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Israel: Background and U.S. Relations

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Order Code RL33476 CRS Report for Congress Received through the CRS Web Israel: Background and Relations with the United States Updated November 14, 2006April 30, 2007 Carol Migdalovitz Specialist in Middle Eastern Affairs Foreign Affairs, Defense, and Trade Division Congressional Research Service ˜ The Library of Congress Israel: Background and Relations with the United States Summary On May 14, 1948, the State of Israel declared its independence and was immediately engaged in a war with all of its neighbors. Armed conflict has marked every decade of Israel’s existence. Despite its unstable regional environment, Israel has developed a vibrant parliamentary democracy, albeit with relatively fragile governments. The Kadima Party placed first in the March 28, 2006, Knesset (parliament) election; Prime Minister Ehud Olmert formed a four-party coalition government that has been enlarged to include one more, which another party has since joined. Israel has an advanced industrial, market economy in which the government plays a substantial role. Israel’s foreign policy is focused largely on its region, Europe, and the United States. The government views Iran as an existential threat due to its nuclear ambitions and support for anti-Israel terrorists. Israel concluded a peace treatytreaties with Egypt in 1979 and with Jordan in 1994 but never achieved accords with Syria and Lebanon. It negotiated a series of agreements with the Palestinians in the 1990s, but the Oslo peace process ended in 2000, with the intifadah or uprising against Israeli occupation. Israeli and Palestinian officials have accepted but have not implemented the “Roadmap,” the international framework for achieving a two-state solution to their conflict. Israel unilaterally disengaged from Gaza in summer 2005 and is constructing a security barrier in the West Bank to separate from the Palestinians. The victory of the Hamas terrorist groupHamas in the January 2006 Palestinian parliamentary elections has complicated Israeli-Palestinian relations as Israel will not deal with a government led by or including ministers from a terrorist group. On June 25, the . On June 25, the Hamas military wing kidnaped an Israeli soldier, provoking an Israeli military offensive to force his release. Israel unilaterally withdrew from southern Lebanon in 2000, but; Hezbollah then occupied the area and continued to fire rockets from it into northern Israel. Hezbollah sparked a war when it kidnaped two Israel soldiers on July 12, 2006; a ; a cease-fire took effect on August 14. European countries collectively are Israel’s second largest trading partner, and the EU participates in the peace process. Since 1948, the United States and Israel have developed a close friendship based on common democratic values, religious affinities, and security interests. U.S.-Israeli bilateral relations are multidimensional. The United States is the principal proponent of the Arab-Israeli peace process, but U.S. and Israeli views have differed on various issues, such as the fate of the Golan Heights, Jerusalem, and Israeli settlements. The Bush Administration and Congress supported Israel’s 2006 military campaigns as acts of self-defense. The United States and Israel concluded a free-trade agreement in 1985, and the United States is Israel’s largest trading partner. Israel has historically been the largestis a prominent recipient of U.S. foreign aid. The two countries also have close security relations. Other issues in U.S.-Israeli relations include Israel’s military sales to China, inadequate Israeli protection of U.S. intellectual property, and espionage-related cases. This report replaces CRS Issue Brief IB82008, Israel: Background and Relations with the United States, and will be updated as developments warrant. See also CRS Report RL33530, Israeli-Arab Negotiations: Background, Conflicts, and U.S. Policy, CRS Report RL33566, Lebanon: The Israel-Hamas-Hezbollah Conflict, and CRS Report RL33222, U.S. Foreign Aid to Israel. Contents Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 War and Aftermath . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Political Scene . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Winograd Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Historical Overview of Israel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Government and Politics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Recent Political Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Current Government and Politics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Scandals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 Current Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 Foreign Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 910 Middle East . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 910 Iran . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 910 Palestinian Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1012 Egypt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1113 Jordan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1214 Syria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1215 Lebanon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1316 Iraq . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1417 European Union . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1418 Relations with the United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1519 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1519 Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1619 Peace Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1619 Trade and Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1721 Aid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1822 Security Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1923 Other Current Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2025 Military Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2025 Espionage-Related Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2125 Intellectual Property Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2226 U.S. Interest Groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2227 List of Figures Figure 1. Map of Israel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 28 List of Tables Table 1. Parties in the Knesset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Israel: Background and Relations with the United States Most Recent Developments War and Aftermath Israel engaged in a two-front war against U.S.-designated terrorist groups in response to the June 25, 2006, kidnaping of an Israeli soldier by Hamas and others near near Gaza and the July 12 abduction of two Israeli soldiers from northern Israel by Hezbollah.1 The Israeli public, press, and parliament supported the war in Lebanon as a legitimate response to an attack on sovereign Israeli territory and a long overdue reaction to Hezbollah rocket attacks on northern Israel. During the war, however, the Israeli public and press increasingly questioned its prosecution. Charges levied against the government and military leadership include hesitant decision-making; poor intelligence concerning Hezbollah locations, arms, tactics, and capabilities; deficient training and equipment for mobilized reservists; tactics unsuitable for terrain and enemy; excessive reliance on air power; ill-prepared home front defense; and inadequate presentation of the Israeli view to international audiences, but they questioned its prosecution. Israelis have been debating the war since it was concluded. Critics note that the kidnaped soldiers are still in captivitywere not rescued and that Hezbollah retains its armsis rearming and has been been strengthened politically. The government claims success in forcing Hezbollah from from the border and, in degrading its arms, particularly in destroying its long-range rockets, and in pressuring the Lebanese government, aided by international forces, to assert itself in south Lebanon. Israeli officials took Hezbollah leader Shaykh Hassan Nasrallah’s admission that he would not have authorized the July 12 action if he had known how strongly Israel would react as confirmation that the group had been weakened and that Israel’s deterrence had been strengthened.2 Nonetheless, public opinion polls indicate little support for the government and its main coalition partners, Prime Minister Ehud Olmert’s Kadima Party and Defense Minister Amir Peretz’s Labor Party.3 Meanwhile, support for the rightist 1 For extensive strengthened.2 The fall-out from the war with Hezbollah included the resignation of Chief of Staff Lt. Gen. Dan Halutz on January 17, 2007. Retired Maj. Gen. Gabi Askenazi, Director General of the Defense Ministry and a former infantry commander, was named to succeed Halutz and promoted to lieutenant general. Political Scene Public opinion polls indicate stark lack of support for Prime Minister Ehud Olmert, head of the Kadima Party, and his main coalition partner, Defense Minister 1 For additional coverage of these developments, see CRS Report RL33530, Israeli-Arab Negotiations: Background, Conflicts, and U.S. Policy, by Carol Migdalovitz and CRS Report RL33566, Lebanon: the Israel-Hamas-Hezbollah Conflict, coordinated by Jeremy M. Sharp. 2 Nasrallah’s August 27, 2006, interview with Lebanon television, cited by Joshua Mitnick, “Hezbollah Says Its War with Israel Was a Mistake,” Washington Times, August 28, 2006, among others. 3 See for example, Israeli Poll Shows Likud Leading With 29 Seats; Qadima Down to 16 From 29, Ma’ariv, November 10, 2006, Open Source Center Document GMP20061110 746009. CRS-2 Likud and Yisrael Beiteinu parties and their leaders, Benjamin Netanyahu and Avigdor Lieberman, has increased. However, elections are not imminent because Members of the Knesset are unlikely to vote no confidence in the government because many are likely to lose their seats in an early vote. The incumbents have no plans to resign. Olmert is not challenged as leader of his Kadima Party. Peretz’s hold on Labor’s helm may be more insecure as his internecine foes include prominent personalities and appear to be increasing. They include former Ben Gurion University President Avishay Braverman and former Shin Bet (Israeli counterintelligence and internal security service) head Ami Ayalon, who were high on the Labor list in the last election but failed to get cabinet posts. The next Labor leadership primary is scheduled for May 2007 but may be postponed. In October, Olmert broadened the coalition in order to stabilize it, bringing in CRS-2 Amir Peretz, head of the Labor Party, while support for the rightist Likud and its leader, Benjamin Netanyahu, has increased.3 The incumbents have no plans to resign. Olmert has not yet been challenged as leader of his Kadima Party, although Foreign Minister Tzipi Livni has suggested that she might do so and Ministers Meir Shitrit, Avi Dichter, and Shaul Mofaz are known to want the post.4 Peretz’s hold on Labor’s helm may be more tenuous; his competition includes former Shin Bet (Israeli Counterintelligence and Internal Security Service) head Ami Ayalon, former Prime Minister Ehud Barak, former Minister Ophir Pines-Paz, and former Mossad (Institute for Intelligence and Special Operations) chief Danny Yatom. A Labor leadership primary is scheduled for May 28, 2007. In October 2006, Olmert broadened the coalition in order to stabilize it, bringing in Yisrael Beiteinu and increasing the government’s strength in the Knesset to 78 out of 120 seats. Yisrael Beiteinu leader Avigdor Lieberman became Deputy Prime Minister and Minister for Strategic Threats. Olmert claims to have sought Lieberman because Peretz may be unable to enforce discipline on Labor Knesset members to enable passage of the 2007 budget. Olmert agreed to support Lieberman’s proposal to change the electoral system by providing for the direct election of the prime minister and abolishing the president’s office, with the latter’s powers to be transferred to the prime minister, and increasing the electoral threshold from 2.5% to 4%, among other steps. The fate of the proposal is uncertain. (Labor) Minister of Culture and Sport Ophir Pines-Paz resigned from the government to protest the inclusion of what he labeled a party with “racist characteristics,” i.e., Yisrael Beiteinu. Pines-Paz now intends to run for the Labor leadership. As a result of the war, the government has shelved plans for unilateral disengagement from the West Bank. Many Israelis believe that unilateral disengagements from the south Lebanon and the Gaza Strip had enabled the transformation of those regions into terrorist bases and led to war. Kadima, which won election on a promise of disengagement, may need a new vision. On November 1, Former Jewish Agency Chairman Sallai Meridor was appointed as the next Israeli ambassador to the United States. Historical Overview of Israel4 Minister for Strategic Threats, a previously non-existent post. If Labor withdraws from the government as a result of a leadership change, the coalition would have 59 seats and need to attract one of the smaller parties in order to hold on to power and prevent early elections. Elections still may not be imminent. Members of the Knesset (MKs) might not vote no confidence in the government when many would lose their seats in an early vote. The government could be reconfigured without elections if members of Kadima force the Prime Minister to resign, if Labor withdraws and a smaller party joins the coalition, or if MKs or parties shift their loyalties. Defectors from Kadima can legally join a new coalition only if at least one third of the party’s MKs, or ten, break away. Winograd Commission Amid post-war recriminations, Prime Minister Olmert rejected demands for an independent state commission of inquiry, such as were headed by Supreme Court justices after past controversial conflicts. Eventually, however, he named retired Judge Eliyahu Winograd to head the “Committee for the Examination of the Events of the Lebanon Campaign 2006” to investigate wartime decision-making; he granted the committee authority equal to that of an independent commission. The committee began its work in November 2006. On April 30, 2007, the Winograd Commission presented its interim findings. It criticized Olmert for “severe failure” in exercising “judgement, responsibility, and caution” at the beginning of the war, which it charged he began “hastily” and without a comprehensive plan. It also claimed that the Prime Minister did not take charge of the war, but followed the armed forces’ commanders leadership. The report faulted 3 A March 2007 poll conducted by Israel’s Channel 10 showed Olmert with a popularity rating of 3%, with Peretz at 1%. Some 75% of those surveyed wanted Olmert to resign. Poll cited by Harvey Morris, “Olmert Faces Fall-out From Lebanon Report,” Financial Times, March 14, 2007. 