Leaders push northern Israel recovery to top of election agenda

Hundreds of political, business and civic leaders gathered in Kiryat Shmona ahead of Israel’s Oct. 27 election to argue that rebuilding the Galilee border region must become a national priority. The event spotlighted competing plans for tax breaks, public investment and new regional governance, while also producing a cross-border business dialogue with a Lebanese investor.

Why it matters: - Northern Israel has spent three years in war and prolonged evacuation, leaving the region with damaged businesses, lost residents and a weakened local economy. - Speakers framed the Galilee not just as a reconstruction project, but as a potential growth engine for Israel’s next government. - The conference showed a rare consensus that the north needs more than short-term aid.

What happened: - Hundreds of guests gathered Tuesday in Kiryat Shmona, on Israel’s Galilee northern border, one week before the national election. - The conference, titled “Choosing the North: From Reconstruction to Israel’s Next Growth Engine,” was organized by TheMarker and Margalit Startup City Galil. - Political leaders, mayors, investors, entrepreneurs, business executives and residents attended. - The event focused on how to restore population and employment, attract companies and private investment, rebuild infrastructure and reposition the region for growth. - Dr. Erel Margalit, founder and executive chairman of JVP and Margalit Startup City, called for a large-scale government incentive program to bring businesses and workers back to the Galilee. - The conference brought together candidates from several political parties to present competing approaches before the Oct. 27 election.

The details: - Margalit said the north once had 204 technology companies in food technology, agriculture and climate before the war. - Margalit said Hezbollah attacks triggered an evacuation that drove almost all of those startups out of the region. - Margalit proposed zero income tax and a government subsidy covering 50% of salary costs for companies hiring in the Galilee for five years. - Margalit pointed to a previous state program in Beersheba that subsidized 40% of an employee’s salary for five years, up to a salary of $10,000 a month. - MK Naama Lazimi, No. 2 on The Democrats’ list, said tax incentives alone would not be enough. - Lazimi called for direct government investment in housing, infrastructure and public services, along with grants and housing subsidies. - Keren Turner, a candidate for Naftali Bennett’s Beyachad party and former director general of the Finance and Transportation ministries, proposed an income-tax exemption on annual income up to NIS 1 million. - Turner also proposed a 45% reduction in municipal property tax, plus reduced corporate taxation and municipal-tax discounts. - Turner said northern Israel needs a dedicated law for the confrontation line, similar in effect to the Tekuma Law. - Shaul Meridor, former head of the Finance Ministry’s Budget Department and a member of Yashar! with Eisenkot, said the recovery effort needs a legally established authority with a budget, targets and a regional base. - Meridor said the government should come to Kiryat Shmona rather than requiring local leaders to travel to Jerusalem. - Kiryat Shmona Mayor Avichai Stern said the city has about 16,000 residents today, compared with around 26,000 before the war. - Stern said roughly 40% of the city’s pre-war population has still not returned. - Stern said security concerns remain a major barrier for many families. - Tali Tzur Avner, CEO of Jewish National Fund-USA in Israel, said the organization’s long-term goal is to bring 300,000 additional residents to northern Israel. - Tzur Avner said population growth depends on jobs, education and quality of life, not just funding. - Imad Telhami, founder and chairman of Babcom Centers, said investment in Arab society is a national growth opportunity. - Senior participants also included representatives from Tel-Hai University, MIGAL Research Institute, Cisco, Bank Hapoalim, Earnix, ThetaRay, JVP, GAIA Partners, Fresh Start and the regional agrifood-tech ecosystem.

Between the lines: - The debate in Kiryat Shmona exposed a split between policymakers who favor tax-led recovery and those who want deeper state intervention. - The repeated focus on population return suggests the north’s recovery depends as much on trust and security as on economics. - Margalit’s appeal for a region-specific incentive package reflects a broader Israeli playbook: use state-backed business subsidies to seed new growth centers. - The participation of business leaders alongside elected officials underscored a message that private capital will likely be part of the rebuilding effort. - The exchange with Lebanese investor Jean Salame suggested some regional business figures see economic cooperation as possible even amid political hostility. - Salame said a silent majority in Lebanon wants cooperation with Israel and argued that businesspeople should lead where politicians have failed. - Margalit and Salame agreed to convene a follow-up meeting of Israeli, Lebanese and other regional investors in a neutral country. - The two also agreed to establish a joint roundtable to identify concrete opportunities for cooperation through technology and innovation.

What’s next: - Israeli voters will choose a new government on Oct. 27, and the north’s recovery is now part of the election conversation. - The follow-up investor meeting and regional roundtable are expected to begin identifying specific cooperation opportunities. - Any major recovery plan will need to answer how to bring residents back, create jobs and rebuild confidence in the border region.

The bottom line: - Northern Israel’s leaders are pushing for more than reconstruction. They want a state-backed economic reset that can bring people back, attract business and turn the Galilee into a long-term engine of growth.