Agence France Presse and attributed to a military official, the army said it was operating in a targeted manner beyond the forward defense line to eliminate direct threats to the citizens of the State of Israel and to soldiers ... in accordance with directives from the political leadership.

Specific details regarding the locations of soldiers cannot be provided, the official said.

Clashes at point-blank range

In a statement Wednesday, Hezbollah said its fighters "clashed with the enemy forces at point-blank range" with light and medium weapons in the town of Zawtar al-Sharqiyah.

Since dawn on Tuesday, Hezbollah had said it targeted Israeli forces trying to enter the town with rocket-propelled grenades and explosive drones. It later said its fighters fired rockets and drones at Israeli forces on the town’s outskirts and near its entrance by the riverbed.

Al-Manar, Hezbollah’s television channel, said Israeli forces were moving along three axes on the outskirts of Zawtar al-Sharqiyah from the Hamra side. It said clashes were underway at three points, but denied that Israeli forces had advanced toward Mayfadoun or the inner neighborhoods of Zawtar al-Sharqiyah.

The town’s position north of the Litani gives it strategic significance due to its proximity to Nabatieh, southern Lebanon’s largest city. Israel accuses Hezbollah of violating the ceasefire.

Zawtar al-Sharqiyah lies next to the yellow line that the Israeli army drew last month in southern Lebanon. The line runs around 10 kilometers deep inside Lebanese territory and where residents have been warned not to return.

The advance into the town coincided with an Israeli army statement on Tuesday saying it was “operating in a targeted manner beyond the forward defense line to eliminate direct threats to the citizens of the State of Israel and to soldiers.”

Emptying Nabatieh’s surroundings

As it tries to advance, Israel is also working to isolate Nabatieh and its surroundings by expanding the fire-enforced buffer zone to nearly 20 kilometers from the border.

Field sources in southern Lebanon told Asharq Al-Awsat that the line of fire had been cleared to Doueir, where no one can now enter, including ambulances, which need permission from the so-called mechanism - an internationally brokered monitoring committee established to oversee the ceasefire - to access the town.

Civil defense members search for victims in the rubble of a residential building hit the previous day by an Israeli strike near the southern town of Burj al-Shamali, on the outskirts of Tyre, on May 27, 2026.(Photo by KAWNAT HAJU / AFP)

The sources said the evacuation sweep covered Doueir, Harouf, Jebchit, Zebdine, Toul, Kfar Jouz, Deir al-Zahrani, Habboush, Kfar Roummane, Mayfadoun and Shawkin. It also included towns north of the river, southwest of Nabatieh, overlooking the Litani’s bank.

The developments came hours after evacuation warnings on Tuesday covered about 50 Lebanese villages and towns, including all towns in the districts of Bint Jbeil, Marjayoun and Tyre, as well as a large part of the Nabatieh district.

The Israeli army carried out about 150 airstrikes on Tuesday, killing 31 people and wounding 40, according to Lebanon’s Health Ministry. The ministry said 14 people were killed in Burj al-Shamali near Tyre.

On Wednesday, the bombing expanded into the Zahrani district, hitting Tafahta, as well as large parts of villages around Nabatieh. Lebanon’s official National News Agency said a strike near Nabih Berri Governmental Hospital caused “major damage to hospital wards.”