France, Oct. 7 -- Having long sold itself as the 'start-up nation', Israel is now in economic turmoil, with the war it is waging in Gaza resulting in the withdrawal of long-standing partners. Declining growth, a brain drain and diplomatic isolation are diminishing a model that was considered exemplary.

Israelhas established itself one recent years as a major player in technological innovation. The country is home to large companies in the sector and is a major exporter of software, medical devices and cybersecurity technology.

But since the start of the war in Gaza and amid rising tensions with Iran, the country has entered a new economic era - and the figures speak for themselves.

In the last quarter, Israel's GDP contracted sharply. ...