4 Livni interview by Ari Shavit, Ha’aretz, December 29, 2006, Open Source Document GMP20061229746001. CRS-3 Labor Party leader Amir Peretz for accepting the defense portfolio without having the appropriate background and failing to act to compensate for his lack of knowledge. The Commission was most critical of former Chief of Staff Dan Halutz, who has already resigned. He is said to have entered the war “unprepared” and to have failed to inform the cabinet of the (deficient) state of the Israeli Defense Forces (IDF). He also did not provide options to the government, suppressed dissent, and failed to take the Hezbollah missile attack on the north seriously and address its threat. The final Commission report will be submitted in the summer. In early reactions, opposition politicians have called for Olmert to resign, but his associates have indicated that he does not plan to do so in response to the commission’s charges. Historical Overview of Israel5 The quest for a modern Jewish homeland was launched with the publication of Theodore Herzl’s The Jewish State in 1896. The following year, Herzl described his vision at the first Zionist Congress, which encouraged Jewish settlement in Palestine, a land that had been the Biblical home of the Jews and was later part of the Ottoman Empire. In 1917, the British government issued the Balfour Declaration, supporting the “establishment in Palestine (which had become a British mandate after World War I) of a national home for the Jewish people.” Britain also made conflicting 4 For more, see Howard M. Sachar, A History of Israel: From the Rise of Zionism to Our Time, New York, Knopf, 1996. CRS-3 promises to the Arabs concerning the fate of Palestine, which had an overwhelmingly Arab populace. Nonetheless, Jews immigrated to Palestine in ever greater numbers and, following World War II, the plight of Jewish survivors of the Nazi holocaust gave the demand for a Jewish home greater poignancy and urgency. In 1947, the U.N. developed a partition plan to divide Palestine into Jewish and Arab states, with Jerusalem under U.N. administration. The Arab states rejected the plan. On May 14, 1948, the State of Israel proclaimed its independence and was immediately invaded by Arab armies. The conflict ended with armistice agreements between Israel and its neighbors: Egypt, Jordan, Lebanon, and Syria. Israel engaged in armed conflict with some or all of these countries in 1948, 1956, 1967, 1973, and 1982. Since the late 1960s, Israel also has dealt with the threat of Palestinian terrorism. In 1979, Israel concluded a peace treaty with Egypt, thus making another multi-front war unlikely. Israel’s current relations with its neighbors are discussed in “Foreign Policy” below. 5 For more, see Howard M. Sachar, A History of Israel: From the Rise of Zionism to Our Time, New York, Knopf, 1996. CRS-4 Government and Politics Overview Israel is a parliamentary democracy in which the President is head of state and the Prime Minister is head of government. The unicameral parliament (the Knesset) elects a president for a seven-year term. The Prime Minister is the leader of the party with the most seats in parliament. The political spectrum is highly fragmented, with small parties exercising disproportionate power due to the low vote threshold for entry into parliament and the need for their numbers to form coalition governments. In the March 2006, election, the threshold to enter parliament was raised from 1% to 2% — an action intended to bar some smaller parties from parliament but that spurred some parties to join together simply to overcome the threshold. National elections must be held at least every four years, but are often held earlier due to difficulties in holding coalitions together. The average life span of an Israeli government is 22 months. The peace process, the role of religion in the state, and political scandals have caused coalitions to break apart or produced early elections. Israel does not have a constitution. Instead, 11 Basic Laws lay down the rules of government and enumerate fundamental rights; two new Basic Laws are under consideration.56 On February 2, 2006, the Knesset’s Constitution, Law, and Justice Committee approved a draft constitution encompassing existing Basic Laws and a chapter of human rights and basic principles. However, the coalition agreement offor the government that took power in April promised the ultra-orthodox Shas Party that Basic Laws would not be changed (i.e., transformed into a Constitution) without its approval. Israel has an independent judiciary, with a system of magistrates courts and district courts topped by a Supreme Court. There is an active civil society. Some political pressure groups are especially concerned with the peace process, including the Council of Judea, Samaria, and Gaza 5 For Basic Laws, see [http://www.mfa.gov.il/mfa/government/law/basic%20laws/]. CRS-4 (Yesha Council), which represents local settler councils and opposes any withdrawal from occupied Arab territories, and Peace Now, which opposes settlements, the security barrier in the West Bank, and seeks territorial compromise. Both groups have U.S. supporters. Recent Political Developments Israel’s domestic politics have been troubled in recent years. Prime Minister Ariel Sharon’s plan to disengage from the Gaza Strip and four small West Bank settlements split his Likud Party. In November 2005, Histadrut labor federation head Amir Peretz defeated acting party leader Shimon Peres and former Infrastructure Minister Benjamin Ben Eliezer in a Labor Party leadership primary. Peretz emphasized the party’s need to champion socioeconomic goals, which it had subordinated for the sake of joining Sharon’s coalition. On November 20, Labor voted to withdraw from the coalition government, depriving Sharon of his parliamentary majority. parliamentary majority. 6 For Basic Laws, see [http://www.mfa.gov.il/mfa/government/law/basic%20laws/]. CRS-5 On November 21, Sharon said that he was no longer willing to deal with Likud rebels, resigned from the party, and founded a new “centrist” party, Kadima (Forward). He asked President Katzav to dissolve parliament and schedule an early election. Some 18 Likud Members of the Knesset (parliament) (MKs)MKs, including several ministers, the chairman of the Likud Central Committee, several Labor Knesset members, players in other political parties, and prominent personalities joined Kadima. Former Labor leader Peres supported Sharon. Kadima’s platform or Action Plan stated that, in order to secure a Jewish majority in a democratic Jewish State of Israel, part of the Land of Israel (defined by some Israelis asin the area between the Jordan River and the Mediterranean Sea) would have to be ceded. It affirmed a commitment to the Road MapRoadmap, the international framework for achieving a two-state solution to the Israeli-Palestinian conflict. Israel would keep settlement blocs, the security barrier, and a united Jerusalem, while demarcating permanent borders.67 Former Prime Minister and Finance Minister Benjamin Netanyahu won a Likud primary to replace Sharon as leader of Likud on December 19. Netanyahu called for “defensible walls” against Hamas and borders that would include the Jordan Valley, the Golan Heights, an undivided Jerusalem, settlement blocs, and hilltops, and for moving the security barrier eastward. On January 4, 2006, Sharon suffered an incapacitating stroke. In a peaceful transition under the terms of Basic Law Article 16 (b), Deputy Prime Minister Olmert became Acting Prime Minister. On January 16, Olmert became acting chairman of Kadima. The Hamas victory in the January 25 Palestinian parliamentary elections rapidly became an Israeli election issue, even though all parties agreed that Israel should not negotiate with Hamas. On March 8, Olmert revealed plans for further unilateral withdrawals from the West Bank and said that he would reallocate funds from settlements to the Negev, the Galilee, and Jerusalem. Although Olmert declared that 6 For Kadima’s Action Plan, see [http://kadimasharon.co.il/15-en/Kadima.aspx]. CRS-5 he prefers negotiations, if they do not develop in a “reasonable time,” then he would proceed with what he called “convergence,” or merging of settlements east of the security barrier with large settlement blocs that will be west of the barrier.78 Netanyahu charged that the unreciprocated, unilateral withdrawal from Gaza had rewarded terrorists and contributed to the Hamas win. He criticized Olmert’s plan as another unilateral concession that would endanger Israel. Peretz proposed that Israel continue a dialogue with moderate Palestinians, not Hamas. The March 28, 2006, Knesset election results were surprising in many respects. The voter turnout of 63.2% was the lowest ever. The contest was widely viewed as a referendum on Kadima’s plans to disengage from the West Bank, but it also proved to be a vote on economic policies that many believed had harmed the disadvantaged. Kadima came in first, but by a smaller margin than polls had predicted. Labor, emphasizing socioeconomic issues, came in a respectable second. Kadima drained off drew supporters from Likud, which lost 75% of its votes from 2003. Likud’s decline also also 7 8 For Kadima’s Action Plan, see [http://kadimasharon.co.il/15-en/Kadima.aspx]. During his May 2006 meeting with President Bush at the White House, Olmert used “realignment” and not “convergence” as the English translation for his plan. CRS-6 was attributed personally to Netanyahu, whose policies as Finance Minister were blamed for social distress and whose opposition to unilateral disengagement proved to be unpopular with an increasingly pragmatic, non-ideological electorate. The Shas campaign specifically aimed at restoring child allowances for the large families of its constituents. Although it opposes disengagements, the party’s spiritual leader has made rulings in the past that maymight allow Shas to accommodate Kadima’s plans for the territories. Yisrael Beiteinu (Israel Our Home), a secular party appealing to Russian-speakers, wants borders that exclude Israeli Arabs and their land and include settlements; it opposes unilateral disengagement and the Road MapRoadmap. The rightist National Union/National Religious Party (NU/NRP)NU/NRP drew support from settlers; it opposes all withdrawals from the West Bank, where it believes Jews have a biblical right to settle. The new Pensioners’ Party (GIL) drew single-issue voters was supported by voters harmed by Netanyahu’s policies as well as young protest voters. It did not elaborate its positions on other issues. The ultraorthodoxultra-orthodox United Torah Judaism was part of the last Sharon government; it seeks (UTJ) also seeks increased child allowances and military deferments for religious school students from the military and, despite protracted negotiations, has not struck a deal to join the government students. United Arab List, Hadash, and Balad — Israeli Arab parties — are not part of a new government but are expected to passively support any future disengagements. 