News Analysis – September 2014

General News Summary

Gaza – Reconstruction or More Destruction?

A month after the end of the Gaza war “Protective Edge”, the future of the Gaza Strip and the Israeli periphery adjacent to it remains an open question. The UN in late September said it had brokered a deal that U.N. envoy Robert Serry said would “facilitate progress in rebuilding the Gaza Strip while safeguarding” Israeli security interests”, and Israel and Hamas will begin, on Tue., Sep, 23, indirect negotiations stipulated in the Egyptian-sponsored cease-fire which ended the 50-day mini-war on August 27. The talks will be held in Cairo.

In accepting the August ceasefire, Hamas rulers of Gaza agreed that to the opening of border crossings with Israel and facilitation of reconstruction Gaza sorely needs. But in indirect talks via a unified Palestinian delegation headed by middlemen of Mahmoud Abbas, President of the Palestinian Authority, and Egypt the two sides set other issues aside for later. These include Hamas’ demands to allow a free, non-controlled opening Gaza land and seaports and releasing Hamas prisoners, and an Israeli demand of demilitarized Gaza.

Neither side sounded particularly optimistic or encouraging. Hamas spokesman Mahmoud a-Zahar, who like Gaza Hamas leader Ismail Haniyeh had not appeared in public during the 50 days of fighting, said his organization would “rebuild and rearm to be ready for the coming battle, the battle of liberation.” PA officials have already begun complaining that Hamas seeks to put obstacles in the way of assigning members of PA security forces to the Strip, saying that, without agreement on the issue, it will be difficult to reopen the border crossings to Israel and Egypt for the regular movement of both people and goods, as Israel demanded.  Israel would only express the hope that the cease-fire would “stick” this time, alluding to numerous violations of past truces by Hamas. Indeed, it was not clear whether a single mortar round fired into Israel from Gaza on September 16 (causing no injuries or damage) was intended as a signal of future Hamas intentions should future talks prove fruitless or whether it should be treated as a “accidental” firing by a rogue Palestinian group.

UN’s Serry was more cautious than optimistic. “The crisis in Gaza is far from over,” he said, “and the window of opportunity to address critical needs and stabilize the situation is short.” Without a fundamental change, he said, “Gaza could implode, or, yet again, explode, possibly with a new and even more devastating round of violence.”

According to a report in the Haaretz, Serry has proposed stationing hundreds of international observers in the Strip, to monitor reconstruction and make sure that materials and construction equipment are not diverted to Hamas for tunnels and bunkers. The position of Hamas on the monitors is not clear yet.

In the meantime, many of the residents of Israel farmers around the Gaza Strip had returned to their homes they had left during the fighting. Few expressed any optimism, anticipating that without political movement, the aftermath of Protective Edge would be similar to that of previous Gaza operations Cast Lead and Pillar of Defense, both of which brought about a year of quiet before rocket attacks from Gaza resumed. The pessimists among them were far less sanguine – they had made plans to spending the upcoming Jewish High Holiday period, beginning with Rosh Hashana beginning on the evening of September 24, with friends and relatives in northern Israel.

UN Moves

Israel is bracing for a diplomatic assault at the upcoming session of the United Nations General Assembly, when that body and the UN Security Council may present a number of initiatives designed to kick-start a list of anti-Israeli futile resolutions.

In mid-September French President Francois Hollande, after meeting with Palestinian President Mahmoud Abbas, said that France would propose a plan “to put an end to the conflict” to the Security Council. The French leader did not disclose details, saying only that his country was seeking “a durable peace accord.”

Abbas reportedly has his own plan to show the UN. The plan, already endorsed by Arab League foreign ministers, includes renewed negotiations for a period of nine months, a freeze on Israeli settlement construction during the talks and Israeli withdrawal from the West Bank within three years.

It’s perfectly clear that the Abbas plan, at least, is a diplomatic maneuver with no chance at all of success. Because he knows that Israel will not accept it, he has said that he would take his case to the General Assembly, International Criminal Court and other bodies, and threatened to dismantle the Palestinian Authority and hand responsibility for the West Bank back to Israel, which ceded it to the PA in the 1993 Oslo Agreements.

