Hit to Israeli Economy May Be Minimal: Fischer

World ‘Close’ to Recession: Stanley Fischer

The fighting between Israel and Hamas in Gaza is likely to have only a limited impact on Israel's economy if it ends quickly, Bank of Israel governor Stanley Fischer told CNBC's "Closing Bell" on Tuesday.

"If this ends in a day or two, we'll come out of it without much impact on the economy despite all the very difficult scenes that we're seeing at the moment," Fischer said.

Pointing to the war in 2006, Fischer said that they tend to have an impact while they're going on but then the economy bounces back sharply.

The United States signaled on Tuesday that a Gaza truce could take days to achieve after Hamas, the Palestinian enclave's ruling Islamist militants, backed away from an assurance that it would stop exchanging fire with Israel within hours. (Read More: Clinton Suggests Gaza Cease-Fire Could Take Days.)

The Israeli economy is also starting out in a fairly strong position. "The inflation rate is at 2 percent, the balance of payments is more or less balanced, the stock market has been rising lately, and we're at pretty close to full employment so most of the indicators are very positive," the central banker said.

He said that the economy is run carefully, Israel should come through this with growth at around 3 percent. That is lower than the central bank would like, but still strong considering the slow growth around the world.

But he cautioned, "The more fighting that goes on, the longer it goes on, the more intense it is, the more immediate the damage and the longer it will take to recover from it."