US-Iran Military Escalation and Regional Fallout Dominate Israel's Security and Political Landscape

Regional war fears spike as Iran retaliates against US forces and Houthis threaten key waterways.

US-Iran Strikes Escalate, Strait of Hormuz Disrupted — The week saw a sharp escalation in US-Iran military hostilities. Iran launched missiles at US forces in Kuwait and attacked US warships near the Strait of Hormuz; the US retaliated with multiple waves of strikes on Iranian coastal defense, missile sites, and infrastructure, including Kharg Island and Chabahar port. The Strait of Hormuz was 70-75% closed, with oil prices surging and only eight ships passing through by week's end. Houthi forces in Yemen threatened to close the Bab el-Mandeb strait, further spiking oil prices. Israel coordinated with CENTCOM on potential participation in US strikes, but remained not directly involved, though assessments warned it could be drawn into the confrontation within days. The IDF continued operations in Lebanon, eliminating Hezbollah operatives, and in Gaza, killing a Hamas sniper commander. The UK designated Iran's IRGC as a terrorist organization, while a Turkish court issued an international arrest warrant for Netanyahu over the Mavi Marmara incident. Knesset Legislative Blitz and Coalition Infighting — The Knesset rushed to pass legislation before its dissolution on July 17, with election day set for October 27. Key laws passed include the Combat Stress Reaction Law for PTSD soldiers, a Basic Law enshrining Torah study, a gender segregation law in academia, and a law allowing local councils without residents. The government also approved diverting NIS 600 million from Arab society budgets to police and Shin Bet. Coalition infighting was rife: Likud MKs challenged Netanyahu's reserved slots, MK Dan Illouz left the party, and Sharren Haskel launched a new 'Israel First' party. Haredi parties demanded permanent conscription exemptions, leading to tensions with IDF Chief of Staff Zamir. Polls showed Eisenkot leading Netanyahu, and Shas signaled possible support for Eisenkot. The Knesset also approved a 32-month mandatory service extension amid a manpower shortage of 12,000 soldiers. Surge in Organized Crime and Deepening Societal Rifts — A wave of organized crime swept the country, with grenade attacks on Japanika sushi chain branches, a stabbing in Jaffa, and a mas