How the Israel-Hamas war in Gaza could go global in 2024

A parade of US officials have descended upon Israel and Arab countries in recent weeks to meet local leaders and determine an end-game to the Israel-Hamas war.

They followed President Biden, who sat in on Israel’s War Cabinet back in October. 

At 11 weeks, it is the longest campaign in a century of Arab-Israeli conflict.

And with the death toll in Gaza surpassing 20,000 (including 7,000 armed Hamas members), it’s also the deadliest for civilians. 

This extraordinary US involvement reflects the recognition that the conflict could easily become regional — if not extend across the entire planet.

“The Israel-Hamas war exposes the delicate equilibrium of our hyper-globalized world,” wrote MarketWatch columnist Jurica Dujmovic just after the Hamas attack. 

Here are many of the key reasons how — and why — that delicate equilibrium could be upended in 2024. 

The Houthis

The militant Iran-backed Shiite Houthis have emerged as unlikely players in the Israel-Hamas conflict.

They control much of Yemen and can block Red Sea access to the Suez Canal, through which some 30% of global container trade passes. 

The Houthis have fired at ships linked to over 35 countries, and forced the American, British and French to shoot down drones and missiles from the sky — nearly 20 in just one day this past week. 

This pesky business has spooked major shipping companies, who have rerouted their ships around Africa, adding weeks (and costs) to their journeys.

Traffic through the Red Sea has dropped by about a third, a disaster for Egypt, which depends on Suez Canal transit fees for as much as one-fourth of its foreign currency earnings. 

With 20% of Suez traffic comprised of oil, ongoing Houthi aggression will almost certainly see crude prices rise in 2024 as Egypt slaps on a new 15% fee for tanker traffic. 

It would also imperil industries reliant on just-in-time manufacturing for crucial components and raw materials, such as auto- and electronics-makers.

Chinese car-makers already predict weaker global sales next year, which they’d hoped would offset a nagging domestic slump. 

Beyond the immediate costs of the Houthi escalation, its trade disruptions could hit the world economy hard in 2024.

In late December, for instance, the Organization for Economic Cooperation and Development estimated that global growth would increase at its slowest rate since the pandemic. 

Hezbollah

It is hard to overstate the danger of Hezbollah, which like the Houthis, are a proxy of Iran.

Given the weakness of the Lebanese state — the country possesses neither a president nor military chief — Hezbollah has become a militia with a country. 

The group’s initial low-level shelling of Israel surged this past week with dozens of rockets fired daily.

Despite the provocations, Israel remains leery of a full-scale war on its northern front — especially as clashes with Palestinians boil over in the West Bank.

But with nearly 2,000 rockets fired since October by Hezbollah — resulting in 15 dead and some 100,000 displaced from their homes — Israeli patience is waning. 

“We are being attacked by the country of Lebanon even if not the army of Lebanon and it’s time they paid a price,” said Gen. Dan Harel, former director-general of the Defense Ministry last week. 

Both Israel and the US are well aware of the severity of the Hezbollah threat.

According to a recent report by Israel’s Institute for National Security Studies (INSS) Hezbollah possesses up to 100,000 fighters and 200,000 missiles, including 30,000 long-range rockets that can reach Tel Aviv — along with Scuds missiles capable of evading Israel’s Iron Dome defense system.

With a pair of carrier groups already in the Mediterranean, the US is unlikely to stand by idly if Hezbollah bombardments escalate into a full-on assault. 

Iran and terrorism

Iran is not merely a patron of Hamas, Hezbollah and the Houthis, but a direct antagonist.

And the regime of the mullahs is the only player to clearly benefit from this war.

A long-awaited peace plan between Israel and Saudi Arabia has been put on hold – as has its end-goal of forming a bulwark against Iran’s aggressions. 

An emboldened Iran spells trouble on many fronts.

Even as the war rages in Gaza, Iran has been revving up its war machine, testing air-to-ground missiles as well as glide bombs dropped from unmanned aerial vehicles.

All could ultimately wind up in the hands of its proxies like Hamas and Hezbollah.

Oh, and Iran is now enriching its uranium stocks with worrisome new vigor, according to a report this week from the International Atomic Energy Agency. 

Despite its reticence, the US is being drawn ever closer into a confrontation with Iran.

Earlier this month the US Air Force killed five militia members during an attack on a drone launch site near the Iraqi city of Kirkuk.

The site belonged to the Iran-backed Islamic Resistance in Iraq, which the US says has launched dozens of attacks on its forces in since the war began in Gaza. 

