The Cost of October 7 and everything that followed

 

The Cost of October 7 and everything that followed

The Extraordinary Asymmetry in Costs and Results

R.M. Westerink; October 2026 

 

In brief. Violence was cheap to start and extremely expensive to answer.
The October 7 attack probably cost Hamas millions to tens of millions of dollars.
Israel’s war has cost about $100 billion, the United States has committed tens of billions more, rebuilding Gaza is estimated at $71.4 billion, and more than 74,000 Palestinian deaths have been reported.
Three years on, only 27% of Israelis say Israel has won the Gaza campaign. The figures measure different things and should not be added together; their message is about scale. Escalation multiplies costs, and spending does not by itself buy security or a political settlement.

On 7 October 2023, Hamas launched an attack on Israel that killed about 1,200 people and took 251 hostages. It required years of preparation: training, weapons, rockets, drones, explosives and vehicles. Yet its direct financial cost appears to have been small, probably millions or perhaps tens of millions of dollars, although no authoritative public accounting exists.

Three years later, the consequences are measured on a different scale. The Bank of Israel estimates Israel’s war-related fiscal cost for 2023–2026 at about NIS 350 billion, roughly $100 billion. The United States has supplied tens of billions in military assistance and spent billions more on related regional operations. Gaza has suffered massive loss of life, displacement and destruction, and its recovery and reconstruction needs are estimated at about $71.4 billion.

That contrast is illuminating: violence can be cheap to initiate and extraordinarily expensive to respond to, survive and repair. But the figures should not be collapsed into one grand total. Military spending, destroyed property, humanitarian aid, future reconstruction and human lives are different things.
The useful question is not “What is the final bill?” but what the attack set in motion, and how its costs multiplied.

The Asymmetry at a Glance

The table below summarizes the main figures used in this article. They measure different things (costs, damage, needs and lives), so they are shown side by side and not added up.

Stage	Scale	Who carries it
Planning and launching the attack	Roughly millions to tens of millions of dollars (an estimate; no audited figure exists)	Hamas
Human toll of the attack	About 1,200 killed; 251 taken hostage	Israel
Israel’s war effort, 2023–2026	About NIS 350 billion (roughly $100 billion) in fiscal cost	Israel
Recovery program for southern Israel	About NIS 17.5 billion (roughly $5 billion) over five years	Israel
US support, October 2023–September 2025	$21.7 billion in military aid, plus $9.65–12.07 billion for related regional operations	United States
Reported Palestinian deaths in Gaza	More than 74,000 by October 2026	Gaza
Physical damage in Gaza	About $30 billion (assessed as of October 2024)	Gaza
Gaza recovery and reconstruction needs	About $71.4 billion	Gaza and international donors
Humanitarian appeal for the occupied Palestinian territory, 2026	About $4.06 billion, against a few hundred million dollars a year before the war	International donors

The Hamas figure is an analytical order-of-magnitude range. No authoritative audited cost of preparing and executing the attack is publicly available.

A Comparatively Inexpensive Attack

The weakest number in this account is the one that might seem simplest: what did Hamas spend on October 7? The evidence shows a sophisticated operation prepared over a long period. Thousands of fighters took part, using rockets, drones, explosives, bulldozers, motorcycles, vehicles, boats and powered paragliders. Training and intelligence preparation also cost money.

But Hamas did not buy a new military organization for one morning. Much of the infrastructure, weapons production, tunnel systems, personnel and command structure already existed. Separating the extra cost of October 7 from the continuing cost of maintaining Hamas’s military capability is therefore impossible from public information.

An early CSIS assessment concluded that the operation clearly cost more than $1 million and stressed how hard its full preparation cost is to calculate. No later authoritative audit appears to have solved that problem.[1] The defensible conclusion is deliberately broad: the attack probably required resources measured in millions, perhaps tens of millions, rather than billions.

That uncertainty does not weaken the central observation. Even if the true figure were several times higher, it would remain tiny compared with the military, economic and reconstruction resources spent afterward.

Israel Mobilizes, and the Scale Changes

The immediate Israeli cost was first of all human: about 1,200 people killed and 251 abducted. Communities near Gaza were attacked, homes and businesses were damaged or destroyed, and large populations were evacuated.

