Israel elections: Military alert and Netanyahu sparks 'economic storm'

On the eve of the 26th Knesset elections scheduled for tomorrow, Prime Minister Benjamin Netanyahu sparked controversy with remarks about using cryptocurrencies to counter potential international sanctions, while his opponents criticized his reliance on fear-mongering tactics after he warned of a possible Iranian nuclear attack on Israel.

In an interview with Israel’s Channel 10 on Friday, Netanyahu said he was preparing for a scenario in which broader sanctions are imposed on Israel, mentioning the option of using cryptocurrencies or blockchain technology.

These remarks drew rare criticism from the Bank of Israel, which stated that cryptocurrencies cannot serve as a means to circumvent sanctions and urged political leaders to focus on policies that make such measures unnecessary.

Yesterday, more than 100 economists, including former Bank of Israel officials, former central bank governor Yakov Fruchter, and several Nobel laureates, signed a letter expressing concern over Netanyahu’s proposal. They warned that it would lead to rising unemployment, a decline in foreign investment, and a collapse of Israel’s economic standing globally.

Criticism also arose over Netanyahu’s publication of an AI-generated image of a nuclear bomb exploding in Tel Aviv, accompanied by comments from Yuval Blumberg stating that the real threat to Israel is the nuclear danger from Iran, and that other issues are merely a smokescreen to hide the single problem that far outweighs all others.

Latest opinion polls released before midnight on Friday–Saturday showed Yesh Atid leading by a narrow margin, followed by Likud, led by Netanyahu, while the Yamina party, led by former Prime Minister Naftali Bennett, came in third. No bloc has managed to secure the 61 seats required to form a government.

Eisenkot, 66, emerges as Netanyahu’s main rival, benefiting from public sympathy following the deaths of his son and two of his nephews in the Gaza battles. He resigned from the war cabinet in 2024 and founded the Yesh Atid party in 2025, but holds hardline positions on the Palestinian issue, including opposition to the establishment of a Palestinian state and a pledge to end Hamas rule in Gaza within 18 months of taking power.

The Israeli Broadcasting Authority (Kan) reported that the military raised its alert level to maximum ahead of the elections and strengthened its air defenses, despite security assessments indicating a low probability of missile attacks from Iran or Lebanon. The military also plans to conduct drills to respond to surprise attacks on multiple fronts tomorrow and the day after.

In the West Bank, the Israeli military announced the closure of all land crossings for Palestinians tomorrow, prohibiting the entry and exit of workers throughout the West Bank and the Jordan Valley, coinciding with the continuation of the military operation in Hebron, which followed an armed attack that killed two Israeli soldiers and injured three, while both Palestinian attackers were killed.