A friend of mine who lived in Israel for a long time and still conducts business there told me today that he doesn’t think the current conflict will last long because Hamas has neither the resources nor manpower to fight a long war.
I think Israel has already pretty much accomplished what it wanted. It has made a strong statement about rocket fire from the Gaza strip that has been going on for months; it has taken out the military leader of Hamas; it has destroyed some launching sites and smuggling tunnels from Egypt used to supply weapons to Hamas and Netanyahu has found a boost in the domestic polls not far ahead of elections.
Hamas will probably get some loosening of the blockade Israel has maintained off the coast. For that, and the harassing rocket fire into Israel Hamas has seen a cost of 116 Palestinian lives, its military leader assasinated and little headway in the hearts of the Gaza Palestinians. I don’t see how they gain much more by dragging this out.
Investment-wise, the Israeli stock market dropped a few percent but gained it back already on today’s rise. Israel’s stock market has dropped 30%+ since Jan 2011 and is only 20% higher than at the lows in March 2009.