I know the IDF uses Gaza as a testing ground for battle testing new weapons, so it goes both ways.

This is actually true; it’s been discussed with citations in previous HN threads. Elbit systems notoriously used to advertise this on their website (doing R&D on the population of Gaza to bill their drones as “battle tested”) until the latest redesign, but they’re not the only ones.

The least of our worries at the moment... but honestly, the Israeli tech sector is highly intertwined with the army, so I doubt this will damage it in the long run.

How is it intertwined? Startups or big weapons manufacturers?

Israel has brought in 300k reservists. In a country of 9 million, that's a not insignificant percentage of the population.

Many of those are part of the tech sector and are currently not working.

You're assuming that the probability to be drafted is the same for a tech worker as for the rest of the population. I don't know whether that's a valid assumption or not...

I'm not sure of the statistics but this is probably roughly true. Probably higher, actually, as tech workers tend to be more from populations that actually enlist in the military, and tech is a huge sector of the economy.

Both I think. Weapons manufacturers are the obvious one. But more importantly IMO is that there are a couple of tech units in the army (look up 8200 for example) whose graduates start a lot of startups (frequently skipping university). Some of these startups are arms/cyber related, but not necessarily. It's one big feedback loop really.