One of Israel’s most polluted sites sits just a few minutes from Tel Aviv's centre. Along Hashalom Road (the road of peace, literally in Hebrew), the site could be mistaken for an abandoned park close to an abandoned building. Those who live here know that this site has been abandoned for years despite sitting on extremely valuable land—though they perhaps don’t know why it has remained abandoned for so long or what stood there.
The abandoned compound was, until 1997, a weapons factory called “HaMagen”, producing a number of small arms and dumping toxic products that later required two decades of cleaning. It was initially built in 1948 and expanded in 1967 when Israel’s military industry faced a significant crisis tied to a French embargo imposed by then-President Charles de Gaulle three days into the 1967 war. At the time, Israel was still relying on French weapons rather than American ones.
The factory seems to be the symbol of a time long gone when Israel’s military industry was the direct successor of the pre-state network of underground ammunition and weapons-manufacturing workshops used to fight the country’s independence war. At the time, Israel’s military industry wasn’t producing air defence interceptors capable of destroying missiles in space. It was rather making do with what it could find, including, for instance, the infamous “Davidka”—a makeshift mortar used during the 1948 war that most Israelis may now only recall as the name of a central square in Jerusalem.
Netanyahu himself recalled this history to push back against attempts to pressure Israel. The deadly war in Gaza, the use of US-made bombs in dense urban areas, and, more recently, the expansion of the conflict to Lebanon have all pushed countries exporting weapons to Israel to use this as a tool of leverage against it.
When faced with such threats, Netanyahu remained defiant. In a speech, the Israeli PM sought to recall that his country has a history of fighting existential wars regardless of the tools available to it. Israel, he said, would “stand alone” if it had to: “I have already said that if we have to—we will fight with our nails”.
But Israel does not fight with its nails; it fights with weapon systems provided both by its own defence industry and by weapons acquired mostly from the US. This apparent dependence on Washington, at a time when Israel’s PM appears increasingly deaf to US concerns, has been the target of vehement comments on the need to use this tool as leverage.
Macron's arms embargo call
In October, French President Emmanuel Macron called for an arms embargo on Israel to force the country to negotiate a diplomatic resolution to the war in Lebanon and Gaza.
The message infuriated Netanyahu, but it was also primarily addressed to Washington. As opposed to the situation in the 1960s and De Gaulle’s embargo, France is no longer Israel’s main source of foreign weaponry—representing less than 0.1% of Israel’s imports. According to data from the Stockholm Peace Research Institute (SIPRI), between 2019 and 2023, the US accounted for nearly 70% of Israel’s imports. During the conflict that broke out on October 7 following the Hamas attacks, US aid to Israel has surged to an unprecedented level at a time when demand for US military assistance itself is surging due to the Russian invasion of Ukraine.
Faced with threats to use weapon supply as a tool of leverage against Israel, one would expect to have Israel’s defence industry leaders dead with worry. But that is not the case.
Despite threats to impose an arms embargo or the decision not to allow Israeli companies at two French expos over the past year, Israel’s defence companies have seen their revenue surge. Interest in Israeli weapon systems has spiked despite mounting criticism of Israel’s actions in Gaza and now in Lebanon and despite the catastrophic failure of October 7, which saw Israel’s high-tech defences near Gaza overwhelmed by Hamas.
For the third year in a row, Israeli weapons and military systems sales surged to a record in 2023. This continued increase is likely to be confirmed in 2024, as companies such as Rafael—the producer of the Iron Dome, amongst others—already posted results showing a 25% surge in sales during the second quarter of 2024 compared to the same period last year.
One of the big ticket items on the list of Israeli weapons sold abroad is the Arrow-3 air defence system. In 2023, Germany became the first foreign country to sign a contract to acquire the Arrow-3 air defence system. The roughly $4bn deal is the largest arms sales deal in Israel’s history. It was signed before the conflict broke out but confirmed during the war.
This came as the Arrow system proved its effectiveness during the April 13 missile attack by Iran. Israel Aerospace Industries (IAI), the Israel-based company producing the system, has had to significantly expand its production capabilities, increasing shift length and hiring new workers due to foreign demand, as well as Israel’s domestic needs. Indeed, the system was used again (with lesser efficiency) on 1 October, when Iran launched an even broader missile attack. The Arrow-3 system may even become part of Europe’s Sky Shield Initiative, cementing its place in Europe’s defence landscape.
The old continent, which represents around 35% of Israeli exports, is faced with a dilemma: Though several European countries have been some of the loudest voices criticising Israel’s behaviour in Gaza, they also face new threats that may require some of Israel’s military innovations. Israel’s air defence systems, which represent more than a third of the country’s arms exports, are of particular interest.
The war in Ukraine has been a wake-up call regarding the need for pragmatic rather than politically driven decisions. It also showed that after decades of insurgent-focused wars, the threat of large-scale conventional wars had not disappeared. At the same time, Israel’s opposition to providing military support to Ukraine (for fear of alienating Russia) has been a cause of friction. Israel went as far as to prevent European countries from transferring weapons produced on European soil under license, showing how (geo)politics can never truly be ignored when it comes to weapons sales.