Eyes on ISIS

The Islamic State terror organization “poses no immediate threat to Israel or Jordan,” according to Defense Minister Moshe Ya’alon. Noting that the brutal terror group’s main focus is in eastern Syria and Iraq, far from Israel’s borders, therefore posing no direct threat right now. Nevertheless, in early September Ya’alon signed an order designating both Isis and the Abdullah al-Azzam Brigades, a Sunni Jihadist group linked to al-Qa’eda, as “unauthorized organizations”. Israeli law defines an unauthorized organization as one that “suggests, incites or encourages” terrorism against Israel and authorizes security forces to prevent such a group from meeting, recruiting or fundraising. Ya’alon said that Israel would take necessary steps to deal with a threat, if it materializes.

Though its focus may be far away, there have been reports of ISIS presence in Gaza and not far from the Israeli-Syrian border. But at this stage the presence is miniscule: the border area is mostly controlled by the Nusra Front, an al-Qa’eda affiliate, parts of the Free Syrian Army and units linked to the Muslim Brotherhood – all of whom, while no friends of Israel, are considered more moderate that the bloodthirsty ISIS.

A few recruiting attempts by ISIS-linked groups in Gaza and the West Bank have been monitored by Israeli security services and treated harshly by the Palestinian Authority.

Meanwhile, Israel has cautioned the United States not to ease up on Iran because of the threat posed by the Islamic State terror organization. A delegation headed by Strategic Affairs Minister Yuval Steinitz reportedly made the point during the annual mid-September US-Israeli strategic dialogue talks in Washington. According to various reports, Jerusalem is concerned that Teheran will try to get the U.S. and other powers to soften their position in the nuclear talks due to mutual concern over the threat posed by the Islamic State and in exchange for intelligence information on ISIS that the Iranians can provide.

Prior to the “dialogue” talks, U.S. officials reassured Labor party leader Yitzhak Herzog that there was, and would be, no change in Washington’s total opposition to Iran obtaining any nuclear weapons. Herzog summed up the American position as maintaining that “one threat does not reduce another. The fight against ISIS, despite its great importance, does not reduce the risk of a nuclear Iran.”

Sa’ar’s Surprise

Interior Minister Gideon Sa’ar, considered the rising star of Prime Minister Benjamin Netanyahu’s Likud party and possible challenger for the prime ministership, announced in late September that he is “taking a break” from political life. The announcement, which came as a surprise, does not mean that Sa’ar, not yet 48, is leaving politics permanently. After some interval, he may return to public life, either inside the Likud itself or perhaps in an alliance with former communications minister Moshe Kahalon, who left the Likud and politics some time ago and is now thought to be organizing his own political party.

Sa’ar, who was chosen as No. 2 to Netanyahu in the most recent Likud primaries, came into political life as the cabinet secretary, later serving as education minister in Netanyahu’s previous government. He has been at odds with Netanyahu over a number of key issues, and was the main supporter of now-President Reuven Rivlin’s run for the presidency, a candidacy that Netanyahu tried to block. Sa’ar also expressed reservations, in public, about the prime minister’s management of the recent Operation Protective Edge in Gaza.

Chemical Arms

An Israeli official says Syria may have kept caches of combat-ready chemical weapons after apparently giving up its chemical arsenal. A Reuters news agency report quoted the official, who was not named, as saying that Israel suspects Damascus retained “a significant residual capacity” of missile warheads, air dropped bombs and rocket-propelled grenades containing toxins. The official declined to say how many chemical weapons Israel thinks Syria kept.

Ganges Cleanup

Israel is anxious to assist Indian Prime Minister Narendra Modi’s ambitious program to purify the Ganges, India’s holy river. Israeli outgoing Ambassador to India Alon Ushpiz says he knows of about 200 Israeli water technology companies capable of joining in the ambitious program. Delegations from Indian research institutes, water technology companies and government agencies are expected to visit Israel and examine Israeli water and sewage purification technologies that could be integrated into the ambitious project.

The Ganges is important as a source of fresh water as well as a ritual site, but has become a source of infection and disease.

New Dayan Bio

Historian Mordechai (Morele) Bar-On, who served as then chief of staff Moshe Dayan’s bureau chief at the rank of colonel during the period when 1954’s Operation Kadesh (the Sinai Campaign) was planned, has written a new biography of his former commander indicating that Dayan preferred the military battlefield to the political wars. Bar-On, now 83, a former brigadier general as IDF chief education officer, had political views that differed from his former commander: He was one of the founders of the Peace Now movement and served as a Knesset member for the left-wing Ratz party. His book has been published by Yale University Press.

