The need to keep large numbers of IDF reservists on active duty—and thus out of the workforce—and the evacuation of tens of thousands of citizens from the northern and southwestern parts of the country have taken an economic toll on Israel. So too has a decline in foreign investment. Ezra Gardner examines the latest figures:

Even as growth equity begins to recover globally, Israeli venture-capital investments peaked at $29 billion in 2021 but then dropped significantly to $17 billion in 2022 and to $7.3 billion in 2023, and are currently (in 2024) on a $5 billion run. . . . . Israel reported zero initial public offerings in 2024, a decline of 100 percent, indicating that while other regions are recovering, Israel is not.

Beneath the surface, troubling trends from the largest foreign investors tell an even more alarming tale. In 2021, Japanese investment in the Israeli tech sector surged to roughly $3 billion. SoftBank Group Corp., a Japanese multinational holding company headquartered in Tokyo, Japan, engaged in a significant number of deals in Israel, with twelve in 2021, four in 2022, and three in 2023. Since October 7, SoftBank has suspended deals in Israel but has closed nine deals in the U.S., Europe, and Canada. Similarly, Koch Investments, based in Wichita, Kansas, has refrained entirely from engaging in deals within Israel since October 7, mirroring the Japanese trend.

Gardner warns of an “impending crash,” but believes it is not inevitable:

Addressing this issue requires concerted efforts from policymakers, investors, and the tech ecosystem to reinvigorate the nation’s investment appeal. Without swift and strategic action, Israel risks falling further behind in the competitive global market, jeopardizing its position as a leading innovation hub.

This week, there have been numerous unconfirmed reports about the fate of Esmail Qaani, who is the head of the Quds Force, the expeditionary arm of Iran’s Revolutionary Guards. Benny Avni writes:

On Thursday, Sky News Arabic reported that Mr. Qaani was rushed to a hospital after suffering a heart attack. He became [the Quds Force] commander in 2020, after an American drone strike killed his predecessor, Qassem Suleimani. The unit oversees the Islamic Republic’s various Mideast proxies, as well as the exporting of the Iranian revolution to the region and beyond.

The Sky News report attempts to put to rest earlier claims that Mr. Qaani was killed at Beirut. It follows several reports asserting he has been arrested and interrogated at Tehran over suspicion that he, or a top lieutenant, leaked information to Israel. Five days ago, the Arabic-language al-Arabiya network reported that Mr. Qaani “is under surveillance and isolation, following the Israeli assassinations of prominent Iranian leaders.”

Iranians are desperately scrambling to plug possible leaks that gave Israel precise intelligence to conduct pinpoint strikes against Hizballah commanders. . . . “I find it hard to believe that Qaani was compromised,” an Iran watcher at Tel Aviv University’s Institute for National Security Studies, Beni Sabti, tells the Sun. Perhaps one or more of [Qaani’s] top aides have been recruited by Israel, he says, adding that “psychological warfare” could well be stoking the rumor mill.

If so, prominent Iranians seem to be exacerbating the internal turmoil by alleging that the country’s security apparatus has been infiltrated.