Abstract: The vulnerability and feebleness of the political and economic circles of nation-states empirically tally with the analogy of the school of realism in international politics. This study, however delves into the economics of war, defense and military alliances within the framework of global politics and economy. The study analyses the expenditure and finances of defense and military industrial complex among international political blocs, allies and regional or continental cooperative interdependent movements. The results of finding show that Iran and Israel are in one of the most dangerous cold military confrontation in contemporary international politics. The study concludes that due to the nature of Israeli American alliance, it is unequivocally difficult for Iran to win in a period of active war or conflict. The study recommends balance of power, disarmament and two state solutions to the Israeli-Palestinian conflict among other things.