Ex-Minister Questioned

Police are investigating suspicions that former tourism minister Stas Misezhnikov influenced award of government contracts. A former member of Foreign Minister Avigdor Lieberman’s Yisrael Beitenu party, Misezhnikov a Knesset member and minister during the previous government, whose term ended in 2013. In addition to Misezhnikov, the Israel Police fraud investigation questioned events producer Yuli Roth, an associate of the former minister, and Uzi Garty, vice president marketing at Fashion TV.

The Economy

Budget Dispute Resolved

Prime Minister Netanyahu and Finance Minister Yair Lapid appear to have resolved a dispute over the 2015 budget that might have led to a coalition crisis. The two reached the outline of a compromise under which the budget deficit will be raised, more or less as Lapid had insisted by NIS 9B shekels ($2.46B), from 2.5% to 3.4% of GDP, and the defense budget will receive additional NIS 6B shekels.

The economic deal between Netanyahu and Lapid will be accompanied by political agreements on other issues, including an Israeli diplomatic initiative toward the Palestinians and legislation sponsored by Lapid’s party, Yesh Atid, dealing with a larger volume of separation of religion and state.

Until agreement was reached on September 18, Netanyahu had been insisting that the overall budget deficit does not exceed 3% of GDP, which would certainly necessitate tax increases and reductions in spending. Lapid was equally insistent that he will not raise taxes or give up his plan to eliminate Value-Added Tax on new home purchases for young couples who served in the IDF, involving NIS 2B in lost tax revenues. Instead, he demanded limiting the increase in defense spending and raise the budget deficit. The Yesh Atid party leader says he’d resign rather than raise taxes.

Netanyahu contends that defense spending is actually good for the economy. “The billions we invested in security saved the State of Israel financially. We need a significant raise of the defense budget, by many billions,” the prime minister said in mid-September.

The Defense Ministry had sought NIS 11B next year for “reinforcement” and a further NIS 30B over the next few years for buying equipment such as armored personnel carriers.

The Treasury and the Defense Ministry are still at odds over the cost of Operation Protective Edge. The Treasury disputes Defense figures indicating an outlay of NIS 9-10B, claiming that calculations by the accountant general add up to only NIS 6.5B. It claims that Defense’s estimate includes costs not related to the operation, adding that estimated expenditures for restoring operational capacity of units involved in the fighting have also been inflated.

Defense officials say cost of the fighting was calculated daily, including how much ammunition was fired every day, how many Iron Dome rockets were deployed, how many flight-hours were flown by fighter jets and helicopters, the fuel costs, the sums spent on the reserve soldiers (about NIS 600 per day per soldier), and more.

Perhaps ironically, the two ministries agree that the IDF should be reimbursed for costs “from the first shekel,” in contrast to Operation Pillar of Defense, the previous Gaza operation, whose expenditures were absorbed in the regular defense budget. Both ministries say that new reporting procedures have increased transparency and control of military expenditure.

Flug Praised

Bank of Israel Governor Dr. Karnit Flug was one of seven international central bank governors given the highest ranking by Global Finance magazine. In addition to Flug, the rating of “A” was given to central bank heads from India, Switzerland, Saudi Arabia, the Philippines, Malaysia and Taiwan. Flug’s predecessor, Prof. Stanley Fischer, repeatedly won top ranking in the annual awards. This summer, Forbes magazine named Flug one of the Israel economy’s three most influential women.

Key Job for Fischer

Federal Reserve Vice Chairman Stanley Fischer has been tapped to head a new financial stability panel at the US central bank, an influential perch he could use to try to broaden and enhance the Fed’s powers to ward off a future financial crisis. The former head of the Bank of Israel says he has seen problems in US financial safeguards.

Jordan Gas Deal

Jordan will get $15B worth of gas from Israel’s offshore Leviathan field over the next 15 years, under terms of a memorandum of understanding signed with the field’s operators in early September. The agreement will make Israel the Hashemite Kingdom’s chief energy supplier.

