Moody's and Fitch announced that they had placed under review the rating of Israel's long-term sovereign debt (currently A1), in preparation for the possibility of lowering it due to the ongoing war between the Hebrew state and the Hamas movement.

Moody's announced this decision in a statement (Thursday), two days after a similar move by Fitch, which placed under negative monitoring Israel's long-term and short-term sovereign debt in foreign and local currencies.

Fitch justified the possibility of downgrading the rating (Tuesday) “by the increasing risk that the current conflict in Israel will expand to include widespread military clashes with many actors, for a long period.” “Hezbollah, other regional armed groups, and Iran,” the agency reported.

For its part, Moody's said, "This review was decided due to the sudden and violent conflict between Israel and Hamas," warning that the most dangerous repercussions of this conflict are its "human cost." She stressed that this announcement is “related to the repercussions of recent incidents on credit.”

Recalling that its expectations for Israeli sovereign debt “were previously stable,” Moody’s said that it would study during the review the future of the current war and its repercussions.

She said that during this review, she will “assess whether it is possible for the conflict to move toward a solution, or whether there is a possibility of a significant and prolonged escalation.”

Moody's explained, “The review will focus on the potential duration and scope of the conflict, and on evaluating its effects on Israeli institutions, especially the effectiveness of its policies, public finances, and economy.”

Moody's noted that "the review period could be longer than the usual three months." She particularly noted the unusual nature of this war compared to previous ones.

Moody's warned that “the longer and more intense the military conflict is, the greater its impact on the effectiveness of policies, public finances and the economy” in Israel.

Moody's added, "Even if the dispute is short-term, it could have an impact on credit."

Fitch said that the rating may not be downgraded if there is “de-escalation, which reduces the risks of a long-term material impact on the economy and public finances” of Israel.