7 During his May 2006 meeting with President Bush at the White House, Olmert used “realignment” and not “convergence” as the English translation for his plan. CRS-6 Current Government and Politics On May 4, 2006, the Knesset (parliament) approved a new never part of a government. Current Government and Politics Table 1. Parties in the Knesset Seats 29 19 12 12 11 9 Party Orientation Kadima Labor Likud Shas Yisrael Beiteinu (Our Home Israel) Centrist, Pro-disengagement Leftist, Social-democrat Rightist, Anti-disengagement Sephardi Ultra-orthodox Russian-speakers, Nationalist, Secular, Against unilateral withdrawals, but for exchange of populations and territories to create 2 homogenous states Nationalist, Ashkenazi Orthodox, Seeks to annex the West Bank (Land of Israel) and transfer Palestinians to Jordan Single-issue: guaranteed pensions for all; Supports unilateral withdrawal from West Bank Ashkenazi Orthodox, Anti-withdrawals Leftist, Anti-occupation, Civil libertarian Israeli-Arab, Islamist Israeli-Arab, Communist Israeli-Arab 7 National Union (NU)/ National Religious Party (NRP) Pensioners’ (GIL) 6 5 4 3 3 United Torah Judaism (UTJ) Meretz/Yahad United Arab List/Ta’al Hadash Balad On May 4, 2006, the Knesset (parliament) approved a four-party coalition government of Prime Minister Ehud Olmert’s Kadima Party, the Labor Party, the Pensioners’ Party, and the ultra-orthodox Shas Party. It controlled 67 out of 120 seats in the Knesset, with 25 cabinet ministers, and Dalia Itzik of Kadima as the first woman Speaker of the Knesset. The government’s guidelines call for shaping CRS-7 permanent borders for a democratic state with a Jewish majority.8 The government 9 They state that the government will strive to negotiate with the Palestinians, but it will act in the absence of of negotiations. The guidelines also promise to narrow the social gap. Labor wants Olmert to negotiate with Palestinian President Mahmud Abbas before deciding on a unilateral move. Shas joined the coalition without agreeing to evacuate West Bank settlements as specified in the guidelines and will decide on the issue when it is on the government agenda. Table 1. Parties in the Knesset Seats 8 Party Orientation 29 Kadima Centrist, Pro-disengagement 19 Labor Leftist, Social-democrat 12 Likud Rightist, Anti-disengagement 12 Shas Sephardi Ultra-orthodox 11 Yisrael Beiteinu (Our Home Israel) Russian-speakers, Nationalist, Secular, Against unilateral withdrawals, but for exchange of populations and territories to create 2 homogenous states 9 National Union (NU)/ National Religious Party (NRP) Nationalist, Ashkenazi Orthodox, Seeks to annex the West Bank (Land of Israel) and transfer Palestinians to Jordan 7 Pensioners’ (GIL) Single-issue: guaranteed pensions for all; Supports unilateral withdrawal from West Bank 6 United Torah Judaism (UTJ) Ashkenazi Orthodox, Anti-withdrawals 5 Meretz/Yahad Leftist, Anti-occupation, Civil libertarian 4 United Arab List/Ta’al Israeli-Arab, Islamist 3 Hadash Israeli-Arab, Communist 3 Balad Israeli-Arab For the entire text of the government guidelines, see [http://www.mfa.gov.il/MFA/ Government/Current+Government+of+Israel/Basic%20Guidelines%20of%20the%2031s t%20Government%20of%20Israel]. CRS-7 There are currently several unresolved scanKey Cabinet Officers dals involving prominent Ehud Olmert Prime Minister; Minister of Kadima politicians. Justice MinSocial Welfare ister Haim Ramon reTzipi Livni Vice Prime Minister; Kadima signed after being inMinister of Foreign Affairs dicted for indecent asShimon Peres Vice Prime Minister; Negev Kadima sault on a female soldier and Galilee Development and is on trial. The Amir Peretz Deputy Prime Minister; Labor Chairman of the Knesset Minister of Defense Foreign Affairs and DeAvigdor Lieberman Deputy Prime Minister; Yisrael fense Committee, Minister of Strategic Threats Beiteinu Kadima Knesset member Meir Shitrit (Acting) Minister of Justice; Kadima Tsahi Hanegbi, also has Housing been indicted for illegal Avi Dichter Public Security Kadima conduct during his tenShaul Mofaz Deputy Prime Minister; Kadima ure as Environment MinMinister of Transportation* ister from 2001-2003. Roni Bar-On Interior Kadima Then, on October 15, Yuli Tamir Education Labor police recommended that Eli Yishai Deputy Prime Minister; Shas the Attorney General Minister of Industry, Trade, indict President Moshe and Labor Katzav for rape, sexual assault, and fraud. The *Also in charge of strategic dialogue with the United States. Attorney General has not yet made a decision. The President is immune from trial while holding office but could be tried if he resigns or is impeached. Impeachment requires 90 votes in the 120-seat Knesset. Katzav’s lawyer has said that the President will resign if charged. Finally, the State Comptroller has accused Prime Minister Olmert of corruption for appointments of cronies when he was Minister of Industry and turned the case file over to the Attorney General. Other ongoing investigations concern Olmert’s sale of his Jerusalem home significantly above market prices and accusations that, while Finance Minister, he had accepted bribes from U.S. businessmen during the sale of a government-bank controlled bankScandals Key Cabinet Officers A seemingly unEhud Olmert Prime Minister; Acting Kadima ending series of scanFinance Minister dals has created a sense Tzipi Livni Vice Prime Minister; Kadima Minister of Foreign Affairs that the Israeli government is operating under Shimon Peres Vice Prime Minister; Negev Kadima and Galilee Development a cloud of pervasive corruption. On October Amir Peretz Deputy Prime Minister; Labor Minister of Defense 15, 2006, police recommended that the AttorAvigdor Lieberman Deputy Prime Minister; Yisrael Minister of Strategic Threats Beiteinu ney General indict President Moshe Katzav on Daniel Friedmann Minister of Justice nonpartisan charges of rape, sexual Avi Dichter Public Security Kadima harassment, and obstruction of justice and, Shaul Mofaz Deputy Prime Minister; Kadima Minister of Transportation* on January 23, 2007, Attorney General Roni Bar-On Minister of Interior Kadima Menachem Mazuz anYuli Tamir Minister of Education Labor nounced his intention to Eli Yishai Deputy Prime Minister; Shas do so. Prime Minister Minister of Industry, Trade, and Labor Olmert, ministers, and members of the Knesset called on Katzav to re*Also in charge of strategic dialogue with the United States. sign. Instead, the President denied the charges and requested that he be declared temporarily incapacitated for three months or until after presenting his case in a hearing with the Attorney General before charges are filed. The hearing will be held on May 2. Katzav’s leave request was approved on January 25 and has been extended until the end of his seven-year term in July. Speaker of the Knesset Dalia Itzik became Acting President. Katzav, who is immune from trial while holding office, has said that he will resign if indicted. If Katzav resigns, the Knesset will have 45 days to elect a successor. Itzik has declared that she does not intend to run. Olmert is backing Vice Premier Shimon Peres, who lost the 2000 election to Katzav and has not yet declared his candidacy. 9 For the entire text of the government guidelines, see [http://www.mfa.gov.il/MFA/ Government/Current+Government+of+Israel/Basic%20Guidelines%20of%20the%2031s t%20Government%20of%20Israel]. CRS-8 Former Speaker Reuven (Ruby) Rivlin, a Likud MK, and Labor MK Collette Avital have announced their candidacies. Prime Minister Olmert also is functioning under a cloud. The State Comptroller has accused him of making illegal appointments and procuring investment opportunities for an associate while he was Minister of Trade and Industry and has turned the cases over to the Attorney General. The Comptroller also has called for a criminal investigation of Olmert’s role as Finance Minister in trying to steer the sale of a controlling interest in a government-controlled bank toward a close personal associate. Olmert has denied all allegations. On January 31, former (Kadima) Justice Minister Haim Ramon, a close ally of Olmert, was convicted of sexually harassing a female soldier. The verdict triggered changes in the cabinet. Daniel Friedmann, an academic critic of the Supreme Court who favors restricting its power to overturn laws, became Justice Minister. Tourism Minister Yitzhak Herzog of the Labor Party moved to the Social Affairs Ministry with concurrent responsibility for diaspora affairs and the fight against anti-Semitism. Yisrael Beiteinu’s Yitzhak Aharonovich took over Tourism and that party assumed chairmanship of the Knesset Finance Committee. On March 29, the court upheld Ramon’s conviction for indecent assault, but found him not guilty of moral turpitude, opening the way for him to resume a political career. Finally, police are investigating Finance Minister Abraham Hirchson on suspicion of embezzling funds from a nonprofit organization in order to finance political activity for the Likud Party, to which he had belonged prior to joining Kadima. On April 22, Hirchson stepped down for three months or until the investigation is completed. Olmert is serving as Acting Finance Minister, but the Attorney General has called on the Prime Minister to appoint a new finance minister soon because of potential conflicts of interest that may arise from the investigations of his role in the bank privatization noted above. Olmert is expected to appoint a new finance minister shortly. Economy Overview Israel has an advanced industrial, market economy in which the government plays a substantial role. Most people enjoy a middle class standard of living. Per capita income is on par with some European Union members. Despite limited natural resources, the agricultural and industrial sectors are well developed. An advanced high -tech sector includes aviation, communications, computer-aided design and manufactures, medical electronics, and fiber optics. Israel greatly depends on foreign aid and loans and contributions from the Jewish diaspora. After economic declines CRS-8 in 2001 and 2002 due to the effects of the Palestinian intifadah (uprising) on tourism and to the bursting of the global high-tech bubble, Israel’s economy has recovered. For 2006recovered. Before the 2006 war in Lebanon, most economic indicators were positive: inflation low, employment and wages rising, and the standard of living rising. CRS-9 Basic Facts Population 7,150,000 (2007 est.) Population Growth Rate 1.18% (2006 est.) Ethnic Groups — Jewish 80% (2007 est.) — non-Jewish (mostly Arab) 20% (2007 est.)* GDP Growth Rate 5% (2006 est.) GDP Per Capita $26,200 (2006 est.) Inflation Rate 1.9% (2006 est.) Unemployment Rate 8.5% (2006 est.) Ratio of debt to GDP 91% (2006 est.) Foreign Debt $81.98 billion (June 2006 est.) Imports crude oil, grains, raw materials, military equipment Exports cut diamonds, high-technology equipment, fruits and vegetables Main Trading Partners United States, Belgium, Germany, United Kingdom Sources: CIA, The World Factbook, January 2007; and the Israeli government. *Within 1967 borders. Under Former Finance Minister Netanyahu, the government attempted to liberalize the economy by controlling government spending, reducing taxes, and resuming privatization of state enterprises. The chronic budget deficit decreased, while the country’s international credit rating was raised, enabling a drop in interest rates. However, Netanyahu’s critics suggested that cuts in social spending widened the national income gap and increased the underclass. According to Israel’s National Insurance Institute, 20% of all Israelis and 30% of Israeli children live below the poverty line. Israel has a budget deficit target of 3% of gross domestic product, and the government is allowed by law to raise the annual budget by only 1.7%. Olmert vowed not to increase the deficit while lessening the social gap. The coalition agreement calls for raising the minimum wage to $1,000 a month by the end of the Knesset session, canceling a 1.5% pension cut of the Netanyahu era, guaranteeing a pension for all workers, and increasing spending on heath care, child allowances, daycare, and other socioeconomic programs. Current Issues Basic Facts The 2006 budget was not approved before the dissolution of the last parliament; therefore therefore spending remained at 2005 levels from January through May and a budget surplus surplus accrued due to the low expenditures and higher than expected tax revenues. The The surplus was expected to enable the new government to spend more on social programs. Finance Minister Hirschson proposed a budget cut of 1 one billion New Israeli Shekels (NIS) (U.S.$224 million) for 2006, of which NIS 510 million (U.S.$114 million) was to be taken from defense and none from social programs. The Knesset passed the budget on June 7, 2006, by a vote of 53 to 22, with 45 abstentions. Some Labor Knesset members objected to cuts in bread subsidies, failure to address the Population Population Growth Rate Ethnic Groups GDP Growth Rate GDP Per Capita Inflation Rate Unemployment Rate Ratio of debt to GDP Foreign Debt Imports Exports Main Trading Partners 6,276,883 (2005.) 