The US apparently was deeply involved in the agreement, which reportedly was pushed by Secretary of State John Kerry. Amos Hochstein, the State Department’s special envoy and coordinator for international energy affairs, was present at the signing together with representatives of Israel’s Delek Group and Noble Energy, its American partner. Israel and Jordan in February agreed on supply of $500M in natural gas from Tamar, another offshore field. The Jordanians turned to Israel because their supply of natural gas from Egypt had been halted by repeated terrorist attacks on the gas pipeline from Egypt, according to Israel’s Channel 2.

Israel, which last year decided to export 40 percent of the country’s offshore gas finds, has subsequently agreed on a 20-year, $1.2B deal with a Palestinian firm and signed a letter of intent to supply energy to an Egyptian facility.

Universities Ranked

Three Israeli universities are again ranked in the top 200 in the 2014 QS World University Rankings. The Hebrew University of Jerusalem is 138th, the Haifa-based Technion Institute of Technology 190th and Tel Aviv University 195th. The Massachusetts Institute of Technology (MIT) was first for the third straight year, followed by. The University of Cambridge and Imperial College London in second and third place, Harvard in fourth and Oxford in fifth place.

Cyber Defense

Danny Gold, the former head of the IDF R&D unit partly responsible for developing the Iron Dome anti-missile system that was so successful during the recent Operation Protective Edge, seeks to launch a comprehensive system to protect Israel against cyber-attack. Gold, now chair of the National Council for Research & Development National Cyber Committee, says the system will work against governmental and freelance hackers seeking to disrupt the country’s computer networks, be they governmental or private, by identifying threats before they occur. Investment in the project, which Gold hopes will be implemented within three years, is expected to run into hundreds of millions of shekels.

In a related development Defense Minister Moshe Ya’alon told a Tel Aviv University cyber conference in late September that Israel had turned back intensive cyber-attacks during Operation Protective Edge. “No damage was caused, because Israel was prepared to deal with it,” Ya’alon said, adding that “technological developments, particularly in the field of communications, present broad opportunities for attacks. If, in the past, we were attacked by land, by sea, and by air, now there is also the cyber-arena.”

Surprise Resignation

Prof. Manuel Trachtenberg has resigned as head of the Planning & Budgeting Committees of the Council of Higher Education. According to a report in Globes. Trachtenberg, a noted economist who in 2011 headed a special committee appointed by Prime Minister Netanyahu to deal with social protests over the high costs of living and housing and other issues, plans to enter politics. Trachtenberg was interested in politics before the last elections, when he reportedly considered joining either Justice Minister Tzipi Livni’s Hatnuah party or the Labor party.

Foris Receiver

A Tel Aviv District Court has appointed a permanent receiver to handle the affairs of Foris Telecom, businessmen Poju Zabludovicz and Yaakov Shahar’s firm providing wireless Internet services to African and Asian countries. The company has been in financial trouble recently, and reportedly has accumulated debts amounting to $16M.

Home Prices Soar

The Israeli Housing Price Index reached a record 348.5 points in July, after declining by 0.2% in June. Since the start of 2014, home prices have risen 4% and rose 6.8% in the 12 months ending July 2014. They are up 96.5% since May 2007.

Finance & Investment

Active August

Operation Protective Shield did not disrupt the Tel Aviv Stock Exchange, with main indices showing substantial gains. Technology shares were up 6.1%, the Tel Aviv 25 rose by 0.6% and the bell-weather Tel Aviv 100 index of blue-chip shares rose by 1.5%.

ReWalk Shares Soar

Shares of Israeli company ReWalk Robotics soared on their first day of trading on NASDAQ in early September, after the maker of robotic ecoskeletons that help paralyzed people walk raised $36M in an initial public offering. ReWalk, formerly known as Argo Medical Technologies, has marketed its devices in Europe for two years, and received Food and Drug Administration approval for US use in June.

ReWalk Person is designed for personal, everyday use, while ReWalk Rehabilitation is designed for hospital and rehab center therapy. Through August, over 400 patients have been trained on ReWalk products, which were developed over a decade by company founder Dr. Amit Goffer, a quadriplegic.

According to company filings, almost 80% of 273,000 US patients with spinal cord injuries could be candidates for existing or future ReWalk products, as well as about half of 400,000 multiple sclerosis sufferers, stroke victims and cerebral palsy patients.

