A bombshell fell on Israel last weekend, only this one originated in Nebraska, not Gaza. Unlike the Kassam rockets fired daily at Israel which no longer attract much media attention, the shot fired from Omaha was heard round the Jewish state.

Warren Buffett, the second richest man in the world, and an oracle even among investment gurus, announced at Berkshire Hathaway’s annual meeting that the company would spend $4 billion to acquire an 80% stake in Iscar, a privately held Israeli metalworking company based in the Galilee.

No doubt, for the thousands of shareholders in attendance, the announcement elicited a uniform response: “Iscar?” Largely unknown outside of Israel, the private company is not even a household name within it, though the Wertheimer family, which founded and has run the company for over half a century, are well-known businessmen and philanthropists. They are sure to be even more renowned since the sale of Iscar will reportedly make them the wealthiest family in Israel, their fortune surpassing that of Shari Arison, daughter and heiress of the late shipping magnate Ted Arison.

What makes Mr. Buffett’s decision to purchase Iscar all the more remarkable is that it is Mr. Buffet’s first investment of this size outside the United States. That he would choose Israel of all places only makes the deal that much sweeter for Israelis.

Israelis have long been proud of the Israel that exists beyond the headlines, beyond the security, diplomatic and political coverage that dominates international news coverage of the country. Even those abroad who closely follow events in Israel are often shocked to hear that Israel has more companies listed on Nasdaq than does any country outside of North America, that there are more high-tech start-ups, engineers, scientific publications and R&D spending per capita in Israel than anywhere else, and that Israel has more U.S. registered patents than China, Russia and India combined. This would be remarkable for any country, yet for one the size of New Jersey that is home to barely seven million people, it is nothing short of miraculous.

But the decision of the so-called Wizard of Omaha to invest in an Israeli company speaks louder than any of the statistics. Mr. Buffett is no misty-eyed Zionist who is willing, as the old saying goes, to make a small fortune in Israel by arriving with a large fortune. He is not driven by ideology or sentimentalism, but rather looks at investing in Israel no differently than he would at investing in any other country.

Of course, there have been others smart enough to invest in Israel for purely financial reasons. Silicon Wadi, the moniker aptly given to Israel’s flourishing high-tech industry, has attracted firms such as Intel and Motorola which are eager to establish R &D centers that take advantage of the country’s unrivaled human capital.

Recently, Israel’s investment climate got a further boost from free market reforms spearheaded by former Finance Minister, Benjamin Netanyahu. In little more than two years, Netanyahu succeeded in making Israel’s economy significantly more competitive by sharply cutting government spending, reducing taxes, privatizing state-owned companies, and reforming both the pension system and capital markets.

Now comes Warren Buffett. Mr. Buffett’s decision to buy Iscar is an unprecedented vote of confidence in a country that yearns for stability and continuity from a man whose whole investment ethos is based on stability and continuity.

By spending billions to buy an Israeli firm and by saying that “now is the time to invest in Israel,” Mr. Buffet has signaled investors around the globe who were not paying attention to Israel’s enormous economic potential that this dynamic country should be on their radar screens.

But Mr. Buffett has also sent a message of confidence in Israel that no president or prime minister can match. Indeed, without knowing or intending it, the billionaire has lifted the spirits of an entire country. For when a man like Warren Buffett invests in Israel, he sends a message to every Israeli that they have a future worth investing in. That is a message all Israelis have taken to heart, and one that will hopefully convince many others to take a fresh look at the Jewish state — a place where history has been reborn, where the desert blooms, and where you can make a lot of money.

Mr. Dermer is minister of economic affairs at the Israeli Embassy in Washington and coauthor, with Natan Sharansky, of “The Case For Democracy.”