Israel then created a large program to recover and develop the affected southern communities. The Tkuma program has a five-year budget of NIS 17.5 billion, roughly $5 billion, and by May 2026 billions of shekels had been allocated to rehabilitation, reconstruction and temporary housing.[2] This is not simply a repair bill for October 7, because it also covers longer-term development. In that sense it resembles, on a much smaller scale, the reconstruction program now envisaged for Gaza.

The far larger number is the cost of the war that followed. The Bank of Israel estimates its fiscal cost at approximately NIS 350 billion over 2023–2026, excluding the separate 2026 Iran campaign.[3] In broad dollar terms, that is around $100 billion.

Defense spending accounts for roughly NIS 243 billion of this; damage compensation, civilian expenditure and additional interest account for much of the rest.[3] The Israeli response thus turned an attack whose direct preparation cost was probably measured in millions into a state war effort measured in tens of billions of dollars.

What the War did to Israel’s Finances

Israel showed that it could absorb an extraordinarily expensive war, but not without changing its public finances. Public debt stood at about 60.5% of GDP before the war and rose to 68.5% by the end of 2025. The Bank of Israel forecasts about 69% for the end of 2026. Roughly half of the estimated NIS 350 billion cost was financed through additional debt; taxes and other fiscal adjustments covered part of the rest.[12]

This does not make Israel financially weak by European standards: its debt ratio remains below that of several major European economies. But the war was not “easily” absorbed. It used up fiscal space built before October 7 and left Israel with structurally higher defense and interest spending.
Israel could afford the war, but only by reprioritizing national resources and accepting a weaker public balance sheet.

America enters the Account

The United States makes the picture larger but more complicated. Brown University’s Costs of War project estimates that the United States provided $21.7 billion in military assistance to Israel between October 2023 and September 2025. It estimates another $9.65–12.07 billion for related US military operations in Yemen, Iran and the wider Middle East in the same period.[4][5]

These numbers should not simply be added to Israel’s roughly $100 billion. American military assistance finances part of Israel’s war effort, so adding it again would double count. The cost of US regional operations, however, is an additional American commitment generated by the widening conflict.

This is another form of asymmetry. The financial consequences of October 7 did not stay between Hamas and Israel. They were passed outward to the United States and, in different forms, to European and Arab governments and international organizations.

Gaza Pays the Other Bill

On the Palestinian side, the consequences are overwhelmingly human and physical.
By the third anniversary of the attack, more than 74,000 Palestinian deaths had been reported in Gaza. The figure comes from Gaza health authorities, and the precise composition and circumstances of casualties remain contested, but the scale of loss is not.[6] Large parts of the population have also faced repeated displacement, injury, the loss of family members, interrupted education and the destruction of homes and livelihoods.

Two financial estimates describe the destruction. A World Bank, United Nations and European Union assessment put physical damage at about $30 billion by October 2024.[7] The updated assessment published in 2026 puts recovery and reconstruction needs at about $71.4 billion.[8]

These two figures measure different things. Physical damage estimates the value of the assets destroyed. Recovery and reconstruction asks what it will cost to rebuild housing, health services, agriculture, businesses, infrastructure and social systems. Rebuilding a functioning society costs considerably more than the assessed value of what was destroyed.

The largest recovery needs are about $16.2 billion for housing, $10.5 billion for agriculture and food systems, $10 billion for health and $9 billion for commerce and industry.[8] The bill therefore extends well beyond replacing buildings: it includes rebuilding people’s capacity to live, work and earn an income.

Gaza was Not Starting From Normal

One qualification is important: it would be misleading to blame all of Gaza’s present dependence on external support on October 7 and the war that followed.

Before the war, Gaza already suffered from high unemployment and poverty, inadequate electricity and water systems, restrictions on movement and trade, and heavy dependence on international assistance. UN humanitarian requirements for the occupied Palestinian territory were typically a few hundred million dollars a year: $348 million in 2020, $510 million in 2022, and an original 2023 plan of $377 million. UNRWA alone spent approximately $568 million in Gaza in 2022.[9][10]

October 7 therefore did not turn a normally functioning economy into an aid-dependent one. Gaza was already structurally dependent on external support.
What changed after October 2023 was the scale and function of that support.

Humanitarian requirements rose from hundreds of millions to several billion dollars a year. For 2026, the UN appeal for the occupied Palestinian territory is about $4.06 billion, with Gaza driving the overwhelming emergency requirement.[11] International assistance increasingly stopped supplementing a weak economy and began substituting for functions that households, businesses, utilities and governments normally provide: food, drinking water, shelter, healthcare, fuel and basic services.

