Order Code RL33476
Israel: Background and Relations
with the United States
Updated July 6August 21, 2007
Carol Migdalovitz
Specialist in Middle Eastern Affairs
Foreign Affairs, Defense, and Trade Division
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, 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 peace treaties with
Egypt in 1979 and 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 Palestinian intifadah or uprising
against Israeli occupation. Israeli and Palestinian officials accepted but have notnever
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 Hamas victory in January 2006 Palestinian elections complicated
Israeli-Palestinian relations. Then, in June, the Hamas military wing kidnaped an
Israeli soldier, provoking a majoran Israeli military offensive against the Gaza Strip.
Israel Israel
resumed relations and talks with the Palestinian Authority (PA) in June 2007, after
Palestinian President Mahmud Abbas dissolved the Hamas-led unity government in
response to Hamas’s military takeover of the Gaza Strip. Israel unilaterally withdrew
from southern Lebanon in 2000; 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 cease-fire took effect on August 14.
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 is 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 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
Domestic Politics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
U.S. AidAid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Historical Overview of Israel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Government and Politics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Recent Political Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Current Government and Politics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Scandals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
War and Aftermath . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Winograd Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Political Repercussions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Current Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Foreign Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1011
Middle East . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1011
Iran . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1011
Palestinian Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1213
Egypt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Jordan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Syria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1516
Lebanon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1617
Iraq . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1718
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1718
European Union . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1819
Relations with the United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1920
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1920
Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1920
Peace Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Trade and Investment20
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Aid. . . . . . 21
Jerusalem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Security Cooperation21
Syrian Talks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Other Current Issues . . . . . . . . . . . . . . 22
Democratization Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Military Sales22
Trade and Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Aid . . . . . . 25
Espionage-Related Cases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Intellectual Property Protection. . . . . . . . . 23
Security Cooperation . . . . . . . . . . . . . . . . . . . . . . . . 27
U.S. Interest Groups. . . . . . . . . . . . . . 24
Other Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
List of Figures
Figure 1. Map of Israel. . . . . . . . . . . . . . . . 26
Military Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
List of Tables
Table 1. Parties in the Knesset . . . .. . . . . . . . . 26
Espionage-Related Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Table 2. Key Cabinet Officers27
Intellectual Property Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
U.S. Interest Groups . . . . . . . . . . 5
Table 3. Basic Facts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Israel: Background and Relations
with the United States
Most Recent Developments
Domestic Politics
Prime Minister Ehud Olmert declared that he had no intention of resigning in
response to the Winograd Commission’s April 30, 2007, Interim Report – a scathing
indictment of the government’s preparations for and the conduct of the summer 2006
war in Lebanon. Instead, he promised to remedy the failings cited in the report.
Public opinion polls indicated lack of support for Olmert and for Defense Minister
Amir Peretz.1
Olmert has not been challenged as leader of his Kadima Party, but Peretz was
defeated in the first round of the Labor Party leadership primary on May 28. In the
second round, on June 12, former Prime Minister and former Israeli Defense Forces
(IDF) Chief of Staff Ehud Barak bested former Shin Bet (Israeli Counterintelligence
and Internal Security Service) head Ami Ayalon to become party leader. Barak then
took over as Defense Minister, saying that he would serve until an election or until
someone other than Olmert forms a new government. Barak is not a Member of the
Knesset (MK) and must be elected to parliament in order to become Prime Minister.
He opposes withdrawing Labor from the government and forcing early elections,
tacitly recognizing that polls show Benjamin Netanyahu and his Likud Party are
likely to place first in a poll. Nonetheless, Barak has promised to end the coalition
partnership with Kadima after the final Winograd Commission report is published.
At this time, Members of the Knesset 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.
On June 13, the Knesset elected Kadima candidate 83-year-old Shimon Peres
to be President of Israel. On July 4, Olmert made changes in his cabinet, naming
Haim Ramon Vice Premier to replace Peres, Roni Bar-On Finance Minister, and
Meir Shitrit Interior Minister, among other appointments. Ramon, who had stepped
1
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.
CRS-2
down as Justice Minister when indicted in now-resolved criminal case (See
Government and Politics/Scandals, below), and Bar-On are close associates of the
Prime Minister.
U.S. Aid
After meeting Prime Minister Olmert at the White House on June 19, President
Bush said that a new 10-year aid agreement would be signed to ensure that Israel
retains a “qualitative military edge.” Israel has asked for military assistance to be
increased $50 million a year; at the end of 10 years, Israel would receive $2.9 billion
a year. The President also directed Secretary of Defense Robert Gates to expedite
approval of IDF procurement requests in order to replenish arms and materiel used
during the 2006 war against Hezbollah in Lebanon.28
List of Figures
Figure 1. Map of Israel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
List of Tables
Table 1. Parties in the Knesset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Table 2. Key Cabinet Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Table 3. Basic Facts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Israel: Background and Relations
with the United States
Most Recent Developments
Domestic Politics
On July 9, 2007, Russian-born billionaire Arkadi Gaydamak announced the
creation of his Social Justice Party, with the aim of ousting the current government.
