POPPIES

It was like “swatting a fly with a sledgehammer.” I refer to the IDF’s response to the cross-border incident involving a Hezbollah drone (UAV) last week.

The Times of Israel quoted an IDF source that said an Iron Dome interceptor missile was fired at the drone, but failed to bring it down. Air force jets and helicopters were also “scrambled” during the incident.

.According to a statement issued by Hezbollah the drone was on a reconnaissance mission and managed to penetrate Israeli airspace along a 73 km course before returning safely to Lebanon.

The same IDF source said the drone returned to Lebanon “after a few minutes”, adding that the drone was a glider type, but did not specify the exact model.

The Times of Israel noted that the drone had entered Israeli airspace from Lebanon a day after the IDF shot down another Hezbollah drone.

I’m not sure what happened, maybe the IDF response to the second drone penetration was over cautious fearing that the intruder might be armed and was on a suicide mission. My guess is as good as yours. However, the IDF follow-up response was loud and emphatic. Citing an unnamed Lebanese security source, Al Jazeera reported that two Israeli fighter jets flew from the Mediterranean Sea over Beirut before leaving several minutes later.

Hebrew language media reports said the Israeli jets flew over Beirut’s Dahiya neighbourhood, a Hezbollah stronghold, deliberately setting off sonic booms.

“The low flying fighter jets jolted residents, rattled windows and set off some car alarms”.

So far this week there have been no drone overflights, except in Syria where Iranian proxies and armaments were targeted by IAF fighter bombers. They flew close to a Russian naval and air force base at Latakia. Apparently, the hotline between the IDF and the Russian forces in Syria was employed giving prior notice of the attack.           I mention this because some observers reasoned that the Russian “intervention” in Ukraine would adversely affect the Israeli air force’s (IAF) freedom to attack Iranian arms shipments and Iranian proxy forces in Syria. However, it seems that Israel is managing to maintain a delicate balance between alignment with the West regarding Ukraine and the continued convenient “understanding” with the Russian forces.        A few weeks ago, I expressed concern about the joint Russian and Syrian patrol flights, but that was before the Ukraine crisis had climaxed.

If indeed the Iron Dome interceptor for one reason or another failed to down the Hezbollah drone I doubt if it will affect its export sales. Potential customers are attracted by the system’s 90% + interception rate more than anything else. In fact, a recent Ynet report said that Israel had refused a sale of the system to Ukraine ostensibly not to annoy Moscow. The report claims that “Kyiv began a pressure campaign on lawmakers in Washington to facilitate a deal. The Ukrainians also officially asked the US to deploy American patriot missile systems and the Iron Dome system in Ukraine last year long before a Russian invasion was a tangible threat.”                          

Ukraine isn’t the only country said to be interested in the Iron Dome System. A number of media reports have suggested that Gulf states want the system. With drone and missile threats increasing against the UAE, air defences are needed more than ever in Abu Dhabi.

The intricate relationships between the US and Israel, US funding for these systems, and also partnerships between Israeli and US companies, are key to understanding what is happening.

The US Army has acquired two Iron Dome batteries. This took years to conclude.

(Partly due the US army command’s reluctance to buy the Israeli air defence system. The two Iron Dome batteries were purchased only after pressure from the US Congress).  

Considering how slow procurement works, the idea that Iron Dome batteries could

 be sold “off-the-shelf” to the Gulf, Ukraine or to anyone else, is not reasonable. It takes time for sales contracts to materialise. The technology is also very sensitive.

Israel has sold the radar used in the Iron Dome system, made by IAI’s (Israel Aerospace Industries) Elta, to the Czech Republic in a 2019 deal, but radar is less sensitive than missiles.

Undoubtedly, the Iron Dome Defence System is Israel’s best known air-defence system, but Israel makes a plethora of other defence systems. For instance, Rafael showcased its Spyder air defence system at this week’s Singapore Air Show.

Spyder is a quick reaction, lower-tier Air-Defence system, designed to counter enemy aircraft, bombs, UAV’s, and precision-guided munitions. It provides effective protection of valuable assets, as well as reliable defence for manoeuvring forces.

Our air–defence are evolving continuously with new refinements and capabilities   

Israel’s multi-tiered air-defence system will be augmented by a laser beam system.