Chief Scientist Reform

The Finance and Economics Ministries are changing the framework for state support of entrepreneurship and innovation, establishing a national authority for technological innovation subordinate to the Office of Chief Scientist Avi Hasson. The authority will have a wider range of tools for quickly providing aid to companies and entrepreneurs. The authority is slated to begin operating in 2016 as an operational arm of the Office of the Chief Scientist, who will be its chairman, with a director general under him.

ICL Explores Deal

Israel Chemicals, controlled by the Israel Corp., is negotiating a joint venture for mining and marketing phosphates in emerging markets. The potential deal is worth hundreds of millions of dollars as negotiations continue over partnership in a mine, and for food and fertilizer factories that will use the phosphate products. Israel Chemicals, which extracts phosphates and other minerals from the Dead Sea, has been seeking opportunities outside Israel’s border for some time.

Mergers & Acquisitions

Intercontinental Exchange-SuperDerivatives

Israeli trading platform developer SuperDerivatives has been sold to Intercontinental Exchange, the company that operates the New York Stock Exchange, for $350M. Though it is incorporated in the US, SuperDerivatives maintains its global support and development center in Tel Aviv’s Azrieli office complex and employs most of its 300 staffers in Israel. The company has developed a platform for pricing, risk management and trading in options that reportedly is used by nearly all of the world’s major financial institutions, including Deutsche Bank, Credit Suisse, Citigroup and Barclays, as well as regional banks in more than 45 countries. It also serves accounting firms, investment funds and corporations around the world. Its Israeli clients include all seven major banks and corporations including Israel Chemicals, Cellcom, Nice, ECI, Delek Group, Oil Refineries and Israel Aerospace Industries.

Ericsson-Fabrix

Ericsson, the Swedish technology and communications firm, has acquired Fabrix Systems, a cloud-storage specialist based in Ra’anana northeast of Tel Aviv, for a reported $95M. Fabrix main technology facilitates simple and easy cloud-based storage that facilitates cloud DBR and video-on-demand services.

Kenshoo-Adquant

Tel Aviv-based social media advertising company Adquant is being sold to Kenshoo, a Tel Aviv-based global software company that engineers cloud-based digital marketing solutions and predictive media optimization technology for search marketing, social media and online advertising. Reported sale price is $12M, according to Yediot Aharonot.

Slyce-Buycode

Slyce, a Toronto-based developer of visual search platforms for e-commerce, has acquired Tel Aviv-based BuyCode for $5M in shares, cash and other incentives. BuyCode’s main product is Pounce, a shopping app based on image recognition.

Stratsy-Grabcad

Stratasys, a developer of 3-D printing solutions based in Rehovot, south of Tel Aviv, has acquired GrabCAD of the US for an undisclosed sum of cash. GrabCAD, a developer of cloud-based collaboration tools for engineers, was founded in 2010 and has headquarters in Boston and R&D facilities in Cambridge, England, and Talinn, Estonia.

Mobli-Pheed

Mobli Media, a developer of photo and video-sharing technology for social networks, has acquired Pheed, a mobile social network, for an estimated $10-$20M. Based in Tel Aviv, Mobli raised $60M in a financing round led by Mexican magnate Carlos Slim, raising its total capital raised to $89M.

Yuanda-Autoagronome

China’s Yuanda Enterprise Group has purchased AutoAgronome, based in Yokne’am near Haifa, for $20M. The Israeli firm develops computerized systems that monitors and regulates water and fertilizer use, often cutting consumption of these inputs by as much as 50%. AutoAgronome’s systems are used with 70 different types of crops in 13 countries, including the UK.

SodaStream Talks

SodaStream, the maker of devices used to make fizzy drinks at home, is in talks to sell itself to a British investment fund for $840M, according to a report in Haaretz citing financial sources. The price works out to $40 a share, a 27% premium over its closing share price of $31.48 in New York in early September The company – famous as much for employing the actress Scarlett Johansson as a pitchwoman earlier this year as it is for operating a plant in the West Bank that has spurred boycott calls – has been the subject of repeated rumors about a full or partial buying by PepsiCo and others.