The Second Asymmetry: Destruction and Reconstruction

The financial numbers reveal another imbalance. Destruction can happen quickly, while reconstruction is slow, expensive and institutionally demanding.

A house can be destroyed in seconds and take months or years to replace. A damaged water system needs engineering, materials, energy and institutions to operate it. Destroyed businesses do not return merely because their buildings are rebuilt; capital, employees, customers and confidence must return too. The same is true of agricultural land, hospitals and schools.

This is why Gaza’s $71.4 billion recovery requirement should not be read simply as a bill for war damage. Part of it restores what existed. Part compensates for economic and social losses. And part replaces inadequate pre-war systems with something that can function more sustainably.

Simply recreating Gaza as it existed on 6 October 2023 would recreate many of the weaknesses that already made large-scale international assistance necessary.

The Human Asymmetry

The human figures should be kept apart from the financial account. About 1,200 people were killed in the October 7 attack and 251 were abducted. In the war that followed, the reported Palestinian death toll in Gaza rose above 74,000 by October 2026.[6] Many more people on both sides have been wounded, disabled or psychologically affected.

These numbers should not be given monetary values. Nor does their asymmetry by itself settle questions of intent, responsibility, military necessity or proportionality. Those require separate legal, moral and political analysis.

But the human asymmetry is part of the chain of consequences and cannot disappear behind financial figures. The attack caused catastrophic immediate Israeli losses. The prolonged response caused vastly larger Palestinian casualties and destruction.
The financial and human asymmetries point in the same general direction: escalation multiplies consequences far beyond the resources required to initiate it.

The Bill is Still Running

None of these accounts is closed. Israel will keep carrying defense, veteran, health, compensation and security costs. The United States continues to finance Israeli defense and maintain forces in the region. Gaza still needs large-scale humanitarian support before reconstruction has even reached its eventual scale, and rebuilding could take many years.

Nor have we tried to put a price on everything. Lost Israeli and Palestinian economic output, foregone investment, disrupted education, long-term disability, psychological injury and the opportunity cost of military spending would make the economic consequences larger still.

For that reason, adding the figures into one dramatic grand total would give more apparent precision but less understanding.
What matters are the orders of magnitude and how the burden shifts as the conflict progresses.

How do Israelis Judge the Result?

Money spent does not answer the more important question: what did the expenditure, mobilization and sacrifice achieve? Israeli public opinion is an unusually relevant indicator here. The people judging the result are the society that experienced October 7, supplied the reservists, suffered military and civilian casualties, financed the government and lives with the security consequences.

Three surveys by the Institute for National Security Studies (INSS) show the picture:

Survey	Question	Result
INSS, September 2026 [13]	Did Israel win the Gaza campaign?	27% said yes
INSS, October 2025 [14]	Were the war’s objectives achieved?	44% said completely or to a great extent; 46% said only slightly or not at all. Half said neither Israel nor Hamas had won
INSS, June 2026 [15]	How is Israel’s national-security situation?	20% rated it good or very good; 42% rated it bad or very bad. Only 29% reported a high sense of personal security

 

In short, few Israelis describe the outcome as a victory, opinion is split on whether the war’s goals were met, and only one in five rates the national-security situation as good. These findings coexist with continued strong support among many Israelis for military action against perceived threats. Dissatisfaction with the outcome therefore does not necessarily mean rejection of military force; for some Israelis it can instead mean that the threats have still not been eliminated.

Palestinian suffering also occupies a different place in Israeli public debate than it does internationally. Israeli society is not unaware of Gaza’s destruction, but October 7 remains a powerful frame through which many Israelis understand the war and responsibility for its consequences. Outside Israel, the same events are increasingly viewed through the scale of Palestinian casualties and destruction. That divergence in interpretation is itself part of the unresolved political outcome.

The cost account can now be brought back to a simple question. After roughly $100 billion in Israeli war-related fiscal costs, tens of billions in American military assistance and regional operations, more than 74,000 reported Palestinian deaths, massive destruction and a $71.4 billion Gaza recovery requirement, has a durable strategic result been obtained? Israeli public opinion does not answer with victory. Three years after October 7, most Israelis do not describe the Gaza campaign in those terms.