“Israel will surround itself with a defensive ‘laser wall,’ with new missile interception technology to be ready within a year,” Prime Minister Naftali Bennett announced in a speech at the Institute for National Security Studies (INSS) in Tel Aviv on Tuesday. The IDF successfully intercepted drones with the powerful airborne laser system installed on a light aircraft in June. The system downed several UAVs at a range of one kilometre with a 100% success rate. The ministry intends to build a 100-kilowatt laser that will have an effective range of 20 km.

Bennett explained that today a terrorist in Gaza can launch a rocket into Israel that costs hundreds of dollars to make, while the Iron Dome interceptor missile costs tens of thousands of dollars.

“This equation doesn’t make sense,” the prime minister stated. “It allows [the terrorists] to launch more and more cheap rockets while we spend millions of dollars during a border flare-up and billions during a campaign. We decided to break the equation, and it will be broken in the near future.”

“If you can intercept a missile or rocket with an electric pulse that costs a few dollars, we are weakening the ring of fire that Iran has built on our borders.” Bennett said.

Israel’s defence companies are among the world’s leading industries. At the forefront are Rafael Advanced Defence Systems, Elbit Systems and Israel Aerospace Industries. Each firm possesses its own unique abilities and partners abroad. Normally the news media doesn’t report on their marketing efforts and sales.

The real world of Israel defence sales is far more complex than some of the reports about Iron Dome’s potential sales indicate. There are a number of systems produced by Israel, some of which may be easier for it to sell than those that are backed by the US and closely entwined with American defence companies, or which have sensitive operational details that allow for them to only be placed in the hands of reliable partners and allies.

A lot of Israel’s defence sales are not reported publicly due to the sensitivities involved. Israeli companies often vaguely state they have sold systems to an “Asian” country or to customers in South America or other places.

This means that in many cases, there is a lack of knowledge about the full story. That leads to headlines that appear to make it seem like Iron Dome could just be delivered overnight and be ready to use by any customer.

The reality, of course, is that acquiring air defence systems has a billion-dollar price tag that comes with buying interceptors, radar, command and control centres, waiting for delivery and then training on the system. Reports that seem to imply that an Iron Dome System could be immediately supplied to some country, and if doesn’t happen it’s because of political issues, misconstrues how air defence systems are acquired.

The reports also often misunderstand the nature of modern air defence. Countries need multi-layered systems like Israel has. This means that while the US makes Patriot, the THAAD system and short-range C-RAM, Israel makes Arrow, David’s Sling, Iron Dome, Spyder, Barak and other systems. Sometimes these systems can work well together, especially the more that Israel and American companies work together.

But countries need to think about how to plan a multi-billion air defence budget. This is made even more challenging when they have systems supplied by the Russians or Chinese, such as the Pantsir-22.

Some countries are going through a transition, from one set of systems to another, and it’s not always an easy fit to take an Israeli, American or Western system and put it side-by-side with the concept of air defence that was developed by the USSR and then modernised by Russia or China in recent decades.

In a complex world underpinned by more rivalry between the US and “near-peer” adversaries such as China and Russia – and the Middle East divided between Iran and other countries, such as Israel and the Gulf – countries are ploughing money into air defences. This is particularly true due to rising drone threats and manoeuvring missiles, or PGMs.

However, as countries rush to acquire systems, they also have to look at new technologies, such as the lasers that Israel says it will soon roll out complementing the Iron Dome system,

Prime Minister Bennett concluded his address at the INSS gathering saying, “Israel’s allies in the region could be part of a ’multidimensional alliance’ against forces that seek to destabilize the Middle East.”

Rereading this post, I realise that it makes very dry reading, unless of course you are a military hardware enthusiast. To compensate for this, I’ll briefly mention the Anemone -coronaria or poppy that flowers in Israel from late November through to March.

I realise the name arouses an association with the current pandemic, but no more than that.

The poppy is also synonymous with “poppy day” following WW1. The red poppy has become a symbol of war remembrance the world over. People in many countries wear the poppy to remember those who died in war or are serving in the armed forces. In many countries, the poppy is worn on Armistice Day (11^th of November), but in New Zealand it is most commonly seen on Anzac Day, 25^th of April. It was one of the first plants to grow and bloom on battlefields in the Belgian region of Flanders. The connection was made most famously by a Canadian medical officer, Lieutenant-Colonel John McCrae, in his poem, ‘In Flanders fields’ that begins-

“In Flanders fields the poppies blow

Between the crosses row on row”

 

Particularly appropriate while Russia is invading Ukraine.

