The IDF is in Massive Trouble

Israel's defense establishment, which has been fighting on multiple fronts for nearly three years, is facing a crisis it has never encountered before. According to a report in Israel Hayom, military officials warn of a shortfall of 34 billion shekels, roughly $9 billion, caused by the staggering costs of Operation Lion's Roar, the Israeli and American strikes on Iran that began in late February, and the grinding campaign in Lebanon that has followed. "We have never been in a situation like this," one officer was quoted as saying. "The coffers are empty. There is no budget. The army's readiness is in danger."

A War That Costs 1.5 Billion Shekels a Day

The scale of Israel's military spending since October 7, 2023 has been historic. The Knesset passed a 2026 defense budget of roughly $44.8 billion, an increase of approximately $9.48 billion over the previous year, reflecting Israel's shift from low-level conflicts to a multi-front war. Yet even that record sum appears insufficient.

The government estimates that every day of fighting costs 1.5 billion shekels in military expenditure alone. The Lebanon front, drone warfare, ongoing ground operations, and the massive logistical footprint of a near-100,000-strong reservist force have all drained resources at a pace that budgets drafted months ago could not anticipate.

A key question haunting Israel's defense planners is how a 65-billion-shekel gap arose between the defense budget approved in December and current military demands, even though the possibility of war with Iran was already being factored in. The answer, officials acknowledge, is that war always costs more than any plan predicts.

Extended conflict could reach 100 billion shekels, roughly $33 billion, accounting for about 15 percent of Israel's entire 2026 national budget.

"Ten Red Flags"

The financial warning does not stand alone. It sits alongside a broader, deepening crisis of military capacity that the IDF's own chief of staff has been raising for months, in increasingly urgent terms.

IDF Chief of Staff Lt. Gen. Eyal Zamir warned during a security cabinet meeting in March that the military would "collapse in on itself" as it faces mounting operational demands and a growing manpower shortage. "I am raising ten red flags before you," he reportedly told ministers. "The IDF now needs a conscription law, a reserve duty law, and a law to extend mandatory service. Before long, the IDF will not be ready for its routine missions and the reserve system will not hold."

Zamir has warned that the shortage will mean "severe harm and a decrease in the IDF's force size, expressed in a shortage of thousands of fighters and combat-support personnel," and that the heaviest price will fall on reservists and their families, called up again and again with no end in sight.

Operation Lion's Roar has forced Israel's defense establishment into a rapid procurement sprint, exposing critical ammunition and equipment shortfalls that now require emergency spending on top of an already record-breaking budget.

Record Budgets, Record Costs

Israel has not been passive. The Knesset approved a historic 850-billion-shekel national budget for 2026, including 143 billion shekels for defense, with an additional 30 billion shekels added specifically to account for Operation Lion's Roar, as well as 32 billion shekels for the rehabilitation of the Gaza Envelope and northern communities.

But the pace of spending is outrunning even those figures. Not all costs are paid immediately, and some will be spread over several fiscal years, meaning the 2026 defense budget will not cover the full cost of the current war.

The IDF also has ambitious plans for rebuilding. A five-year force-building plan known as "Hoshen" is based on a budget framework of 350 billion shekels over the coming decade, designed to rebuild readiness after years of war and prepare for future threats, not including US military aid. But with the current war still burning through resources daily, the gap between plan and reality keeps widening.