This does not prove that the military spending was unnecessary or that it brought no security benefits. Capabilities destroyed, attacks prevented and deterrence restored are hard counterfactuals to measure.
But it adds a final asymmetry to the account: the gap between the scale of resources consumed and the uncertainty of the strategic result obtained.

The Economics of Escalation

October 7 exposes a brutal characteristic of modern conflict. A non-state actor can mount an operation at a cost that is small compared with what a state must spend to respond. The response can then produce destruction whose reconstruction costs are larger again. Meanwhile, humanitarian systems spend billions merely sustaining people while political and military decisions prevent normal economic life from returning. The numbers support three findings.

1. Cheap to start, costly to answer.
The Hamas attack appears to have required millions or perhaps tens of millions of dollars. Israel’s war-related fiscal effort is around $100 billion and has helped push public debt from about 60.5% of GDP before the war toward 69%. The United States has committed tens of billions more in military assistance and regional operations. Gaza now faces a $71.4 billion recovery and reconstruction requirement, while humanitarian needs continue to run into billions annually.

2. The costs spread.
The burden did not stay between the two main parties. It passed to the United States, to European and Arab governments and to international organizations, while Gaza faces both the largest human toll and the longest road to recovery.

3. Spending is not the same as success.
Three years after October 7, only 27% of Israelis surveyed by INSS say Israel won the Gaza campaign. Even overwhelming expenditure and military superiority do not automatically buy a durable political settlement or a lasting sense of security.

What the numbers do not show.
They do not establish a simple chain in which every later decision follows mechanically from the original attack.
Hamas chose to launch October 7.
Israel chose the scale and methods of its military response.
The United States chose the extent of its military support and regional involvement.
Hamas and other regional actors made further choices that prolonged and widened the conflict. 

Violence can be comparatively cheap to initiate, vastly more expensive to fight, and more expensive still to recover from. Behind every financial figure lies a human cost for which no reconstruction budget can provide compensation.

References

[1] Center for Strategic and International Studies (CSIS), expert assessment of the preparation, material requirements and intelligence implications of the October 7 attack, October 2023.

[2] Government of Israel, Tkuma Directorate, five-year recovery and development programme for communities affected by October 7; programme updates through 2026.

[3] Bank of Israel, Annual Report 2025 and fiscal assessment of the 2023-2026 war costs: approximately NIS 350-352 billion, excluding the 2026 Iran campaign.

[4] Brown University, Watson Institute, Costs of War, US Military Aid to Israel, October 2023-September 2025: estimated $21.7 billion.

[5] Brown University, Watson Institute, Costs of War, US military operations in the wider Middle East, October 2023-September 2025: estimated $9.65-12.07 billion.

[6] Reuters, 7 October 2026, third-anniversary reporting: approximately 1,200 killed and 251 abducted in the October 7 attack; more than 74,000 Palestinian deaths reported in Gaza by October 2026.

[7] World Bank, United Nations and European Union, Gaza and West Bank Interim Rapid Damage and Needs Assessment, February 2025: approximately $30 billion in physical damage measured through October 2024.

[8] World Bank, United Nations and European Union, Gaza Rapid Damage and Needs Assessment update, April 2026: approximately $71.4 billion in recovery and reconstruction needs.

[9] United Nations OCHA, Humanitarian Response Plans for the occupied Palestinian territory, 2020-2023.

[10] UNRWA, Annual Operational Report 2022: approximately $568 million in expenditure in Gaza.

[11] United Nations OCHA, Flash Appeal for the occupied Palestinian territory 2026: approximately $4.06 billion required.

[12] Bank of Israel, Annual Report 2025 and 2026 Research Department forecasts: public debt approximately 60.5% of GDP before the war, 68.5% at end-2025 and around 69% forecast for end-2026; roughly half of war-related fiscal costs financed through debt.

[13] Institute for National Security Studies (INSS), Three Years Since October 7 survey, September 2026: 27% of Israelis said Israel had won the Gaza campaign.

[14] INSS, October 2025 public opinion survey: 44% assessed the war's objectives as achieved completely or to a great extent, 46% only slightly or not at all; half said neither Israel nor Hamas had won.

[15] INSS, June 2026 public opinion survey: 20% rated Israel's national-security situation good or very good, 42% bad or very bad, and 29% reported a high sense of personal security.