 

Nevertheless, have a good weekend.

Beni                                                                24^th of February 2020

 

 

                     Rondo Alla Turca

While everyone is on tenterhooks waiting to see the outcome of the Ukraine crisis, I decided this week to digress, moving on to a seemingly unrelated topic.

An op-ed posted in Foreign Policy by Aykan Erdemir a former Turkish politician, caught my eye. Dr. Erdemir is currently senior director of the Turkey programme at the Foundation for Defence of Democracies.

“The diplomatic map of the Middle East is shifting yet again. A surprising thaw seems to be afoot between Israel and Turkey, former close partners whose relations nosedived under Turkish President Recep Tayyip Erdogan.” Erdemir wrote. “Last week, Erdogan announced that Israeli President Isaac Herzog will visit Ankara in mid-March, which would make Herzog the first Israeli president to visit Turkey since Shimon Peres’s 2007 trip. The Israeli government has yet to confirm the trip, but has acknowledged a possible visit.

Hopes for a Turkish-Israeli rapprochement were bolstered further by a phone call last month between Israeli Foreign Minister Yair Lapid and his Turkish counterpart, Mevlut Cavusoglu—the first publicly acknowledged conversation between the two countries’ foreign ministers in 13 years.

“That Erdogan is looking for new partners—and appears willing to mend relations—is understandable. He faces a collapsing economy, rising domestic opposition to his rule, conflict with Arab neighbours and traditional Western allies, and new turmoil in the region as Russia prepares to invade Ukraine.”

Turkey was the first Muslim-majority country to recognise the state of Israel in 1949.

Israel and Turkey enjoyed robust diplomatic, security and intelligence cooperation over many years.

However, since Erdogan’s Islamist-rooted Justice and Development Party rose to power in 2002, bilateral relations have turned sour.

“Now, Turkish president is facing growing isolation in the Eastern Mediterranean and economic woes at home are forcing him to reach out to his sworn enemy.”

Israel is treading carefully, given Erdogan’s frequent antisemitic and anti-Israeli vitriol, which the U.S. State Department called out as “reprehensible” and “incendiary” as recently as May 2021. “I have no illusions with regard to Turkey,” Israeli Prime Minister Naftali Bennett said in an interview last week.

High on the list of Israel’s concerns is Erdogan’s unwavering support for Hamas. Ankara has granted Turkish citizenship and passports to senior Hamas operatives, Erdogan has flaunted hosting two senior Hamas leaders, Saleh al-Arouri and Ismail Haniyeh, both of whom are on Washington’s list of global terrorists. It is therefore no surprise that Israel’s Shin Bet intelligence agency “stressed in the internal discussions about Turkey that any normalisation process must include limiting Hamas activity in Turkey,”  

Rest assured, any normalisation of Israeli-Turkish relations won’t happen as quickly as it did between Israel and the UAE.

Israeli suspicions are understandable considering Erdogan’s efforts to undermine the Abraham Accords, just two years ago.

Since then, Erdogan has made an effort to mend relations with the UAE, Egypt, Saudi Arabia, and other Arab countries with which Turkey has clashed in recent years—and now, with Israel. “The diplomatic flurry included a November 2021 visit to Ankara by Emirati Crown Prince Mohammed bin Zayed, whom Turkish state media demonised as a “dark prince” as recently as 2020. Erdogan clearly hopes to tap into Emirati capital to help stem Turkey’s economic meltdown.

“Since their rapprochement, Abu Dhabi and Ankara have signed a $4.9 billion currency exchange agreement, while Abu Dhabi’s sovereign wealth fund has pledged to invest $10 billion in Turkey. The UAE, for its part, not only expects a good return on its investment but also sees Turkey as a potential hedge against Iran as the Biden administration reaches out to Tehran for a new nuclear deal.