FIMI Enhancing Gilat Stake

Two years after its first investment in Gilat Satellite Networks, private equity company FIMI Opportunity Funds is seeking to take control of the company by purchasing equity from York Capital. FIMI, has offered to purchase 12% of Gilat’s share capital for $25.5M, raising its stake in Gilat to 35%. Prior to the offer, York held 14.1% of Gilat after selling $10.5M in Gilat shares to FIMI at the start of 2014.

Science & High Technology

Auto Emancipation

By 2017 or 2018, almost every new car will be equipped with an active accident-prevention system, says Prof. Amnon Shashua, founder of Israeli active auto defense system pioneer Mobileye. “Of course,” he says, “the film in moving in the direction of automatic drivings, automobiles in which the driver won’t have to touch the steering wheel. I have a car like that for a long time and already travel without hands. It won’t be long before you’ll also be able to buy that kind of car.”

The trend is reflected in the growth of Mobileye. Between 2007 and 2012, the Jerusalem-based firm supplied a total of 1 million systems to auto manufacturers and the accessory market. Sales rose to 1.3M in 2013 alone, and soared to 3.4M in the first quarter of 2014.

Shashua noted that Israel is the world leader in computerized vision, with more than 100 companies active in the field.

Intel Joins Parkinson’s Fight

Intel plans to use wearable gadgets such as smart watches to monitor patients with Parkinson’s disease and collect data that can be shared with researchers. The chip-making giant said in late August that it was joining forces with the Michael J. Fox Foundation, established by the actor and Parkinson’s sufferer in 2000, to conduct a multi-phase research study of the neurodegenerative brain disease. An estimated 5 million people globally have Parkinson’s, the second most widespread neurodegenerative disease after Alzheimer’s.

The initial goal is to determine the feasibility of using wearable devices to monitor patients remotely and store that data in an open system that can be accessed by scientists. In the second phase, the foundation will set aside funds to explore how patients fitted with wearable devices respond to medication.

Israel Inside New Processor

Intel’s new 14-nanometer Core M processors, set to hit the market during the second half of 2015, include WiGiG technology developed in the chipmaker’s facility in Petah Tikva, according to press reports.

DLD Opens

More than 1,000 guests from abroad and representatives of Israel’s start-up companies attended DLD, the annual start-up conference which opened in mid-September in Tel Aviv.

Aerospace & Defense

Seoul Interest

South Korea has shown an interest in purchasing Israel’s Iron Dome anti-missile system, according to a report in Israel Today. Yedidya Ya’ari, general manager of Rafael Advanced Defense Systems, noted South Korea’s interest but did not say at what stage negotiations are at present. So far, government-owned Rafael has not said if the system, developed with American assistance, has been sold to other foreign countries.

India Arms Supplies

Israel was India’s fourth largest supplier of arms over the past three years, with total sales totaling 338.9 trillion rupees (dollar amount is unclear, as the rupee-dollar exchange rate fluctuated between 70-1 and 40-1 over the period in question). The US was the largest arms supplier, with sales of $5.3B, followed by Russia with $4.1B and France with $1.9B. Information about India’s arms purchases was disclosed in mid-August, in Defence Minister Arun Jaitley’s answer to a parliamentary question.

Latin American Sale

Elbit Systems has won an $80M contract to supply a Latin American country with command, control, computer and communications (C4I) systems. The project, to be performed over a three-year period, is part of the client’s extensive modernization program for all echelons, from forces in the field up to command HQ. The system is designed to provide a real-time common operational picture, enhancing operational performance and the situational awareness of land forces in particular.

Azeri Ties

Defense Minister Moshe (Bogie) Ya’alon visited Azerbaijan in early September, less than a month after Iran claimed to have shot down an Israeli UAV that was launched from Azeri territory. At a meeting with President Ilhan Aliyev, Ya’alon stressed the growing ties between the two countries. Baku has purchased an estimated $4B worth of Israeli arms, including at least $1.6B worth of UAVs from IAI since 2012, Spike missiles from Rafael Advanced Defense Technologies and private Israeli defense contractor Elbit Systems has sold self-propelled Cardom mortars and upgraded Russian-made T-72 tanks.