He said that he would serve as party leader but not stand for the Knesset (parliament)
or try to become prime minister, preferring to run for mayor of Jerusalem and “play
a central role in Israel’s political life.” Some reports have suggested that Gaydamak
would likely support Likud Party leader Benjamin Netanyahu in national elections.
French authorities seek to arrest Mr. Gaydamak in connection with an arms-dealing
case.1
On July 20, Israeli Prime Minister Olmert announced his intention to seek a
second term as leader of his Kadima Party and thereby run as its candidate for prime
minister in the next elections. On August 15, Netanyahu defeated Moshe Feiglin, a
radical settler, in a Likud Party leadership primary.
Aid
On August 13, U.S. Undersecretary of State for Political Affairs Nicholas Burns
signed a memorandum of understanding with Israeli Foreign Ministry Director
General Aharon Abramowitz to govern a new 10-year, $30 billion aid package. Aid
will increase from $2.4 billion in Foreign Military Financing (FMF) in FY2008 to
$2.55 billion in FY2009, and average $3 billion a year by the conclusion of the 10year period. Israel is allowed to spend 26.3% of the aid in Israel; the remainder is to
be spent on U.S. arms. Burns stated that “a secure and strong Israel is in the interests
of the United States” and that the aid was an “investment in peace” because “peace
will not be made without strength.” Congress must approve the annual
appropriations.
1
“Israeli Billionaire Launches Party ‘To Oust Olmert,’” Daily Telegraph, July 10, 2007.
CRS-2
Historical Overview of Israel2
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
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.
2
For more, see Howard M. Sachar, A History of Israel: From the Rise of Zionism to Our
Time, New York, Knopf, 1996.
CRS-3
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.
2
For more, see Howard M. Sachar, A History of Israel: From the Rise of Zionism to Our
Time, New York, Knopf, 1996.
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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.3 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 for
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
(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 troubledtumultuous 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. On November
20, Labor voted to withdraw from the government, depriving Sharon of his
parliamentary majority.
3
For Basic Laws, see [http://www.mfa.gov.il/mfa/government/law/basic%20laws/].
CRS-4
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 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 in the area between the Jordan River and the Mediterranean
Sea) would have to be ceded. It affirmed a commitment to the Roadmap, 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.4
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,
3
For Basic Laws, see [http://www.mfa.gov.il/mfa/government/law/basic%20laws/].
4
For Kadima’s Action Plan, see [http://kadimasharon.co.il/15-en/Kadima.aspx].
CRS-4
the Golan Heights, an undivided Jerusalem, settlement blocs, and hilltops, and
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
Ehud
Olmert became Acting Prime Minister and, on January 16, he 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
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.5
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 drew
supporters from Likud, which lost 75% of its votes from 2003. Likud’s decline also
4
5
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-5
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 might allow Shas to accommodate Kadima’s
plans for the territories. Yisrael Beiteinu (Israel Our Home), a secular party
appealing appealing
to Russian-speakers, wants borders that exclude Israeli Arabs and their
land and
include settlements; it opposes unilateral disengagement and the Roadmap.
The The
rightist National Union/National Religious Party (NU/NRP) drew support from
settlers; it opposes all withdrawals from the West Bank, where it believes Jews have
a biblical right to settle. Voters harmed by Netanyahu’s policies as well as young
protest voters supported the new Pensioners’ Party (GIL), which did not elaborate its
positions on other issues. The ultra-orthodox United Torah Judaism (UTJ) also seeks
increased child allowances and military deferments for religious school students.
United Arab List, Hadash, and Balad — Israeli Arab parties — are 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)a
Meretz/Yahad
United Arab List/Ta’al
Hadash
Balad
a
UTJ includes the Lithuanian ultra-Orthodox Degel HaTorah party and the Hasidic Agudat Israel party.
5
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-5
Current Government and Politics
On May 4, 2006, the Knesset approved a four-party coalition government of the
Kadima Party, the Labor Party, the Pensioners’ Party, and the 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 permanent borders for a democratic state with a Jewish
CRS-6
majority.6 They state that the government will strive to negotiate with the Palestinians, but it will act in the absence 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 7 They state that the government will strive to negotiate with
the Palestinians, but it will act in the absence of negotiations. The guidelines also
promise to narrow the social gap. 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.
In October 2006, Olmert broadened the coalition in order to stabilize it in the
aftermath of the war in Lebanon, 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, a previously non-existent post.