While Israel doesn’t have state-controlled petrodollars to shower on Turkey, it does have financial, economic, and technological power in the region. Improved relations with Israel could also help burnish Turkey’s tarnished global image, not least as an investment destination. An unprecedented exodus of Western capital from Turkey over the last few years has risked Turkey’s designation as an emerging market by leading financial institutions and could result in its demotion to the category of so-called frontier markets, placing Turkish bonds and equities below the worthwhile investment level  for most of the world’s funds. That would hasten Turkey’s economic implosion—and compound Erdogan’s political worries.”

In another piece he wrote for Foreign Policy Dr. Erdemir said, “There is also the enticing future possibility of building an Eastern Mediterranean pipeline to bring Israeli natural gas to Turkey and from there to Europe.

This suggested alternative route could help boost morale for Turkish businesses and households protesting paralysing power cuts and skyrocketing utility bills.

Recalling the Turkish-Israeli rift that followed the 2010 Gaza flotilla crisis, Turkey regularly snubbed possible energy deals with Israel, but Erdogan revamped the pipeline project earlier this month and appears enthusiastic about getting back to business. Following the Biden administration’s withdrawal of its support to an envisioned Israel-Cyprus-Greece pipeline last month, which Ankara has spun as a Turkish victory, Erdogan has another reason to capitalise on the Israel-Turkey alternative.

“At least as importantly, Erdogan also hopes that mending relations with Israel and Egypt will help reverse Turkey’s growing isolation in the Eastern Mediterranean. The region has witnessed an astonishing and unprecedented diplomatic and military partnership among Israel, Egypt, the UAE, Greece, and Cyprus, which have all been alarmed by Turkey’s growing assertiveness in the region; the group is also enticed by the prospects of energy cooperation under the umbrella of the East Mediterranean Gas Forum, an organisation Ankara hopes to join one day. Turkey has long seen Greece and Cyprus as archrivals, and another purpose of Erdogan’s diplomatic flurry might be to try to dislodge them from the region’s fast-evolving network of partnerships. As of now, that does not appear to be a price Israel is willing to pay. The Jerusalem Post reported that, according to an Israeli government source, “improvements in Jerusalem-Ankara relations will not come at the expense of Israel’s alliance with Greece and Cyprus.”

While Erdogan’s sudden about-face with Israel has raised suspicions among Israeli analysts, there is a cautious optimism among Israeli officials for a gradual improvement of ties with Turkey. That could allow not only an exchange of ambassadors but also tactical cooperation against Iran and its proxies in the Middle East. Policymakers in Ankara are “no great friends of Iran, to put it mildly, and we can’t afford to make assumptions that will prevent us from creating alliances,” an unnamed Israeli diplomat recently told Haaretz.

Considering Erdogan’s antagonistic attitude toward Israel over the last two decades and his frequent U-turns, it will take time and effort to rebuild trust. But Erdogan surely knows that Israel is now, thanks in part to the Abraham Accords, less isolated in the Eastern Mediterranean than Turkey, and it has less to lose if normalisation attempts with Turkey fail. The onus is thus on the Erdogan government to be proactive in improving relations.

“Ultimately, a real rapprochement built on trust might have to wait for a new Turkish government. A big-tent opposition bloc appears poised to defeat Erdogan in the 2023 presidential and parliamentary elections. But as an embattled Erdogan seeks to undo some of the economic and foreign-policy damage he has wrought, setting in motion a return to better relations with Israel would be a good way to start.” 
Aykan Erdemir said.

Despite the many uncertainties regarding renewed ties with Turkey President Isaac Herzog plans to meet the presidents of Greece and Cyprus in the coming weeks ahead of a possible visit to Turkey for talks with President Recep Tayyip Erdogan.

The trips are meant to assure Athens and Nicosia that a rapprochement with Ankara will not come at the expense of the close ties Israel has developed with them in recent years.

I want to conclude with a Jewish anecdote I have told maybe two or three times in the past. However, this time I’ll recount it in a different context.

In better times before the Erdogan era, my wife and I visited various places in Turkey.

During our last visit we stayed at a hotel in Antalya and toured with a group of Israelis staying at another hotel. Our tour guide was a 40-year-old former English teacher named Ahmet. He told us how he had been forced into early retirement when the Turkish Ministry of Education replaced him with a younger graduate teacher. Finding it difficult to live comfortably on his meagre pension Ahmet took a course in tour guiding in order to supplement his income.