1.2% (2005 est.) — Jewish 80.1% (1996) — non-Jewish (mostly Arab) 19.9% (1996)* 5.2 (2005 est.) $22,200 (2005 est.) 1.3% (2005 est.) 8.9% (2005 est.) 101% (2005 est.) $74.46 billion (2004 est.) crude oil, grains, raw materials, military equipment cut diamonds, high-technology equipment, fruits and vegetables United States, Belgium, Germany, United Kingdom Sources: CIA, The World Factbook, January 2006; and the Israeli government. *Within 1967 borders. CRS-9 pension issue, and defense cuts, but voted for the budget to sustain the coalition. Likud, Meretz, and the Arab parties voted against the bill. UTJ, Israeli Beiteinu, and NU-NRP abstained after the government pledged to support organizations they champion. In the end, the defense budget was not cut due to military expenditures for the war in Lebanon. On August 31, the Knesset Finance Committee passed a 6% acrossthe-board cut (totaling about $450 million) for all ministries, except defense and social welfare. Finance Minister Hirchson estimates the cost of the war to be about $3.5 billion, and the Israeli Bureau of Statistics projects a 4.5% GDP growth rate for 2006 (compared to 5.2% in 2005) due economic losses resulting from the closure of industrial plants in northern Israel, inability to work on agriculture in that region, attendant business, property, and tax losses, and the loss of tourism revenues. On September 12, the cabinet approved the 2007 budget. Only Shas voted against it. Labor Leader Peretz abstained over a minimum wage issue, but other Labor ministers disagreed with his assessment and voted for the budget June 7, 2006. CRS-10 In the end, the defense budget was not cut due to military expenditures for the war in Lebanon. On August 31, the Knesset Finance Committee passed a 6% acrossthe-board cut (totaling about $450 million) for all ministries, except defense and social welfare. Hirchson estimated the cost of the war to be about $3.5 billion due economic losses resulting from the closure of industrial plants in northern Israel, inability to work on agriculture in that region, attendant business, property, and tax losses, and the loss of tourism revenues. In the first half of 2006, the economy grew at a 5.9% rate; second half growth fell to 2.9%. At the year’s end, government economists were very pleased with the economy’s performance, which resulted in a balance of payments surplus of $3.9 billion and a cut in the government deficit to 1.2%, half of the previous year.10 On September 12, the cabinet approved the 2007 budget. On January 29, 2007, Hirschson presented plans to decrease poverty and correct the mal-distribution of wealth in the country during the period from 2007 to 2010. They include mandatory pensions, increased taxes on employee vehicles, negative income tax for low-income earners, and lower-middle-class income taxes. Prime Minister Olmert followed suit on April 18, by issuing a socioeconomic agenda for 2008-2010 to reduce poverty and encourage growth and employment. Foreign Policy Middle East Iran. Israeli officials state that Iran will pose an existential threat to Israel if it achieves nuclear capability. Ayatollah Khomeini, founder of Iran’s Islamic revolution, decreed that the elimination of Israel is a religious duty. President Mahmud Ahmadinejad quoted Khomeini when he called for Israel to be “wiped off the map,” ” and has described the Holocaust as a “myth” used as a pretext to create an “artificial Zionist regime,” and suggested that Europe, the United States, or Canada donate land for a Jewish state. .” He repeatedly makes virulently anti-Israel statements. The Iranian Shahab-3 missile is capable of delivering a warhead to Israel. Israeli officials have called on the international community to thwart Iran’s nuclear ambitions in order to avert the need for Israel to act as it did against Iraq’s reactor at Osirak in 1981. When U.S. Vice President Dick Cheney warned in early 2005 that Israel might act act pre-emptively against Iran, Israel’s then Defense Minister Shaul Mofaz countered, urging a pre-emptive U.S. strike. Because Israel is presumed to have nuclear weapons, U.S. pre-emptive strike. Israel has nuclear weapons, and the prospect of a counterattack is seen by many as a deterrent against an Iranian attack. On January 17, 2006, then Acting Prime Minister Olmert said, “Under no circumstances ... will Israel permit anyone who harbors evil intentions against us to possess destructive weapons that can threaten our existence.” He added, “Israel acted, and will continue to act, in cooperation and consultation with ... international elements.”9 On April 23, 10 Sharon Wrobel, “2006 GDP Growth Tops Forecasts,” Jerusalem Post, January 1, 2007, citing the Israeli Central Bureau of Statistics’ preliminary figures. CRS-11 international elements.”11 On April 23, he told the cabinet, “our position has always been that it would not be correct to focus on us as the spearhead of the global struggle as if it were our local, individual problem and not a problem for the entire international community. The international 9 “PM Olmert, President Qatzav Discuss Iran, Peace Process During News Conference,” Open Source Center Document FEA20060117017385, January 17, 2006. CRS-10 struggle must be led and managed by — first and foremost — the USU.S., Europe, and the UNU.N. institutions. We are not ignoring our need to take ... steps in order to be prepared for any eventuality.”10 On May 23, 2006, Israeli Chief of Staff Dan Halutz said that, according to 12 On November 13, Olmert told the U.S. “Today Show” that he would find acceptable any compromise that President Bush does to stop Iran from acquiring nuclear capabilities. Israeli estimates of when Iran might have a nuclear weapon differ from those of the United States. On May 23, 2006, then Chief of Staff Dan Halutz said that, according to intelligence estimates, Iran would be in possession of nuclear weapons by 20082010. He also noted that U.S. assessments predicted that Iran would not develop the bomb before 2010-2015, but that Israel must prepare for the possibility of a more imminent threat.11 On November 13, Prime Minister Olmert told the U.S. “Today Show” that he would find acceptable any compromise that President Bush does to stop Iran from acquiring nuclear capabilities by 2008-2010 and noted that U.S. assessments predicted a 2010-2015 time frame. He asserted, however, that Israel must prepare for a possibly more imminent threat.13 On December 17, Mossad (Institute for Intelligence and Special Operations) Chief Meir Dagan told a Knesset committee that if there were no sanctions on Iran and no technological delays, then Iran would have 25 kilograms of enriched uranium by 2008 and nuclear warheads by 2009-2010.14 In January 2007, Maj. Gen. Amos Yadlin, head of military intelligence, also said that, barring delays, Iran would have a nuclear bomb in two and a half years. If it could reduce the time needed to procure fissile material, Iran might even have one before mid-2009.15 Israeli officials have called for strengthening and expanding international sanctions against Iran. Iran also provides financial, political, and/or military support to the Lebanese Hezbollah as well as to Hamas, Palestinian Islamic Jihad (PIJ), the Al Aqsa Martyrs’ Brigades, and the Popular Front for the Liberation of Palestine-General Command — Palestinian terrorist groups seeking to obstruct the peace process and destroy Israel. In January 2006, then Defense Minister Mofaz charged that Iran had financed a PIJ suicide bombing in Tel Aviv and Israeli officials blamed Iran for Hezbollah’s attack on northern Israel in July 2006. . Israeli officials blamed Iran for Hezbollah’s attack on northern Israel in July 2006. Prime Minister Olmert has called upon moderate Sunni leaders to form a coalition against Iran, Hezbollah, and other regional extremists. At least publicly, those leaders seek a settlement of the Israeli-Palestinian conflict as a precondition for dealings with Israel. Nonetheless, it has been widely reported, but not officially confirmed, that Olmert met Saudi National Security Advisor Prince Bandar in September 2006, and commentators have opined that Iran was on their agenda. 11 “PM Olmert, President Qatzav Discuss Iran, Peace Process During News Conference,” Open Source Center Document FEA20060117017385, January 17, 2006. 12 “23 Apr Cabinet Session; Daily Says Olmert Readying for ‘Swift’ Convergence,” Open Source Center, Document GMP20060424621005, Jerusalem Government Press Office, April 23, 2006. 13 Ha’aretz report, May 24, 2006. 14 Sheera Claire Frenkel, “Dagan: Syria more Willing Now than Ever to Attack Israel,” Jerusalem Post, December 18, 2006. 15 “Israeli MI Chief: Iran to have Bomb in 2.5 Years,” Voice of Israel, January 9, 2007, Open Source Center, Document GMP20070109739002. CRS-12 On January 24, 2007, Olmert declared that the Iranian threat preoccupies him “incessantly,” but stated his continuing preference for a diplomatic solution and observed that Iran is “very vulnerable” to international pressure. He added, “Although the Iranian threat is grave, Israel does not face an imminent danger of a nuclear attack” and said that there is still time to frustrate Iran’s intentions to become a nuclear power.16 Israel welcomed U.N. Security Council Resolution 1747, March 24, 2007, which imposed additional sanctions in Iran due to its failure to halt uranium enrichment. On April 22, Olmert said that he believed that international diplomatic pressure will keep Teheran from attaining nuclear weapons and that a military confrontation will not be necessary. U.S. Secretary of Defense Robert Gates told Minister of Defense Peretz on April 19 that diplomatic pressure on Iran was working. Peretz, while agreeing that diplomacy is preferable, noted that Israel could not remove other options from the table. The Minister also declared that Israel expected the United States and the world to stand by it regarding the Iran nuclear issue. Palestinian Authority. During the Oslo peace process of the 1990’s, Israelis and Palestinians negotiated a series of agreements that resulted in the creation of a Palestinian Authority (PA) with territorial control over parts of the West Bank and the Gaza Strip. Israel refused to deal with the late Palestinian leader Yasir Arafat after Sharon came to power and during the intifadah or Palestinian uprising against Israeli occupation. Israel’s relations with the PA and its leaders improved somewhat after Arafat’s death in November 2004 and the election of Mahmud Abbas as President of the PA in January 2005. Sharon and Abbas met at a summit in Sharm al- Shaykh, Egypt, in February, and promised to end violence and to take other measures. Israel made some goodwill gestures toward the PA, and President Abbas and 13 Palestinian factions agreed to an informal truce. However, Sharon and Abbas did not meet for a long time after June 2005. Although Israeli officials described the disengagement disengagement from the Gaza Strip as unilateral, they met with Palestinian counterparts to coordinate security and disposition of assetsfor the disengagement and disposition of Israeli assets in Gaza. Israel still has at least 242 settlements, other civilian land use sites, and 124 unauthorized settlement outposts in the West Bank and 29 settlements in East Jerusalem — all areas that the Palestinians view as part of their future state. Israel retains military control over the West Bank and is building a security barrier on West Bank territory to separate Israelis and Palestinians and prevent terrorists from entering Israel. Palestinians object to the barrier being built on their territory. The barrier is taking the form of a future border between Israel and Palestine and will cut Palestinians off from East Jerusalem. 10 “23 Apr Cabinet Session; Daily Says Olmert Readying for ‘Swift’ Convergence,” Open Source Center, Document GMP20060424621005, Jerusalem Government Press Office, April 23, 2006. 11 Ha’aretz report, May 24, 2006. CRS-11 and, in some places, from each other and some of their land. The Israeli government accepted the Roadmap, the framework for a peace process leading to a two-state solution developed by the United States, European Union, U.N., and Russia, reluctantly and with many conditions. Sharon contended 16 Verbatim text of speech to the Herziliyya Conference, reported by IDF Radio, BBC Monitoring Middle East, January 25, 2007. CRS-13 that the Roadmap requires that the PA first fight terror, by which he meant disarm militants and dismantle their infrastructure. (It also required Israel to cease settlement activity in the first phase.) Abbas preferred to include terrorist groups groups such as Hamas in the political system and refused to disarm them prior to January January 2006 parliamentary elections. Hamas’s victory in those elections created policy policy dilemmas for IsraelAbbas, Israel, and the international community. Israel demanded that Hamas abrogate its Covenant that calls for the destruction of Israel, recognize Israel, disarm and disavow terrorism, and accept all prior agreements with Israel as preconditions for relations with a Hamas-led PA. Israel officially refuses to negotiate with Hamas for the return of the Israeli soldier kidnaped from a post at Kerem Shalom, Israel, near the Gaza Strip on June on June 25, 2006. SinceAfter the kidnaping, Israel has in summer 2006, Israel arrested many members of the Hamas-led PA government and legislature for participating in a terrorist group, and Israeli forces have been conducting conducted military operations against Hamas and other militant groups in the Gaza Strip as well as in the West Bank. Egyptian officials are attempting to mediate a resolution that would involve mediate a prisoner exchange. Analysts believe that this effort may beis complicated by the need to have a deal acceptable to Hamas political for the approval of Hamas political bureau head Khalid Mish’al, who is based in Damascus and subject to influence by the Syrian and Iranian governments. Egypt. the Syrian and Iranian governments. On March 18, 2007, the Israeli cabinet voted to shun the new Palestinian unity government, a coalition consisting of Hamas, Fatah, and independents, until it meets international demands to disavow violence, recognize Israel, and accept prior IsraeliPalestinian agreements. Prime Minister Olmert said that he would continue to meet with President Abbas to discuss humanitarian and security issues. Other members of the Israeli government have different view of the situation. Defense Minister Peretz called for negotiating a permanent agreement with Abbas, while Minister for Strategic Threats Lieberman called for boycotting Abbas as well as the Palestinian government. The Israeli government has shelved plans for unilateral disengagement from the West Bank. Many Israelis believe that unilateral disengagements from the south Lebanon and the Gaza Strip had enabled the transformation of those regions into terrorist bases for Hezbollah and Hamas and led to war. Egypt.17 After fighting four wars in as many decades, Israel and Egypt signed a peace treaty in 1979. In 1982, Israel withdrew from the Sinai Peninsula, which it had taken in the 1967 war. Egypt and Israel established diplomatic relations, although Egypt withdrew its ambassador during the four years of the second intifadah, 2001-2005, because it objected to Israel’s “excessive” use of force against the Palestinians. Some Israelis refer to their ties with Egypt as a “cold peace” because full normalization of relations, such