Biden ordered new retaliatory airstrikes following yet another attack on US troops in Iraq last week. 

Meanwhile, Israel is also targeting Iranian efforts in Syria to aid and arm Hezbollah.

This week, 11 Iranian Revolutionary Guard-members were killed outside Damascus, reportedly by Israel. 

Beyond the region, the Iranian threat is also rising.

In December, the Mossad foiled an Iranian plot targeting Israelis and Jews in Cyprus; the Danish government also arrested a pair of terror suspects with alleged links to Hamas. A similar situation played out in Brazil in early November. 

France, which saw a deadly knifing last month, is particularly nervous about terror as it prepares to host the 2024 Summer Olympics.

Pres. Emmanuel Macron recently said he’s considering relocating the Opening Ceremonies away from the River Seine, where thousands of vulnerable spectators are expected to attend.

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US and European politics

The Gaza conflict could have profound impact on global politics.

In the US, Biden’s base of younger, progressive and minority voters is openly revolting against his Gaza agenda.

And reduced turnout from these demographics could doom him in crucial swing states, particularly Michigan, where Arab and Muslim voters helped Biden secure the White House in 2020. 

Four years on, Biden’s Israel support is jeopardizing a repeat performance: An early November poll of state Democrats revealed that two-thirds of Michigan’s Arab-Muslim voters are considering voting against the president’s reelection. 

Similar sentiments are emerging from another crucial Democratic constituency, African-Americans: A poll this month by AP and the NORCE Center for Public Affairs Research showed some 44% of blacks believe the US is too supportive of Israel, well above Whites and Hispanics.

These figures are only expected to worsen as the war drags into 2024. 

In Europe, the Gaza crisis is pushing voters rightward, as leaders such as Holland’s Geert Wilders — who dominated the nation’s recent parliamentary elections — capitalize on fears of Muslim extremism.

Regional elections in Germany, France — as well as the European Union — could also see a shift towards the right. 

Israeli Tech

After Oct. 7, about 60,000 Israelis from the country’s vaunted high-tech sector were drafted into the military – a 10th of its total workforce. 

Tech comprises nearly 20% of Israel’s total economy, some $100 billion in total, including $3.1 billion alone invested in generative AI, a number exceeded only by China and the US. 

Upwards of 25% of all global cybersecurity investment is in Israel, and Avi Hasson, CEO of Startup Nation Central, an NGO promoting Israeli innovation, notes the nation is home to sizable tech-based R+D centers for more than 450 companies including NVidia, Meta and Alphabet. 

Overall, technology accounts for half of Israel’s exports.

Tech “has a level of global relevance [in Israel] to an astounding degree,” says Zoe Burian, founder of Startup Reserves, which is working with thousands of global tech professionals to take over for Israeli reservists called to serve in the war.

Little wonder Israel’s GDP is predicted to contract by 2% this quarter. 

But the impact could easily extend beyond Israel if tech exports begin to slow down, which looks likely. 

Some 70% of Israeli tech-firms have reported operations disruptions and cancellations since October — along with difficulty securing new financing.

Investment in Israeli tech start-ups plunged 56% in 2023, the worst performance in half a decade.

Ukraine and Taiwan

Ukraine has survived Russia’s two-year invasion because of US and Western support.

But as Congress grapples with funding for Israel, it’s chafing at more aid to Kyiv.

The world is distracted by Gaza, providing an emboldened Russian President Vladimir Putin with further reason to redouble his military machine in Ukraine, as witnessed this week.

Such an escalation would be felt far beyond Eastern Europe.

The Ukraine war has been described as a “massive and historic energy shock” by the OECD, spiking global inflation and decimating economic growth, most notably in Europe.

Growth across the Eurozone is already expected to slide further in 2024, according to a recent OECD report, to a mere 1.4%, the lowest in the entire G20.

Beyond the economic costs, it’s hard to overstate the repetitional damage to Brand America if Putin pounces while Gaza rages, particularly if Putin moves on to Moldova and the Baltics, as feared.

The most worrisome fallout, however, could take place in China — which has been publicly supportive of Hamas as a charter member of a new “axis of evil” with Russia and Iran. 

Like Putin, Chinese leader Xi Jinping sees opportunity in a distracted US, most notably the fulfillment of China’s decades-old promise to retake Taiwan, which it sees as historically Chinese.

This would inevitably lead to a US response, potentially dragging America into a war in the South China Sea ignited, almost unimaginably, by Islamists in Gaza. 

Dan Perry is the former Associated Press regional editor for Europe, Africa and the Middle East and the author of two books about Israel.