In light of the escalating conflict between Israel and the Palestinian military group Hamas, President Yoon Suk Yeol underscored the urgency to address potential economic consequences during a Cabinet meeting Tuesday.

The Israeli government officially declared war on Hamas after the Palestinian militant group launched more than 5,000 rockets into Israel on Saturday. As the conflict enters its third day, nearly 1,500 people are dead and more than 6,000 are injured on both sides.

The South Korean government is closely monitoring the ongoing Israeli-Palestinian conflict, given its economy's strong dependence on trade and sensitivity to rising global oil prices.

“The government must not relax its vigilance, respond quickly to external instability factors and work hard to prevent the hardships of the people from worsening," Yoon said during his opening remarks at a livestreamed meeting.

“If instability in the international financial market grows while interest rates are already elevated, it could influence domestic interest rates, increasing the public's interest burden,” he said. “Ultimately, rising prices and a heightened interest burden could reduce individuals' real income, negatively affecting economic recovery.”

Yoon directed relevant ministries to keep an eye on both domestic and international economic and financial conditions, emphasizing the importance of mitigating economic instability risks.

The government is ramping up market monitoring and crafting response strategies to mitigate any economic impact. Yoon's chief economic secretary, Choi Sang-mok, said in a Monday briefing that uncertainty might grow due to the conflict's escalation. He hinted that he is considering various measures, including further extending the fuel tax cut and limiting increases in public utility rates.

The president also directed a significant bolstering of the security inspection stance.

"Hamas' barrage of rocket attacks on Israel is evolving into full-fledged warfare. While Iran and Hezbollah back Hamas, the US, the UK, France, and Germany support Israel's right to self-defense," he said. Hezbollah is a Lebanese Shia Islamist political party and militant group.

“We cannot rule out the possibility that it may escalate into an international conflict,” he said.

The presidential office is upholding an emergency security stance, and monitoring the situation in the Middle East in real time. The National Security Office is reportedly analyzing numerous factors that might impact Korea's security and economic landscape from various perspectives, which include a trilateral cooperation system with the US and Japan to share information.