Israel’s war with Iran is costing the country hundreds of millions of dollars per day, prompting growing pressure on leaders in Tel Aviv to wrap up the conflict swiftly as economic strain and infrastructure damage mount.

Interceptor Systems Drive Soaring Costs

The most significant daily expense for Israel is its air defense systems, especially the use of interceptor missiles like David’s Sling and Arrow. Each activation of David’s Sling, typically requiring two interceptors, costs around $700,000. Arrow-3 missiles, designed to stop long-range ballistic threats, cost up to $4 million per launch.

With Iran having fired more than 400 missiles in recent days, Israel’s defense systems are being tested at full capacity. Analysts estimate daily interceptor costs alone range between tens of millions and $200 million.

Infrastructure Damage and Civilian Impact

Beyond defense spending, damage to buildings and infrastructure is proving costly. Engineers estimate that repairing a single high-rise in Tel Aviv could run into the tens of millions. More than 5,000 residents have been evacuated from damaged homes, with hotel stays funded by the state. Two strikes on Israel’s largest oil refinery led to its shutdown and the death of three workers.

“We are facing destruction we haven’t seen in decades,” said Eyal Shalev, a structural engineer.

Economic Fallout and War Timeline

Israel’s economy remains resilient—for now. S&P has not downgraded Israel’s credit outlook, and markets have remained surprisingly strong. However, former Bank of Israel Governor Karnit Flug warns that a prolonged war could deeply harm the economy.

“If it is a week, it is one thing. If it is a month, it is a very different story,” she said, noting the cumulative costs of munitions, fuel, aircraft operation, and emergency services.

The war has already forced closures of businesses, schools, and airports. Parents are juggling work-from-home demands with child care, and some sectors are barely functioning.

Strategic Goals vs. Budget Reality

Despite the economic toll, Prime Minister Benjamin Netanyahu shows no sign of backing down. Israel’s stated goals remain the dismantling of Iran’s nuclear program and missile infrastructure.

But military experts warn that Israel’s ability to maintain its offensive posture could be constrained by mounting financial pressure—especially if the U.S. delays intervention or if the war drags into weeks.