One day while the rest of the group went off shopping Roni and I joined Ahmet who suggested visiting a site not included in the tour itinerary. At that stage in the tour, we had already established an open amicable relationship, so I felt confident enough to tell Ahmet the Jewish anecdote without causing offence or embarrassment.

I explained that almost every Israeli is familiar with the colloquial Hebrew expression that translates as “Kill a Turk and rest," meaning – “Take it easy, one at a time, don’t rush.” I believe it’s derived from the Jewish anecdote.  The whole story goes like this:  

A tearful Jewish mother goes with her son to a railway station before he leaves for the front lines after being recruited to fight in the Czar's army against Turkey in 1877. She is of course very worried about her son's safety and survival. "Listen to me,” she says, “When you get to the front, kill a Turk, and rest, then kill another Turk and rest. Don’t overexert yourself." The reluctant Jewish soldier interrupts her “But what if one of the Turks kills me first.” “But why would he do that,” she replies in total disbelief? “What have you done to him?

Ahmet laughed, understanding that the anecdote wasn’t disparagingly anti-Turkish, just a bit of self-Jewish humour.

 

Have a good weekend.

 

Beni                                                                17^th of February, 2022.

 

Real Estate

Unless you are in the business, either buying or selling, real estate news doesn’t attract much attention. Nonetheless, Times of Israel political correspondent Tal Schneider says it’s very newsworthy.

Ms. Schneider told how Israeli Arabs lured by cheap prices are buying homes in the West Bank. She cited the case of Khaled who lives in Umm al-Fahm, a bustling Arab Israeli town in the north of Israel.

During the week, Khaled lives in Umm al-Fahm where he works as an excavation contractor. Soon, he, his wife and their six children will be going off on weekends to Nablus in the West Bank.

“I have an apartment, with a north-facing view, on the seventh floor of an 11-story building. The view is wonderful and the neighbourhood is great. There are restaurants, playgrounds” says Khaled, (a pseudonym), of his under-construction new holiday apartment in Nablus. “It’s walking distance to hookah cafes, coffee shops and restaurants. For us, it’s a vacation place.”

“While purchasing property in areas controlled by the Palestinian Authority is not illegal, having his name published in connection with the trend could cause him problems in both Israel and the PA.

But in private, Khaled, talks openly about his property purchase.” Says Tal Schneider.

I want to add a margin note about Umm al-Fahm: The name indicates that charcoal burners occupied this site at some time during the Middle Ages. Back then it was a small village surrounded by wooded hills. With no thought given to reforestation the charcoal burning came to an end and the village struggled on as a mixed farming and grazing hamlet   in 1596 it appeared in the Ottoman tax registers with a population of 24 households, all Muslim. In 1883, the Palestine Exploration Fund's (PEF) Survey of Western Palestine described Umm al-Fahm as having around 500 inhabitants, of which some 80 people were Christians. The place was well-built of stone, and the villagers were described as being very rich in cattle, goats and horses. It was the most important place in the area besides Jenin. The term “very rich” used by the PEF means by comparison to other places in the region. 

Captured by Iraqi Arab League forces in the 1948 Arab–Israeli War, Umm al-Fahm was ceded to Israel along with 14 other villages in the Wadi Ara area in exchange for territory south of Hebron. 

Wadi Ara has drawn a lot of political attention among some Israeli politicians, notably Avigdor Lieberman of the Yisrael Beiteinu party who proposed transferring the area to the sovereignty and administration of the Palestinian Authority for a future Palestinian state. In return the Palestinian Authority would transfer specific large Israeli settlement "blocs" within the West Bank east of the Green Line to Israel. According to politicians who support this land-swap, Israel would ensure and secure itself as a primarily Jewish state. However, many Israeli politicians disagree and believe it would only decrease Israel's Arab population by a mere 10%, while most Israeli Arabs object to trading Israeli citizenship for Palestinian citizenship.

In November 2015 the radical northern branch of the Islamic Movement centred in Umm al-Fahm was banned by the Israeli Security Cabinet, led by then Prime Minister Benjamin Netanyahu. The outlawing of the Northern Branch was based on evidence gathered by the Israel Police and the Israeli secret police, Shin Bet, which allegedly showed that the movement had close connections with Hamas and the Muslim Brotherhood. The organisation’s suspected ties with Hamas were a major catalyst for the decision; the northern branch received funding from Hamas-affiliated groups, and collaborated with Hamas in its institutional activities.

