Finance Minister Bezalel Smotrich said on Wednesday that Israel should explore real estate development in the Gaza Strip as a way to help finance the ongoing war while speaking at the Urban Renewal Conference hosted by Madlan and the Real Estate Center. The event occurred as the European Union announced plans to impose personal sanctions against him.
Smotrich addressed the country’s economic outlook, the absence of Palestinian labor in the construction industry, Prime Minister Benjamin Netanyahu’s “Sparta and Athens” speech, and efforts to rehabilitate areas evacuated during the war, including Kiryat Shmona.
He said he has already begun speaking with American officials about resettling Gaza, and argued that such a move could be economically viable.
“There’s a business plan, prepared by the most professional people, that’s sitting on President Trump’s desk,” he said. “There’s a real estate bonanza there. This is how it pays for itself. I’ve started negotiations with the Americans. I’m not joking. I had a serious conversation with them. I’m not asking for much. We paid a huge amount for this war. Now we need to determine how to divide the percentages of the land. We’ve completed the demolition phase. Now it’s time to build.”
When asked about Netanyahu’s controversial comparison of Israel to Sparta, Smotrich dismissed the political uproar and instead pointed to financial indicators.
“I suggest we all pay less attention to people with an agenda and instead look at the numbers,” he said. “In the end, investors sitting at the stock exchange do their analysis, and if they’re investing, the data speaks for itself.”
He added that political debates should not interfere with economic policy, saying the shekel remained strong, and the high-tech and job markets were holding steady.
“Let’s take politics out of the economy,” he said. “The economy can stand apart from this... The real estate sector is undergoing positive changes. I’m thankful for this challenge. It’s forcing us to act differently.”
Still, he said he did not agree with Netanyahu’s Sparta comparison.
“Some countries, as they move closer to Islam, impose arms embargoes. Launching a blitz of self-production isn’t the right move. I really didn’t like the comparison to Sparta. We will have to strengthen our military power, to be even stronger.”
Palestinian labor “like a drug”
Smotrich said that the absence of Palestinian workers, following restrictions after October 7, was prompting the construction sector to evolve.
“There’s hardly any country still using the foolish method of blocks and concrete,” he said. “I met with developers who told me, ‘The Palestinians were like a drug. We knew it was bad for us, and we couldn’t quit.’ This will force us to adopt more innovative methods.”
During the panel, interviewer Nimrod Bousso presented figures showing a 35% decline in contractor home sales (as of July 25), a 12% drop in housing starts, and a 6% increase in construction costs. He asked what Smotrich intended to do in response.
Smotrich shrugged off the concern.
“Don’t be mad at me, I’m not afraid,” he said.
Some in the audience shouted “Disconnected!” but Smotrich pushed forward.
“I’m not afraid of a market that shifts from sellers to buyers,” he said. “The banks are making a lot, the state is making a lot, and only the Israeli citizens are losing. We’ve tripled the number of foreign workers, and we’ll bring even more. The slowdown is, overall, a good thing for the real estate sector.”
Turning to the North, Smotrich said the government must prioritize rehabilitating evacuated communities.
“The State of Israel cannot confine itself to the area between Gedera and Hadera.”
When an audience member shouted, “Who’s going to live there if there are no jobs?” Smotrich replied that infrastructure development would create demand.
“All the housing units will be snapped up like hotcakes. We’ll bring it with mega roof agreements.”
Bousso challenged him, saying funding promised for the North had not materialized.
“One thing isn’t happening in the periphery because there’s no economic feasibility,” Bousso said. “And the reason there isn’t is that we need you. The money you committed still hasn’t arrived.”
Smotrich said the funds were allocated but conditional.
“I have no interest in letting NIS 100 million sit in the budget if there are still no residents in Kiryat Shmona,” he said. “What’s needed there is infrastructure, education and employment. I’m very optimistic. I see the same thing happening in the South. Look at Sderot and the Gaza border region. We signed a very large roof agreement with Sderot, NIS 550 million in that framework, with the municipalities we’ve signed agreements with.”
Bousso said the agreements had not yet been signed.
“There was a delay,” Smotrich acknowledged, “but they’ll be signed. And they’ll be signed quickly.”
Asked if he was personally engaged enough, Smotrich rejected the implication.
“You’re quoting others,” he said. “At the end of the day, the formula is supply and demand. We’ve done, and we’re doing. I approach this according to my professional approach and worldview. I’m not saying anyone else is less professional or less engaged. I’m very optimistic.”
He said delays in building were structural, not political.
“What’s happening now is the healthiest and best kind of economic evolution. The market will look much better. Where are the bottlenecks? It just takes a lot of time. On average, 14 years pass before building begins. I wanted to build a fast-track path, but there was disagreement with the Finance Ministry, which blocked the plan due to property rights of residents in buildings that no longer exist.”
Hostage issue sparks confrontation
As the session wrapped up, audience members began shouting about the hostages still held in Gaza, accusing Smotrich of ignoring the issue.
“What have you done for the hostages? You’re disconnected!” one person shouted.
Smotrich asked that the discussion remain focused on real estate, but the criticism escalated.
“You’re spouting slogans,” one attendee said, while another yelled, “Recruit the haredim!”
Smotrich eventually addressed the issue, presenting his position on the hostages, though by that point, the session had become heated.