as enhanced trade, bilateral tourism, and educational exchanges, has not materialized. Egyptian President Hosni Mubarak has visited Israel only once — for the funeral of former Israeli Prime Minister Yitzhak Rabin. Outreach is often one way, from Israel to Egypt. Egyptians say that they are reluctant to engage because of Israel’s continuing occupation of Arab lands. Israelis 17 See also, CRS Report RL33003, Egypt: Background and U.S. Relations, by Jeremy M. Sharp. CRS-14 are upset by some Egyptian media and religious figures’ anti-Israeli and occasionally anti-Semitic rhetoric. Nonetheless, the Egyptian government often plays a constructive role in the Arab-Israeli peace process, hosting meetings and acting as a liaison. In March 2005, it helped secure an informal Palestinian truce and later helped prevent it from breaking down due to violence between Palestinian factions and Israel and between Palestinian security forces and factions. As noted above, Egyptians have been trying to secure the release of a kidnaped Israeli soldier being held by Hamas militants. Since the January 2006 Hamas election victoryAfter the January 2006 Hamas election victory in the Palestinian territories, Egyptian officials have unsuccessfully urged the group to accept athe 2002 Arab League declarationPeace Initiative that offers Israel recognition within its 1967 borders. On June 4, President Mubarak and Prime Minister Olmert had a very cordial meeting. Mubarak praised Olmert as a man of “vision and credibility,” while Olmert reciprocated with compliments and pledged to work closely with Mubarak to advance the peace process. CRS-12 its 1967 borders. Egyptian intelligence chief Omar Sulayman has tried to gain the release of an Israeli soldier kidnaped by Hamas and others in June 2006 in exchange for Palestinian prisoners. Egypt supports President Mahmud Abbas generally in order to ensure that there is a Palestinian partner for peace negotiations with Israel and is training the Palestinian Presidential Guard. Egypt deployed 750 border guards to secure the Gaza-Egyptian border (Rafah) after Israel’s disengagement from Gaza. After one year, the two sides will jointly evaluate the mission. Israel refused an Egyptian request to deploy military border guards, instead of police, for greater control of smuggling along the entire border in Sinai, which some Israelis argue would require a change in the military appendix of the 1979 peace treaty. In fall 2006, Israeli officials repeatedly Israeli officials have repeatedly expressed frustration with Egyptian with Egypt’s failure to control arms-smuggling into Gaza. However, in November 2006, Prime Minister Olmert said that Israel wanted to make the border agreement more effective and not to change it. In December 2004, Egypt and Israel signed a Qualified Industrial Zone (QIZ) Agreement under which jointly produced goods enter the U.S. market duty free as part of the U.S.-Israeli Free Trade Agreement (FTA). As a result of the QIZ, Israeli exports to Egypt grew 110% in 2005have grown. On June 30, 2005, Israel signed a memorandum of understanding to buy 1.7 billion cubic feet of Egyptian natural gas for an estimated U.S.$2.5 billion over 15 years, fulfilling a commitment made in an addendum to the 1979 peace treaty. The deal includes cooperation in construction of the infrastructure needed and may expand to other energy areas. Gas is not expected to flow before 2007.12 Jordan.An initial agreement for the deal was signed on December 11, 2006. In April 2007, Israel’s National Planning and Building Council approved a plan for a gas pipeline; work on the Israeli section is expected to be completed by the end of 2007. Jordan.18 Israel and Jordan signed a peace treaty in October 1994 and exchanged ambassadors, although Jordan did not have an ambassador in Israel during most of the intifadah. Relations have developed with trade, cultural exchanges, and water-sharing agreements. Since 1997, Jordan and Israel have collaborated in creating 13 qualified industrial zones (QIZs) to export jointly produced goods to the United States duty-free under the U.S.-Israel Free Trade Agreement (FTA), although Jordanian companies are now said to prefer arrangements under the U.S.-Jordan FTA 18 See also CRS Report RL33546, Jordan: U.S. Relations and Bilateral Issues, by Alfred Prados and Jeremy M. Sharp; and CRS Report RS22002, Qualifying Industrial Zones in Jordan: A Model for Promoting Peace and Development in the Middle East? by Mary Jane Bolle, et al. CRS-15 over the QIZ. Normalization of ties is not popular with the Jordanian people, over half of whom are of Palestinian origin, although King Abdullah II has attempted to control media and organizations opposed to normalization. Believing that a two-state solution to the Israeli-Palestinian conflict would contribute to regional stability, the King is very supportive of the peace process, wants the Roadmap to be implemented, and has hosted meetings between Israeli and Palestinian leaders.13 He opposes unilateral Israeli steps in In January 2007, Jordan joined Egypt, Saudi Arabia, and Palestinian President Abbas in advocating an agreement on the “end game” before following the Roadmap. The King has opposed to possible unilateral Israeli steps in the West Bank, fearing that they would strengthen Palestinian radicals who could destabilize the region and undermine his regime. Abdullah met Olmert in Jordan on June 8, 2006 He is one of the strongest proponents of the Arab Peace Initiative, offering Israel relations with Arab countries in exchange for its full withdrawal from occupied territories and a solution to the Palestinian refugee issue, which the Arab League reaffirmed in March 2007. Syria. Israel and Syria have fought several wars but, except for rare breaches, have maintained a military truce along their border for many years. Yet, they failed to reach a peace agreement in negotiations that ended in 2000. Since 1967, Israel has occupied Syria’s Golan Heights and, in December 1981, effectively annexed it by applying Israeli law there. There are 42 Israeli settlements on the Golan. Syrian President Bashar al- Asad has said that he wants to hold peace talks with Israel, but Israeli officials demand that he first cease supporting the Lebanese Hezbollah militia, which attacks Israeli forces in the disputed Shib’a Farms area of Lebanon and 12 13 See also CRS Report RL33003, Egypt: Background and U.S. Relations, by Jeremy Sharp. See also CRS Report RL33546, Jordan: U.S. Relations and Bilateral Issues, by Alfred Prados and Jeremy M. Sharp; and CRS Report RS22002, Qualifying Industrial Zones in Jordan: A Model for Promoting Peace and Development in the Middle East? by Mary Jane Bolle, et al. CRS-13 communities in northern Israel and aids Palestinian terrorist groups. They also want Asad to expel Palestinian rejectionist groups (i.e., those who do not agree with the Israeli-Palestinianreject an IsraeliPalestinian peace process). Sharon said that the Golan is essential for Israel’s security and discussion of withdrawal would be a mistake.1419 After Syria was implicated in the February 2005 assassination of former Lebanese Prime Minister Rafiq Hariri, international pressure on the Asad regime mounted. Israeli officials have said that Israel iswas not interested in the fall of the regime, only in changing its policies. Some reportedly fear that anarchy or extreme Islamist Islamist elements might follow Asad and prefer him to stay in power in a weakened state. On December 1, 2005, Sharon said that nothing should be done to ease U.S. and French pressure on Syria, implying that Syrian-Israeli peace talks would do that. His successor, Olmert has indicated that talks with Syria are not on his agenda and has blamed Damascus for Palestinian terror attacks in Israel. Syria hosts Hamas political bureau chief Khalid Mish’al and supplies Hezbollah with Syrian and Iranian weapons. After the June 25, 2006, Palestinian attack on Israeli forces and kidnaping of an Israeli soldier, Israeli officials specifically requested the United States to exert pressure on President Asad to induce him to expel Mish’al, whom they believed was responsible for the operation. AfterWhen Hezbollah abducted two Israeli soldiers from northern Israel on July 12, sparking a major Israeli military campaign against Hezbollah in Lebanonan Israeli-Hezbollah war, some rightwing Israeli politicians demanded that it be expanded to include Syria. However, the government and military did want to open a third front. U.S. officials demanded that Syria exert its influence on Hezbollah to end the conflict, but 19 See also CRS Report RL33487, Syria: U.S. Relations and Bilateral Issues, by Alfred Prados. CRS-16 end the conflict; Syrian officials unsuccessfully sought a broader resolution that would include a revival of a peace process to produce the return of the Golan Heights. Lebanon.15 Heights. After the war in September 2006, however, Israeli Prime Minister Olmert, declared, “As long as I am prime minister, the Golan Heights will remain in our hands because it is an integral part of the State of Israel.”20 He also has indicated that he prefers not to differ with the Bush Administration’s policy of not dealing with Syria due to its support for terrorists, destabilizing of Lebanon, and failure to control infiltration into Iraq. Lebanon.21 Israeli forces invaded Lebanon in 1982 to prevent Palestinian attacks on northern Israel. The forces gradually withdrew to a self-declared ninemile nine-mile “security zone,” north of the Israeli border. Peace talks in the 1990’s failed to produce a peace treaty, mainly because of Syria’s insistence that it reach an accord with Israel first. Israel unilaterally withdrew from southern Lebanon on May 25, 2000. Lebanon insists that the Israeli withdrawal is incomplete because of the continuing presence of Israeli forces in the Shib’a Farms area, in the region where Lebanon, Syria, and Israel meet. The U.N. saiddetermined, however, that Israel’s withdrawal from Lebanon was complete and treats the Shib’a Farms as part of Syria’s Golan Heights occupied by Israel. Syria verbally recognizes that Shib’a is part of Lebanon, but will not demarcate the border officially as long the Israeli occupation continues. Hezbollah took control of the former “security zone” after Israeli forces left and attacked Israeli forces in Shib’a and northern Israeli communities. The Lebanese government considers Hezbollah to be a legitimate resistance group and a political party represented in parliament. Israel views it as a terrorist group. 14 See also CRS Report RL33487, Syria: U.S. Relations and Bilateral Issues, by Alfred Prados. 15 See also CRS Report RL33509, Lebanon; and CRS Report RL31078, The Shib’a Farms Dispute and Its Implications, both by Alfred Prados. CRS-14 terrorist group. Hezbollah’s kidnaping of two Israeli soldiers on July 12, 2006, provoked Israel to launch a major military campaignwar against Hezbollah in Lebanon. In a July 17 speech to the KnessetOn July 17, Prime Minister Olmert said declared that military operations would end with the return of the kidnaped soldiers, the end to Hezbollah rocket attacks into northern Israel, and the deployment of the Lebanese army along the Israeli-Lebanese border to replace Hezbollah units. Hezbollah demandsdemanded a prisoner swap, i.e.namely, that the Israeli soldiers be exchanged for Lebanese and other Arab prisoners in Israel. The war ended with a cessation of hostilities on August 14. Israeli forces withdrew as their positions were assumed by the Lebanese army and an enlarged U.N. Interim Forces in Lebanon (UNIFIL). Hezbollah has maintained the cease-fire, but it also has not released the abducted soldiers. U.N. Secretary General Kofi Annan has appointed a “secret” mediator to facilitate a prisoner exchange. Other. Aside from Egypt and Jordan, Israel has diplomatic relations with the majority-Muslim governments of Mauritania and Turkey and has had interest or trade offices in Morocco, Tunisia, Oman, and Qatar. The latter four suspended relations with Israel during the intifadah. Former Foreign Minister Silvan Shalom had has not released the abducted soldiers.22 Iraq. In a March 12, 2007, speech, Prime Minister Olmert warned against the consequences of a “premature” U.S. withdrawal from Iraq, arguing that a negative 20 “Olmert Tells Israeli Paper: Golan ‘An Integral Part of the State of Israel’,” Yedi’ot Aharonot, September 26, 2006, citing a Mishpaha newspaper interview, Open Source Center Document GMP20060926746002. 21 See also CRS Report RL33509, Lebanon; and CRS Report RL31078, The Shib’a Farms Dispute and Its Implications, both by Alfred Prados. 