However, Shin Bet chief Yoram Cohen, objected to the Cabinet's decision to outlaw the Northern Branch. According to him, there was no evidence linking it to terror attacks and the decision would be seen as a declaration of war on Israel's Muslim community and an assault on the political rights of its Palestinian minority. Banning the movement would, according to Cohen, do "more harm than good". It would make it more difficult to monitor Northern Branch members/supporters and could cause unrest among Arab citizens in Israel and among West Bank Palestinians. For this reason, the Shin Bet, in opposition to the Israel Police, opposed the ban.

Support for the Northern Branch numbers in the tens of thousands, although it is impossible to know the exact number because the definition of “support” is unclear. Because of the Northern Branch’s extensive social service provisions, it is often difficult to discern between support, sympathy, and the use of services that the state fails to provide. For example, this problem became clear when, as part of the crackdown, the authorities shut down the Jaffa Association for Charity, a charity to which the Israeli welfare services had referred needy families.

Furthermore, much of the Northern Movement’s popularity rests on the charismatic character of Sheikh Ra’ed Salah. It’s difficult to know what is best, to ban him or to bless him, though he can’t be ignored to the point where he will fade into oblivion.

Sheikh Raed Salah, who was imprisoned for inciting terrorism, was released from prison in December last year after completing his sentence.

Residents of Umm al-Fahm gathered at the entrance of the city to greet him carrying flags of the Islamic Movement in Israel.

It’s pertinent to mention the rising popularity of the pragmatic Southern Branch of the Islamic movement led by Mansour Abbas in the current national unity coalition government. 

Back to the main text and Tal Schneider’s piece in the Times of Israel

She claims that a quite a few Arab Israelis, are buying houses or apartments in the 40% of the West Bank where the PA exercises control over most civilian matters.”

Among the most popular areas are Jericho Gate, a new planned neighbourhood on the outskirts of Jericho; Rawabi, the first planned Palestinian city in the West Bank, just north of Ramallah; Tul Karem and Jenin, home to campuses of the American University, where almost half of the student body is Israeli (Israeli Arabs); and Rafidia in Nablus, where Khaled bought his home from a Palestinian contractor when it was under construction.

Khaled paid the equivalent of $95,000 for the 200 square-metre home and then put another $77,000 into upgrading it with custom cabinets, flooring, woodwork and more, as well as hiring a local interior designer, for a final price of $171,000.

The price is a fraction of what most Israelis pay for a new apartment, even in the country’s peripheral hinterlands.

Khaled also bought three dunams (0.75 acres) of agricultural land near al Funduq, a village west of Nablus.

“I bought it for the olives,” he says. “I just enjoy going there, working during the olive harvest and later eating the ‘cured’ olives.”

By Khaled’s estimation, around one in five Israeli Arabs has land or a home in the West Bank.

“Everyone is buying,” he says. His daughter’s teacher and a pharmacist friend of his bought vacation homes in Rawabi. “They go there on weekends and holidays. Everyone around me is buying real estate.”

Thabet Abu Rass, a co-CEO of the Abraham Initiatives shared society organisation and a political geographer, told Tal Schneider that he had invested some of his savings in buying an apartment in the Nablus area.

“There are hundreds of Israeli Arabs investing there, due to a housing crisis in Israel,” he said. “I know less about the extent of the phenomenon in Jericho or Rawabi, but I am aware that there are a lot of transactions there as well.”

One project attracting much attention from Arab Israelis is Jericho Gate (already mentioned). It’s a planned neighbourhood of smart-looking single-family homes and duplexes set along winding, landscaped streets on the south-eastern side of Jericho, with a view toward the Dead Sea.

The project is replete with park space and plans call for cultural centres, commercial space and mixed-use developments.

“In the past, Arab Israelis invested in properties in Turkey, but the return on investment was not worth it anymore. We have Ramallah and the West Bank an hour away. You can go on vacation every week; it’s the Palestinian people, so there is mutual trust, solidarity. Why go to Turkey and worry about crooks out there?” One estate agent told Tal Schneider

Khalil Haju, a Haifa real estate agent, says he has also noticed Arab Israelis putting money in the Jericho project, as well as in Rawabi, though he estimates that only about 5 percent of Israeli buyers purchase the homes as vacation units.

