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Tourism has plummeted and trade between the Jewish state and the Palestinian Authority — which Selinger described as "quite substantial in recent years" — has dwindled to nearly nothing.

That adds up to estimated losses of between $1 and $2 billion or about 1.5 percent of Israel's Gross National Product, as a result of the unrest, he said.

Selinger put the best face on the situation, however, explaining, "It could have been much worse. The past two years have been the best in the history of the Israeli economy."

Meanwhile, defensive actions by the Israel Defense Force, police and security services are soaking up extra funds.

"On top of it all," added Selinger, "IDF has redeployed in the north — there's a new border between Israel and Lebanon."

With these new demands on state coffers, the Jewish state is aiming for bond sales next year to match the high of 1992.

Normally, said Selinger, annual sales stand at between $900 and $950 million.

To reach the new goal, he said, will require targeting some new contributors.

"The encouraging thing is that we do see new faces at our activities in the United States — and also in South America and Europe," Selinger noted.

— Washington Jewish Week