Ya’alon attended the opening of the recent Azerbaijan Defense Industry Exhibition, in which 15 Israeli companies participated. Exhibitors included Elbit Systems, Rafael Advanced Defense Systems, Israel Aerospace Industries, Israel Military Industries and Aeronautics. According to the Jane’s Weekly defense magazine, Azeri recently purchased 12 warships from Israel Shipyards. And according to Globes, UAV manufacturer Aeronautics is very active in Azerbaijan and even has a factory there.

Namer Protection

The Israel Defense Ministry is expected to push for budget to acquire Rafael Advanced Defense Systems Trophy armored active protection systems for its Namer armored personnel carriers. Trophy (called Windbreaker in Hebrew) reportedly intercepted and destroyed at least 10 anti-tank projectiles fired at Merkava Mark IV tanks, which are equipped with the system. Trophy was chosen over Israel Military Industries Iron Fist, previously selected to protect Namer APCs, because it proved effective in combat situations. Now in its second generation, Trophy – which uses radar from IAI’s Elta subsidiary – costs about NIS 2M per vehicle.

C-O-S Field Narrowed

Defense Minister Moshe Ya’alon has ruled that the choice of the next chief of staff, to succeed Lt. Gen. Benny Gantz, will be limited to officers currently serving in the Israel Defense Forces. The move eliminates a mooted candidacy of Yoav Galant, whose 2011 appointment to the army’s top post was canceled due to violations of land use laws. It leaves three men as the main contenders for the position – Maj. Gen. Gadi Eizenkot, the current deputy c-o-s; Maj. Gen. Yair Naveh, who was deputy c-o-s for the first half of incumbent Gantz’s term and Maj.-Gen. Yair Golan, currently head of the IDF’s Northern Command.

Iron Dome Head Promoted

Col. Zvika Haimovitch, commander of the IDF’s Active Defense wing responsible for the Arrow and Iron Dome missile defense systems, has been named head of air defense and promoted to brigadier-general.

The 8200 Controversy

A letter signed by 43 reservists in Israel’s famed 8200 intelligence unit has raised a storm of controversy. In the letter to Prime Minister Netanyahu and top military officers, the former soldiers said they would consider refusing a call-up to reserve duty because gathering intelligence (8200’s main mission is signals intelligence, electronic monitoring of communications, aka SIGINT) against ordinary Palestinians “harms innocents and serves for political persecution and sowing discord in Palestinian society.”

Publication of the letter in the press evoked an immediate response from other former members of the elite unit, who said that the letter’s initiators were taking a political position and that refusal to serve “on the basis of politics has no place in the IDF, certainly not in 8200.” In their letter of response, 200 former 8200 soldiers said that the unit is not involved in immoral spy tactics against innocent Palestinian civilians. “As people who know from their own experience what the unit has done over the years, we cannot make peace with the accusations of lack of ethical and moral standards in the unit’s work,’ they wrote. “Over the years we have witnessed countless incidents in which our work has saved lives on both sides. Moreover, when ethical dilemmas arose, we saw they were seriously and maturely addressed in accordance with international law and the IDF’s ethical code.”

8200 is Israel’s main signals intelligence body, serving the same function carried out by entire agencies such as the US NSA and Britain’s GCHQ. Many of its former soldiers have become high-tech entrepreneurs after completing their military service.

Unmanned APC

The Israel Defense Forces deployed an unmanned M113 armored personnel carrier to supply combat troops during Operation Protective Edge, according to a report in Israel Today free newspaper. Only one such vehicle was used in the fighting. According to the report, the remote-controlled vehicle can travel at 50 kph and carry up to 4 tons of materiel.

New SIBAT Head

Michel Ben-Baruch has been appointed head of SIBAT, the Defense Ministry’s International Defense Cooperation Agency responsible for coordinating the country’s defense exports. Ben-Baruch, 51, a reserve brigadier general, served as a senior aide to Defense Minister Moshe Ya’alon and as chief artillery officer.

Aid for UAV Exporters?

Israel’s Defense Ministry reportedly is considering moves to assist Israeli manufacturers export unmanned aerial vehicles. According to a report in Globes, Haim Cohen, head of the ministry’s Administration for Weapons and Technology Infrastructure R&D, said his ministry is eyeing small stipends for export of small UAVs intended for the civilian public security market. The bottom line, Cohen appeared to suggest, was improving the capabilities of UAVs deployed by the Israeli military.