22 Some have suggested that the soldiers might not be alive due to the nature of the operation in which the soldiers were captured, the probable injuries they sustained, and the lack of readily available medical assistance. Moreover, there has been no discussion of a prisoner exchange comparable to that under discussion for the soldier kidnaped by Hamas earlier. CRS-17 outcome there would harm Israel, the Gulf States, and the stability of the Middle East as well as the ability of the United States to address threats emerging from Iran.23 Israel’s Ambassador to the United States has expressed hope that withdrawal from Iraq would be done “in such a way that does not strengthen Iran and Al Qaeda or boost organizations such as Hezbollah and Hamas, so that we don’t face a new eastern front from Iran to Kfar Saba.”24 Israeli commentator Ze’ev Schiff has suggested that if Arabs interpret America’s withdrawal as a sign of defeat, then Israel could look forward to a radical Arab shift that will strengthen the extremists around us.25 Others have opined that Israel fears that a U.S. withdrawal would be seen as a victory for Iran and could prompt Syria to consider military options to recover the Golan Heights.26 Some of these sentiments may have influenced H.Rept. 110-060, March 20, 2007, to accompany H.R. 1591, Emergency Supplemental Appropriations for FY2007, which states, “The fight is Iraq is also critical to the future of Israel. A failure in Iraq will further destabilize the region, posing a direct threat to Israel. We must not let that occur to our friend and ally.” Other. Aside from Egypt and Jordan, Israel has diplomatic relations with the majority-Muslim countries of Mauritania and Turkey and has had interest or trade offices in Morocco, Tunisia, Oman, and Qatar. The latter four suspended relations with Israel during the Palestinian intifadah. Former Foreign Minister Silvan Shalom had predicted that relations with Arab and Muslim countries would improve due to Israel’s disengagement from Gaza. The first diplomatic breakthrough was his September 1, 2005, meeting in Istanbul with the Pakistani foreign minister, although Pakistani officials have asserted that they wouldwill not recognize Israel until an independent independent Palestinian state is established. On September 14, Pakistan’s President Pervez Pervez Musharraf shook Prime Minister Sharon’s hand in a “chance” meeting at the U.N. General Assembly opening session in New York. In October, Pakistan agreed to accept Israeli accepted Israeli humanitarian aid after a devastating earthquake. Shalom also met the Indonesian, Qatari, Algerian, Moroccan, and Tunisian foreign ministers at the U.N. In September 2006, Foreign Minister Livni was said to have similar meetings with 10 Arab and Muslim foreign ministers, including the Omani foreign minister. Also in September 2005, Bahrain ended its economic boycott of Israel, a move required by the World Trade Organization and the Bahrain-U.S. Free Trade Agreement, but it has vowed not to normalize relations. Tunisian President Zine El Abidine Ben Ali sent a personal letter to Sharon, praising his “courageous” withdrawal from Gaza. Shalom attended the World Summit on the Information Society in Tunisia in NovemberIn April 2007, Musharraf offered to mediate between Israel and the Palestinians and said that he would be willing to visit Israel to help bring peace to the Middle East. Prime Minister Olmert declined the mediation offer, preferring to deal directly with Palestinian President Abbas. Shalom also met the Indonesian, Qatari, Algerian, Moroccan, and Tunisian foreign ministers at the U.N. Also in September 2005, Bahrain ended its economic boycott of Israel, a move required by the World Trade Organization and the BahrainU.S. Free Trade Agreement, but it has vowed not to normalize relations. Tunisian President Zine El Abidine Ben Ali sent a personal letter to Sharon, praising his “courageous” withdrawal from Gaza. Shalom attended the World 23 For text of speech, see [http://www.pmo.gov.il/PMOEng/Communication/PMSpeaks/ speechaipac130307.htm]. 24 Interview by Tal Schneider, Ma’ariv, April 27, 2007, Open Source Center Document GMP20070427754006. 25 Ze’ev Schiff, “US Withdrawal in Iraq to Strengthen Arab Extremists Around Israel,” Ha’aretz, April 20, 2007. 26 Hussein Agha, “The Last Thing the Middle East’s Main Players Want is US Troops to Leave Iraq...,” The Guardian, April 25, 2007. CRS-18 Summit on the Information Society in November 2005 and Knesset members attended the European-Mediterranean Parliamentary Assembly in March 2007; both events were held in Tunis. In September 2006, Foreign Minister Livni was said to have met at the U.N. with 10 Arab and Muslim foreign ministers, including the Omani foreign minister. On January 30, 2007, Vice Premier Shimon Peres met the Emir of Qatar in Doha. Speaker Itzik was invited to the Inter-Parliamentary Union meeting of parliamentary leaders in Indonesia in May 2007 but decided not to attend because of security required due to her position as Acting President. Israel also has developed good relations with the predominantly Muslim former Soviet republic of Azerbaijan, which supplies about one-sixth of Israel’s oil needs. European Union Israel has complex relations with the European Union (EU). Many Europeans believe that the Israeli-Palestinian conflict is a root cause of terrorism and Islamist extremism among their own Muslim populations and want it addressed urgently. The EU has ambitions to exert greater influence in the Middle East peace process. The EU is a member of the “Quartet,” with the United States, U.N., and Russia, which developed the Roadmap. EU officials appeared to share Palestinian suspicions that Sharon’s disengagement plan meant “Gaza first, Gaza only” and would not lead to the Roadmap process. They observed with concern Israel’s ongoing settlement CRS-15 activity and construction of the security barrier in the West Bank, which, according to the Europeans, contravene the Roadmap and prejudge negotiations on borders. Israel has been cool to EU overtures because it views many Europeans as biased in favor of the Palestinians and hears some Europeans increasingly question the legitimacy of the State of Israel. Some Israelis contend that the basis of such views is an underlying European anti-Semitism. Nonetheless, in November 2005, Israel agreed to allow the EU to maintain a Border Assistance Mission (EU-BAM) to monitor the reopened Rafah crossing between the Gaza Strip and Egypt. In November 2006, the 90-man EU mission was extended for another six months despite European complaints about Israeli restrictions and frequent closures of the crossing. After the war in Lebanon, Israel also urged and welcomed the strong participation of European countries in the U.N. peacekeeping force there. To Israel’s dismay, some EU representatives met local Hamas leaders elected in December 2004 in order to oversee EU-funded local projects. The EU also authorized its monitoring mission for the January 2006 Palestinian parliamentary elections to contact the full range of candidates, including Hamas, in order to carry out its task. EU officials have said, however, that Hamas will remain on the EU terror list until it commits to using nonviolent means to solve the Israeli-Palestinian conflict. The EU agrees with the Quartet’s preconditions for relations with the Hamas-led government: disavowal of violence, recognition of Israel, and acceptance of prior Israeli-Palestinian accords. The EU has developed, at the Quartet’s request, a temporary international mechanism to aid the Palestinian people directly while bypassing the government. CRS-19 Israel also demands that the EU include Hezbollah on its list of terrorist organizations and has protested meetings between European ambassadors and the Hezbollah ministers in the Lebanese cabinet. Israel participates in the EU’s Euro-Mediterranean Partnership Initiative, otherwise known as the Barcelona Process, and in the European Neighborhood Policy (ENP). And EU countries combined are Israel’s second trading partner, but the EU bans imports from Israeli settlements in the occupied territories.1627 Relations with the United States Overview On May 14, 1948, the United States became the first country to extend de facto recognition to the State of Israel. Over the years, the United States and Israel have developed a close friendship based on common democratic values, religious affinities, and security interests. Relations have evolved through legislation; memorandums of understanding; economic, scientific, military agreements; and trade. 16 See CRS Report RL31956, European Views and Policies Toward the Middle East, by Kristin Archick. CRS-16 Issues Peace Process. The United States has been the principal international proponent of the Arab-Israeli peace process. President Jimmy Carter mediated the Israeli-Egyptian talks at Camp David which resulted in the 1979 peace treaty. President George H.W. Bush together with Soviet President Mikhail Gorbachev convened the peace conference in Madrid in 1990 that inaugurated a decade of unprecedented negotiations between Israel, Jordan, Syria, Lebanon, and the Palestinians. President Clinton continued U.S. activism throughout his tenure in office, facilitated a series of agreements between Israel and the Palestinians as well as the Israeli-Jordanian peace treaty in 1994, hosted the Israeli-Palestinian summit at Camp David in 2000 that failed to reach a peace settlement, and sought unsuccessfully to mediate between Israel and Syria during the same year. In June 2002, President George Bush outlined his vision of a democratic Palestine to be created alongside Israel in a three-year process.1728 U.S., European Union, Russian, and U.N. representatives built on this vision to develop the international Roadmap to a Permanent Two-State Solution to the Israeli Palestinian Conflict. The Administration remains committed to the Roadmap process despite the parties’ failure to implement it.1829 27 See CRS Report RL31956, European Views and Policies Toward the Middle East, by Kristin Archick. 28 See [http://www.whitehouse.gov/news/releases/2002/06/20020624-3.html] for text of President’s speech. 29 See [http://www.state.gov/r/pa/prs/ps/2003/20062.htm]for text of Roadmap. CRS-20 Secretary of State Condoleezza Rice has not named a Special Middle East Envoy and said that she would not get involved in direct Israeli-Palestinian negotiations of issues and preferred to have the Israelis and Palestinians work together. However, she has traveled to the region several times and personally mediated after the Administration supported Israel’s disengagement from Gaza mainly as a way to return to the Roadmap, the Secretary personally mediated an accord to secure the reopening of the Rafah crossing between Gaza and Egypt in November 2005. The Administration had supported Israel’s disengagement from Gaza mainly as a way to return to the Road Map. Some Israelis criticized U.S. November 2005. Some Israelis criticized Rice’s insistence that the Palestinian elections proceed in January 2006, with Hamas participating, which produced a Hamas-led government. The Administration agrees now agrees with Israel’s preconditions for dealing with that government. for dealing with that government. Rice has indicated that she intends to get more actively involved and has traveled to the region several times in order to get the Israelis and Palestinians to focus on what she describes as a “political horizon” for the Palestinians in order to accelerate the Roadmap. In March 2007, at her prompting, Olmert agreed to meet biweekly with Abbas, but would not agree to discuss final status issues such as Jerusalem, borders, and refugees. All recent U.S. Administrations have disapproved of Israel’s settlement activity as prejudging final status issues and possibly preventing the emergence of a contiguous Palestinian state. On April 14, 2004, however President Bush noted the need to take into account changed “realities on the ground, including already existing major Israeli population centers” (i.e., settlements), asserting “it is unrealistic to expect that the outcome of final status negotiations will be full and complete return to the armistice lines of 1949.”1930 He later emphasized that it was a subject for negotiations between the parties. 17 See [http://www.whitehouse.gov/news/releases/2002/06/20020624-3.html] for text of President’s speech. 18 19 See [http://www.state.gov/r/pa/prs/ps/2003/20062.htm]for text of Roadmap. For text of Bush letter to Sharon, see [http://www.whitehouse.gov]. CRS-17 The Administration The Bush Administration also has insisted that U.N. Security Council resolutions be “balanced,” by criticizing Palestinian as well as Israeli violence and has vetoed resolutions which do not meet that standard. Since taking East Jerusalem in the 1967 war, Israel has maintained that Jerusalem is its indivisible, eternal capital. Few countries agree with this position. The U.N.’s 1947 partition plan called for the internationalization of Jerusalem, while the Declaration of Principles signed by Israel and the Palestine Liberation Organization in September 1993 says that it is a subject for permanent status negotiations. U.S. Administrations have recognized that Jerusalem’s status is unresolved by keeping the U.S. Embassy in Tel Aviv. However, inIn 1995, Congress mandated mandated that the embassy be moved to Jerusalem,20 and31 but a series of presidential waivers of penalties for non-compliance have delayed the move. U.S. legislation has granted granted Jerusalem status as a capital in particular instances and sought to prevent U.S. official recognition of Palestinian claims to the city. The failure of the State Department to follow congressional guidance on Jerusalem prompted a response in H.R. 2601, the Foreign Relations Authorization bill, passed in the House on July 20, 2005.21 The Senate did not pass an authorization bill, and it did not become law.22 The United States has never recognized Israel’s annexation of the Golan Heights, which it views as a violation of international law. However, the current administration has not attempted to revive Israeli-Syrian peace talks32 The 30 31 32 For text of Bush letter to Sharon, see [http://www.whitehouse.gov]. P.L. 109-102, November 14, 2005. H.R. 2601 (d) requires that “accurate entries be made on request of citizen.” Specifically, for the purpose of the issuance of a passport to a U.S. citizen born in Jerusalem, the (continued...) CRS-21 Senate did not pass an authorization bill, and it did not become law.33 H.R. 895, introduced on February 7, 2007, would reaffirm Congress’s prior steps toward recognizing Jerusalem as the capital of Israeli. The United States has never recognized Israel’s annexation of the Golan Heights, which it views as a violation of international law. However, the current administration has not attempted to revive Israeli-Syrian peace talks. Olmert and the Bush Administration appear to agree on isolating Damascus until it ends its relations with terrorists and Iran. Yet, some in the Israeli coalition, Knesset, and press want their government to engage Damascus in peace talks in order to remove it from an alliance that enhances the Iranian threat to the Jewish State. Some Israeli officials have questioned possible unintended consequences of the U.S. democratization policy in the Middle East, believing that it is aiding extremist organizations to gain power positions and to be legitimized. Alarmed, they cite the examples of Hezbollah in Lebanon, Hamas in the Palestinian Authority, and the Muslim Brotherhood in Egypt.2334 Trade and Investment. Israel and the United States concluded a Free Trade Agreement in 1985, and all customs duties between the two trading partners have since been eliminated. The FTA includes provisions that protect both countries’ more sensitive agricultural sub-sectors with non-tariff barriers, including import bans, quotas, and fees. Israeli exports to the United States have grown 200% since 20 P.L. 109-102, November 14, 2005. 