“It’s mainly for families, but Arab Israelis buy them as rentals or an investment, and they don’t intend to actually go there to live,” he says.

“There are a lot of students in Jenin and Nablus, and there’s a custom of buying and renting out apartments there,” he says.

According to Tal Schneider the governor of Jenin, confirmed that Israelis were snapping up property in the city, but noted that he did not have any concrete information on the extent of the phenomenon.

“Apparently, nobody has concrete data on Arab Israelis buying homes in PA-controlled areas of the West Bank. While the tax authority has general data on Israeli investment income generated abroad, it does not specify which of these are real estate investments, said Tax Authority spokesman Avital Lahav.”

On the Palestinian side, laws are in place to keep Israelis of any stripe from buying Palestinian land. To get around the rules, Arab Israelis only buy part of a property — up to 49% — or buy an apartment or condo in a development project, which Palestinian authorities are sometimes willing to overlook.

Moreover, the purchase can be made through a foreign corporation that acts as a middleman, further obfuscating the true extent of the phenomenon, and not all Israelis report their foreign investments to the Tax Authority.

The Bank of Israel keeps overall statistics on Israeli investments abroad, but does not have enough information on a granular level to allow for any meaningful analysis of the trend.

Schneider mentioned another real estate agent who told her that purchases are also made through shell entities registered to Palestinians, to blur the Israeli ownership.

“In principle, it is more difficult to acquire full ownership of land, as opposed to an apartment,” he told her.

“The people buying apartments often obtain a long-term leasehold with the contract registered on the property.” he added.

Housing costs in Israel have soared over the last 15 years.  In Tel Aviv a three-bedroom apartment costs at least $1.25 million. Nearby in the working-class Bat Yam, a similar-sized apartment, even second hand, goes for around $557,000 and in far-flung Kiryat Shmona, on the Lebanese border, new three-bedroom apartments generally go for nearly $283,000. Going up to 200 square metres there would bring the price to around $630,000.

Tracking housing prices in Arab-majority towns in Israel is more difficult, because ownership often transfers within families. In Nazareth, however, three-bedroom units average around $346,000 — cheap by Tel Aviv standards, but downright exorbitant compared to Nablus or Jenin.

“In the West Bank you can buy a 250 square-metre apartment for $63,000, but prices in Ramallah and Bethlehem can get relatively high. A 120-square-metre apartment in Ramallah can cost $126,000. In Rawabi, just a few minutes from Ramallah, a 120-square-metre apartment costs approximately $94,000.”

An ad for a project there advertises a new 171-square-metre home with three bedrooms overlooking a landscape of hills and valleys for $165,000.

Even compared to homes in the Buyer’s Price programme (Israel’s first-time homeowner subsidised housing lottery), prices are still three to four times what they are in Palestinian cities,” she added.

“Nevertheless, prices in Jericho Gate and other luxury projects can run much higher” said Haju, a Haifa real estate agent, who estimates that a single-family home in Jericho Gate averages around $786,000, but for that you get a yard, a pool and 300 square metres of living space.

One of the estate agents quoted by Schneider claims that one factor driving the phenomenon is the lack of bank mortgages available in Arab communities, where mafia-controlled loan sharks have taken over the lending business.

“Most Israeli Arabs have a very hard time getting financing from banks in Israel,” he says. “I think most buyers are simple people who have worked all their lives, saved, and don’t want to lose money by investing in a bank savings account. Investing in businesses during the COVID pandemic has not been an attractive option, so they invest their money in real estate in the PA and assume that it will bring a nice return.”

Purchasing homes in the PA rests on the assumption that the security situation will remain calm enough to make a vacation home in Jericho tenable or keep a real estate investment from crashing.

Despite the money pouring in, jitters are still high that the situation could change at any moment.

I think people are still afraid of a deterioration in the security situation and may even be afraid of losing their investment. But still, there is a certain percentage that continues to invest. They feel that the economic relations between Israel and the West Bank are good, that there is good production in the West Bank, and that there is mutual trade and economic cooperation. And so, there is also prosperity and an increase in real estate purchases there.”  

 

I’m inclined to share some of his optimism.

 

Have a good weekend.

 

Beni,                                                               10^th of February, 2022.