That expertise was on show this month at a Tel Aviv armaments expo that attracted thousands of security officials from around the world, drawn by the selling point that the systems on offer were "combat proven."
To end the occupation would be to sacrifice all this and revert to being a tiny anonymous state without notable exports.
And finally the settlers are among the most ideologically committed and entitled sectors of Israel's population. Were they moved out, they would bring their group cohesion and profound resentments into Israel.
No Israeli leader wants to unleash a civil war that could rip apart the already fragile sense of unity among the Jewish population.
The reality is that most Israelis' perception of their national interests, both as a Jewish state and as a military power, are intimately tied to a permanent occupation and the exclusion of Israel's Palestinian minority from true citizenship.
If there is a conclusion to be drawn from these two reports it has to be a pessimistic one.
Israel's internal economy is likely to grow gradually weaker because both the ultra-Orthodox and Palestinian labor forces are underutilized. As a result, the focus of Israel's economic interests and activity is likely to shift even more towards the occupied territories.
Far from Israelis rethinking their oppressive policies towards the Palestinians, the ideological blinkers imposed by Zionism could push them to pursue the benefits of the occupation even more aggressively.
If the watching world really wants peace, economic wishful thinking will not suffice. It is past the time simply for carrots. Sticks are needed too.
A version of this article first appeared in The National, Abu Dhabi.
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