21 H.R. 2601 (d) requires that “accurate entries be made on request of citizen.” Specifically, for the purpose of the issuance of a passport to a U.S. citizen born in Jerusalem, thethe FTA became effective. As noted above, qualified industrial zones in Jordan and Egypt are considered to be part of the U.S.-Israeli free trade area. The United States is Israel’s main trading partner, while Israel ranks about 20th among U.S. trading partners. U.S. companies have made large investments in Israel. In July 2005, the U.S. microchip manufacturer Intel announced that it would invest $4.6 billion in its Israeli branch; Israel provided a grant of 15% of an investment of up to $3.5 billion or $525 million to secure the deal. In May 2006, prominent U.S. investor Warren Buffet announced that he was buying 80% of Iscar, a major Israeli metalworks, for $4 billion. 32 (...continued) Secretary of State shall upon the request of the citizen or the citizen’s legal guardian, record the place of birth as Israel. See also CRS Report RL33530, Israeli-Arab Negotiations: Background, Conflicts, and U.S. Policy , by Carol Migdalovitz; and CRS Report RL33000, Foreign Relations Authorization, FY2006 and FY2007: An Overview, coordinated by Susan Epstein. 2233 In August 2006, El Salvador notified the Israeli Foreign Ministry that it was moving its embassy from Jerusalem to Tel Aviv. WhenWith that happensmove, no country that has diplomatic relations with Israel will have an embassy in Jerusalem. 2334 For example, head of military intelligence, Maj. Gen. Amos Yadlin, in Ahiya Raved, “Intelligence Chief: Strategic Threats on Israeli Rising,” Ynetnews, June 20, 2006, Open Source Center Document GMP20060621746004. CRS-18 the FTA became effective. As noted above, qualified industrial zones in Jordan and Egypt are considered to be part of the U.S.-Israeli free trade area. The United States is Israel’s main trading partner, while Israel ranks about 20th among U.S. trading partners. In 2005, the United States imported $23.8 million in goods from Israel and exported $27.1 million in goods to Israel. U.S. companies have made large investments in Israel. In July 2005, the U.S. microchip manufacturer Intel announced that it would invest $4.6 billion in its Israeli branch; Israel provided a grant of 15% of an investment of up to $3.5 billion or $525 million to secure the deal. In May 2006, prominent U.S. investor Warren Buffet announced that he was buying 80% of Iscar, a major Israeli metalworks, for $4 billion. On July 26, the House passed H.R. 2730, the United States-Israel Energy Cooperation Act. It22 The U.S.-Israel Energy Cooperation Act, S. 838, introduced on March 12, 2007, and H.R. 1838, introduced on March 29, would authorize a grant program of $20 million for each of fiscal years 20062008 through 20122014 to fund joint ventures between U.S. and Israeli businesses and academics for research, development, or commercialization of alternative energy, improved energy efficiency, or renewable energy sources. S. 1862, the Senate version of the bill, was referred to the Senate Foreign Relations Committee on October 7, 2005 energy sources. Aid. Israel has beenwas the largest recipient of U.S. foreign aid since 1976. In after 1976 and until Iraq supplanted it after 2003. In 1998, Israeli, congressional, and Administration officials agreed to reduce U.S. $1.2 billion in Economic Support Funds (ESF) to zero over ten years, while increasing Foreign Military Financing (FMF) from $1.8 billion to $2.4 billion. The process began in FY1999, with P.L. 105-277, October 21, 1998, and concludes with FY2008. Separately from the scheduled ESF cuts, Israeli has received received an extra $1.2 billion to fund implementation of the Wye agreement (part of the Israeli-Palestinian peace process) in FY2000, $200 million in anti-terror assistance in FY2002, and $1 billion in FMF in the supplemental appropriations bill for FY2003. P.L. 109-102, November 14, 2005, the Foreign Operations Appropriations Act, 2006, provided $240 million in ESF, $2.28 billion in FMF, and $40 million for the settlement of migrants to Israel. H.R. 5522, the Foreign Operations Appropriations bill, FY2007, passed in the House on June 9, 2006, appropriates $120 2006, appropriated $120 million in ESF, $40 million for migration and refugee assistance, and $2.34 billion in FMF (of which $610 million may be spent for defense acquisitions in Israel), for Israel. The Senate has not yet passed a bill. On July 14, 2006, during Israel’s war against Hezbollah in Lebanon, the Pentagon notified Congress that it planned to sell up to $210 million in jet fuel to Israel. On July 22, it was reported that the Administration is expediting the delivery of precision-guideddid not pass a bill. Foreign Operations programs for FY2007 are operating under the terms of a continuing appropriations resolution (H.R. 5631/P.L. 109-289, as amended) which provides funding at the FY2006 level or the Housepassed FY2007 level, whichever is less; for Israel, it is the House FY2007 bill. The Administration has requested $2.4 billion in FMF for FY2008. On March 1, Under Secretary of State Nicholas Burns met with Bank of Israel Governor Stanley Fischer, Ministry of Finance Director General Yarom Ariav, and other Israeli officials to discuss future U.S. assistance to Israel. Some news outlets reported that Israel is requesting that annual FMF be increased from the current $2.4 billion to $3 billion over ten years.35 Officials have not confirmed these reports. On July 14, 2006, during Israel’s war against Hezbollah, the Pentagon notified Congress that it planned to sell up to $210 million in jet fuel to Israel. On July 22, it was reported that the Administration was expediting the delivery of precisionguided bombs that had been ordered by Israel in 2005. Congress has legislated other special provisions regarding aid to Israel. Since the 1980s, ESF and FMF have been provided as all grant cash transfers, not designated for particular projects, and have been transferred as a lump sum in the first month of the fiscal year, instead of in periodic increments. Israel is allowed to spend about one-quarter of the military aid for the procurement in Israel of defense articles and services, including research and development, rather than in the United States. Finally, to help Israel out of its economic slump, P.L. 108-11, April 16, 2003, provided $9 billion in loan guarantees over three years, use of which has since been CRS-19 extended to 2008 and may be extended further. As of September 2006, $4.5 billion of the guarantees remain unexpended.24 35 Itamar Eichnter, et. al., “Israel to US: Don’t Talk with Hamas,” Yedi’ot Aharonot, March 4, 2007, Open Source Center Document GMP20070304736003. CRS-23 provided $9 billion in loan guarantees (for commercial loans) over three years. As of September 2006, $4.5 billion of the guarantees was unexpended.36 P.L. 109-472, January 11, 2007, extends the period for which the guarantees are to be provided for a second time until September 30, 2011. Security Cooperation. Although Israel is frequently referred to as an ally of the United States, the two countries do not have a mutual defense agreement. Even though there is no treaty obligation, on February 1, 2006, President Bush stated that the United States would defend Israel militarily.25 In May, the President told Prime Minister Olmert, “In the event of any attack on Israel, the United States will come to Israel’s aid.”26President Bush has said several times that the United States would defend Israel militarily in the event of an attack.37 On November 30, 1981, U.S. Secretary of Defense Caspar Weinberger and Israeli Minister of Defense Ariel Sharon signed a memorandum of understanding (MOU), establishing a framework for continued consultation and cooperation to enhance the national security of both countries. In November 1983, the two sides formed a Joint Political Military Group, (JPMG), which meets twice a year, to implement most provisions of the MOU. Joint air and sea military exercises began in June 1984, and the United States has constructed facilities to stockpile military equipment equipment in Israel. In 2001, an annual interagency strategic dialogue, including representatives representatives of diplomatic, defense, and intelligence establishments, was created to discuss long-termlongterm issues. In 2003, reportedly at the U.S. initiative due to bilateral tensions related to Israeli arms sales to China, the talks were suspended. (See Military Sales, below.) After the issue was resolved, the talks resumed at the State Department on November 28, 2005, and reportedly focused on Syria and democratization in the Arab world. On January 11, 2006, the JPMG convened in Tel Aviv also for the first time since 2003. 28, 2005. Most recently, on January 21, 2007, Under Secretary of State Nicholas Burns and Deputy Secretary of Defense Gordon Englund headed a U.S. delegation to Tel Aviv for the annual talks, reportedly focused on Iran. Minister of Transportation Shaul Mofaz and Defense Ministry Director General (now Chief of Staff) Gabi Ashkenazi led the Israeli delegation. After the meeting, Mofaz said that the Americans want to increase the number of dialogue sessions to four a year. Secretary of Defense Robert Gates’ visit to Israel in April 2007, the first by a U.S. Secretary of Defense in eight years, was seen as a clear sign that strains in the relationship had truly eased. His meetings included discussions of bilateral militaryto-military relations, the peace process, Syria, Iran, and Iraq. Gates tried to assure his Israeli interlocutors that a planned U.S. arms sale to Saudi Arabia, reportedly to include satellite-guided munitions, was needed to counter the Iranian threat and would not threaten Israel’s military superiority.38 On May 6, 1986, Israel and the United States signed an agreement (the contents of which are secret) for Israeli participation in the Strategic Defense Initiative (SDI/”Star Wars”). Under SDI, Israel is developing the “Arrow” anti-ballistic missile with a total U.S. financial contribution so far of more than $1 billion, increasing annually. The system became operational in 2000 in Israel and has been tested successfully, most recently on December 2, 2005, when it shot down a missile simulating an Iranian Shahab-3 that can be armed with nuclear warheads and reach Israel. The Defense Appropriations Act for FY2007, P.L. 109-289, September 29, 2006 appropriates $137,894,000 for the Arrow program. Of this amount, $53,000,000 is for producing missile components in the United States and missile components and missiles in Israel to meet Israel’s defense requirements, and $20,400,000Arrow anti-ballistic missile 36 See also CRS Report RL33222, U.S. Foreign Aid to Israel, by Jeremy Sharp. 37 Interview with Reuters, cited in Glenn Kessler, “Bush Says U.S. Would Defend Israel Militarily,” Washington Post, February 2, 2006. See also [http://www.whitehouse.gov/news/ releases/2006/05/20060523-9.html] for transcript of joint Bush-Olmert news conference in May 2006. 38 David S. Cloud and Jennifer Medina, “Gates Assures Israel on Plan to Sell Arms to Saudis,” New York Times, April 20, 2007. CRS-24 with a total U.S. financial contribution so far of more than $1 billion, increasing annually. The system became operational in 2000 in Israel and has been tested successfully. The Defense Appropriations Act for FY2007, P.L. 109-289, September 29, 2006 appropriates approximately $138 million for the Arrow program. Of this amount, $53 million is for producing missile components in the United States and missile components and missiles in Israel to meet Israel’s defense requirements, and $20.4 million is for a joint feasibility study of the Short Range Ballistic Missile Defense (SRBMD) initiative, a missile interceptor designed to thwart missiles and rockets from 40 to 200 kilometers that is not expected to be operational before 2011. 24 See also CRS Report RL33222, U.S. Foreign Aid to Israel, by Jeremy Sharp. 25 Interview with Reuters, cited in Glenn Kessler, “Bush Says U.S. Would Defend Israel Militarily,” Washington Post, February 2, 2006. 26 See [http://www.whitehouse.gov/news/releases/2006/05/20060523-9.html] for text of joint news conference. CRS-20 The U.S. DOD Missile Defense Agency has agreed to extend the U.S.-Israel Arrow System Improvement Program (ASIP) and post-ASIP through 2013. Security cooperation extends to cooperation in counterterrorism. The House passed H.R. 884, the Promoting Antiterrorism through Technology and Sciences Act (PACTS Act) on February 27, 2007; it includes Israel as a possible foreign partner for international cooperative activities. In 1988, under the terms of Sec. 517 of the Foreign Assistance Act of 1961, as amended, Israel was designated a “major non-NATO ally,” affording it preferential treatment in bidding for U.S. defense contracts and access to expanded weapons systems at lower prices. Israel participates in NATO’s Mediterranean Dialogue, its Istanbul Cooperative Initiative, and in Operation Active Endeavor monitoring the Mediterranean Sea to thwart terrorism. On October 16, 2006, Israel signed an Individual Cooperation Program (ICP) with NATO, providing for cooperation in such fields as counter-terrorism, intelligence sharing, and disaster preparedness, etc. After the war in Lebanon ended in August 2006, the State department Office of Defense Trade Controls began to investigate whether Israel’s use of U.S.-made cluster bombs violated agreements that restrict use of the weapons to military targets. Other Current Issues Military Sales. Israel accounts for about 10% of the world’s defense exports, totaling $3.5 billion in 2004. The United States and Israel have regularly discussed Israel’s sale of sensitive security equipment and technology to various countries, especially China. Israel reportedly is China’s second major arms supplier, after Russia.27 U.S. administrations believe that such sales are potentially harmful to the security of U.S. forces in Asia. In 2000, the United States persuaded Israel to cancel the sale of the Phalcon, an advanced, airborne early-warning system, to China. More recently, Israel’s agreement to upgrade Harpy Killer unmanned aerial vehicles (UAVs) that it sold to China in 1999 angered the Department of Defense (DOD). China tested the weapon over the Taiwan Strait in 2004. DOD suspended technological cooperation with the Israel Air Force on the future F-35 Joint Strike Fighter (JSF) aircraft as well as several other cooperative programs, held up shipments of some military equipment, and refused to communicate with the Israeli Defense Ministry Director General, whom Pentagon officials believed had misled . On February 7, 2007, Amir Peretz became the first Israeli defense minister to visit NATO headquarters in Brussels. H.Res. 235, introduced and referred to the Committee on Foreign Affairs on March 9, 2007, states that Israel is deserving of NATO membership and supports an upgrade in Israel’s relationship with NATO to that of a leading member of the Mediterranean Dialogue and member of the Partnership for Peace. After the war against Hezbollah in Lebanon ended in August 2006, the State Department Office of Defense Trade Controls began to investigate whether Israel’s use of U.S.-made cluster bombs in the war had violated the Arms Export Control Act, which restricts use of the weapons to military targets, or confidential bilateral agreements with the United States that restrict use of U.S. supplies cluster munitions to certain military targets in non-civilian areas. On January 28, 2007, the State Department informed Congress of preliminary findings that Israel may have violated agreements by using cluster bombs against civilian populated areas. A final determination has not yet been made. Israel has denied violating agreements, saying that it had acted in self-defense. The U.N. has reported that 30 deaths and 180 injuries in southern Lebanon from the weapons since the war ended.39 39 David S. Cloud and Greg Myre, “Israel May Have Violated Arms Pact, U.S. Officials Say,” New York Times, January 28, 2007. CRS-25 Other Current Issues Military Sales. In 2006, Israel earned $4.4 billion from defense sales. India was Israel’s biggest customer, with purchases totaling $1.5 billion. The United States and Israel have regularly discussed Israel’s sale of sensitive security equipment and technology to various countries, especially China. Israel reportedly is China’s second major arms supplier, after Russia.40 U.S. administrations believe that such sales are potentially harmful to the security of U.S. forces in Asia. In 2000, the United States persuaded Israel to cancel the sale of the Phalcon, an advanced, airborne early-warning system, to China. More recently, Israel’s agreement to upgrade Harpy Killer unmanned aerial vehicles (UAVs) that it sold to China in 1999 angered the Department of Defense (DOD). China tested the weapon over the Taiwan Strait in 2004. In reaction, DOD suspended technological cooperation with the Israel Air Force on the future F-35 Joint Strike Fighter (JSF) aircraft as well as several other cooperative programs, held up shipments of some military equipment, and refused to communicate with the Israeli Defense Ministry Director General, whom Pentagon officials believed had misled them about the Harpy deal. On August 17, 2005, the U.S. DOD and the Israeli Ministry of Defense issued a joint press statement reporting that they had signed an understanding “designed to remedy problems of the past that seriously affected the technology security relationship and to restore confidence in the technology security area. In the coming months additional steps will be taken to restore confidence fully.”2841 According to the Israeli newspaper Ha’aretz, Israel will continue to voluntarily adhere to the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies, without actually being a party to it. On November 4, in Washington, Defense Minister Mofaz announced that Israel would again participate in the F-35 JSF project and that the crisis in relations was over. In March 2006, the new Defense Ministry Director General Jacob Toren said that an interagency process 27 Ron Kampeas, “Israel-U.S. Dispute on Arms Sales to China Threatens to Snowball,” Jewish Telegraphic Agency, June 8, 2005, citing a U.S.-China Economic and Security Review 2004 report. 28 “U.S. Israel Agree to Consult on Future Israeli Weapons Sales - Nations Affirm Joint Commitment to Address Global Security Challenges,” U.S. State Department Press Release, August 17, 2005. CRS-21 had begun approving marketing licenses for Israeli firms to sell selected dual-use items and services to China, primarily for the 2008 Olympic Games, on a case-bycase basis. On October 21, 2005, it was reported that Israel would freeze or cancel a deal to upgrade 22 Venezuelan Air Force F-16 fighter jets, with some U.S. parts and technology. The Israeli government had requested U.S. permission to proceed, but it was not granted. Espionage-Related Cases. In November 1985, Jonathan Pollard, a civilian U.S. naval intelligence employee, and his wife were charged with selling classified documents to Israel. Four Israeli officials also were indicted. The Israeli government 40 Ron Kampeas, “Israel-U.S. Dispute on Arms Sales to China Threatens to Snowball,” Jewish Telegraphic Agency, June 8, 2005, citing a U.S.-China Economic and Security Review 2004 report. 41 “U.S. Israel Agree to Consult on Future Israeli Weapons Sales - Nations Affirm Joint Commitment to Address Global Security Challenges,” U.S. State Department Press Release, August 17, 2005. CRS-26 claimed that it was a rogue operation. Pollard was sentenced to life in prison and his wife to two consecutive five-year terms. She was released in 1990, moved to Israel, and divorced Pollard. Israelis complain that Pollard received an excessively harsh sentence. Israel granted him citizenship in 1996, and he remains a cause celebre in Israel. Israeli officials repeatedly raise the Pollard case with U.S. counterparts, but no formal request for clemency is pending.2942 Pollard’s Mossad handler Rafi Eitan, now 79 years old, is head of the Pensioners’ Party and a member of the current government. On June 8, 2006, the Israeli High Court of Justice refused to intervene in efforts to obtain Pollard release. On June 13, 2005, U.S. Department of Defense analyst Lawrence Franklin was indicted for the unauthorized disclosure of classified information (about Iran) to a foreign diplomat. Press reports named Na’or Gil’on, a political counselor at the Israeli Embassy in Washington, as the diplomat. Gil’on has not been accused of wrongdoing and returned to Israel. Then Foreign Minister Silvan Shalom strongly denied that Israel was involved in any activity that could harm the United States, and Israel’s Ambassador to the United States declared that “Israel does not spy on the United States.” Franklin had been charged earlier on related counts of conspiracy to communicate and disclose national defense information to “persons” not entitled to receive it. On August 4, 2005, two former officials of the American Israel Political Action Committee (AIPAC), Steven J. Rosen and Keith Weissman, whom AIPAC fired in April 2005, were identified as the “persons” and indicted for their parts in the conspiracy. Both denied wrongdoing. On October 24, their attorneys asked the court to summon Israeli diplomats to Washington for testimony. On January 20, 2006, Franklin was sentenced to 12 years, 7 months in prison. Rosen and Weissman are the first nongovernment employees ever to be indicted under the 1917 Espionage Act for receiving classified information orally; they argue that they were exercising protected free speech and the law was designed to punish government officials. In August, a judge ruled that “the rights protected by the First Amendment must at times yield to the need for national security.” However, he required the government to establish that national security is genuinely at risk and that those who wrongly disclosed the information knew that disclosure could harm the nation. 29 See CRS Report RS20001, Jonathan Pollard: Background and Considerations for Presidential Clemency, by Richard Best and Clyde Mark. CRS-22 A trial may begin in May 2007. Intellectual Property Protection. The “Special 301” provisions of the Trade Act of 1974, as amended, require the U.S. Trade Representative (USTR) to identify countries which deny adequate and effective protection of intellectual property rights. In April 2005, the USTR elevated Israel from its “Watch List” to the “Priority Watch List” because it had an “inadequate data protection regime” and intended to pass legislation to reduce patent term extensions. The USTR singled out for concern U.S. biotechnology firms’ problems in Israel and a persistent piracy affecting the U.S. copyright industry. In November 2005, U.S. Ambassador to Israel Richard H. Jones urged the Knesset to put Israel in line with Organizations for Economic Cooperation and Development (OECD) countries with copyright law. (Joining the OECD is an important Israeli foreign policy goal.) On December 15, then-Minister of Industry Olmert and then-USTR Rob Portman agreed to negotiations on the issue. On April 28, 2006, however, the USTR decided to keep April 28, 2006, 42 See CRS Report RS20001, Jonathan Pollard: Background and Considerations for Presidential Clemency, by Richard Best and Clyde Mark. CRS-27 however, the USTR retained Israel on the Priority Watch List due to continuing concern about copyright matters and about legislation Israel had passed in December 2005 that weakened protections for U.S. pharmaceutical companies.30 As they had in 2005, Israeli officials criticized the USTR decision43 According to Deputy Secretary of Commerce David Sampson, the U.S. government claims that parties in Israel are making unfair use of information submitted when patented pharmaceuticals are registered in Israel and demands that the information not be transferred to powerful Israeli generic drug companies, such as Teva. It also is concerned about software, music and DVD piracy in Israel.44 Israeli officials have criticized the USTR decisions as discriminatory. U.S. Interest Groups An array of interest groups has varying views regarding Israel and the peace process. Some are noted below with links to their websites for information on their policy positions. American Israel Public Affairs Committee: [http://www.aipac.org/] American Jewish Committee: [http://www.ajc.org/site/c.ijITI2PHKoG/b.685761/k.CB97/Home.htm] American Jewish Congress: [http://www.ajcongress.org/] Americans for Peace Now: [http://www.peacenow.org/] Anti-Defamation League: [http://www.adl.org/] Conference of Presidents of Major Jewish Organizations: [http://www.conferenceofpresidents.org/] The Israel Project: [http://www.theisraelproject.org/site/c.hsJPK0PIJpH/b.672581/k.CB99/Home.htm] Israel Policy Forum: [http://www.israelpolicyforum.org/] New Israel Fund: [http://www.nif.org/] Zionist Organization of America: [http://www.zoa.org/] 3043 For U.S. government explanation of Israel’s listing on the Priority Watch List, see Full Version of the 2006 Special 301 Report, 04/28/2006, accessible at [http://www.ustr.gov] CRS-23 Figure 1. Map of Israel LEBANON Israel International Boundary Armistice Line, 1949 District Boundary National Capital Major Cities * GOLAN HEIGHTS Israeli occupied with current status subject to Israeli-Palestininian Interim Agreement. 0 Tel-Aviv Yafo Me d it e rran e a n Ashdod Sea WEST BANK* S Y R I A Jordan River 50 Miles (Israeli occupied) Haifa Nazareth 1967 Cease - Fire Line 50 Km 0 UNDOF Zone Jerusalem Ashqelon 1949 Armistice Line Gaza GAZA STRIP 1950 Armistice Line Dead S ea Beersheba Dimona JORDAN I S R A E L E GY P T Gul f of A qaba Source: Map Resources. Adapted by CRS. (K.Yancey 6/15/06). SAU DI ARABIAApril 28, 2006, accessible at [http://www.ustr.gov] 44 Ora Coren, “U.S. Worried about Israel’s Intellectual Property Laws,” Ha’aretz, February 1, 2007. CRS-28 Figure 1. Map of Israel