Scandals
A seemingly unTable 2. Key Cabinet Officers
ending series of scandals
has created a sense that
Ehud Olmert
Prime Minister
Kadima
the government is operTzipi Livni
Vice Prime Minister;
Kadima
ating under a cloud. In
Minister
of
Foreign
Affairs
October 2006, police
Haim Ramon
Vice Prime Minister
Kadima
recommended that the
Attorney General indict
Ehud Barak
Deputy Prime Minister;
Labor
President Moshe Katzav
Minister of Defense
on charges of rape, sexRoni Bar-On
Minister of Finance
Kadima
ual harassment, and obAvigdor Lieberman Deputy Prime Minister;
Yisrael
struction of justice and,
Minister of Strategic Threats Beiteinu
on January 23, 2007,
Daniel Friedmann
Minister of Justice
nonAttorney General
partisan
Menachem Mazuz anAvi Dichter
Public Security
Kadima
nounced that he would.
Shaul Mofaz
Deputy Prime Minister;
Kadima
Prime Minister Olmert,
Minister of Transportation*
ministers, and Members
Meir Shitrit
Minister of Interior
Kadima
of the Knesset called on
Yuli Tamir
Minister of Education
Labor
Katzav to resign. InEli Yishai
Deputy Prime Minister;
Shas
stead, the President deMinister of Industry, Trade,
nied the charges and reand Labor
quested that he be declared temporarily inca*Also in charge of strategic dialogue with the United States.
pacitated for three
months or until after
presenting his case in a
hearing with the Attorney General before charges are filed. Katzav’s leave request was approved and later
extended. Speaker of the Knesset Dalia Itzik became Acting President. On June 30,
6
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
two weeks before the expiration of his term, Katzav submitted his resignation under
the terms of a controversial plea bargain providing that he will be indicted for lesser
offenses, receive a suspended sentence, and pay damages. Public watchdog groups
have appealed the plea agreement to the Supreme Court.
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
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)a
Meretz/Yahad
United Arab List/Ta’al
Hadash
Balad
a
UTJ includes the Lithuanian ultra-Orthodox Degel HaTorah party and the Hasidic Agudat Israel party.
6
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].
7
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-6
Scandals
Table 2. Key Cabinet Officers
A series of scandals
has created a sense that the
Ehud Olmert
Prime Minister
Kadima
government is operating
Tzipi Livni
Vice Prime Minister;
Kadima
under a cloud. In October
Minister of Foreign Affairs
2006, police recommended
Haim Ramon
Vice Prime Minister
Kadima
that the Attorney General
indict President Moshe
Ehud Barak
Deputy Prime Minister;
Labor
Katzav on charges of rape,
Minister of Defense
sexual harassment, and
Roni Bar-On
Minister of Finance
Kadima
obstruction of justice and
Avigdor Lieberman Deputy Prime Minister;
Yisrael
Attorney General
Minister of Strategic Threats Beiteinu
Menachem Mazuz later
Daniel Friedmann
Minister of Justice
nonannounced that he would.
partisan
Prime Minister Olmert,
Avi Dichter
Public Security
Kadima
ministers, and Members of
Shaul Mofaz
Deputy Prime Minister;
Kadima
the Knesset called on
Minister of Transportation*
Katzav to resign. Instead,
Meir Shitrit
Minister of Interior
Kadima
the President denied the
Yuli Tamir
Minister of Education
Labor
charges and requested that
Eli Yishai
Deputy Prime Minister;
Shas
he be declared temporarily
Minister of Industry, Trade,
incapacitated for three
and Labor
months or until after presenting his case in a hear*Also in charge of strategic dialogue with the United States.
ing with the Attorney General before charges are
filed. Katzav’s leave request was approved and
later extended. Speaker of the Knesset Dalia Itzik became Acting President. On June
30, 2007, two weeks before the expiration of his term, Katzav submitted his
resignation under the terms of a controversial plea bargain providing that he will be
indicted for lesser offenses, receive a suspended sentence, and pay damages. Public
watchdog groups have appealed the plea agreement to the Supreme Court.
Prime Minister Olmert also is involved in several scandals. 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. 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 former Finance Minister Abraham Hirchson on
suspicion of embezzling funds from a nonprofit organization to finance political
CRS-7
activity for the Likud Party, to which he had belonged prior to joining Kadima. On
April 22, Hirchson stepped down as Minister pending completion of the investigation, and ultimately; he resigned on July 2.
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 Gaza and the July 12 abduction of two Israeli soldiers from northern Israel by
Hezbollah.78 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, but they questioned its
prosecution.
Israelis have been debating the war since it was concluded. Critics note that the
kidnaped soldiers were not rescued and that Hezbollah is rearming and has been
strengthened politically. The government claims success in forcing Hezbollah from
the border, in degrading its arms, and in pressuring the Lebanese government, aided
by international forces, to assert itself in south Lebanon.
The fall-outfallout from the war 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.
7
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.
CRS-8
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 a governmental commission, the “Committee for
the Examination of the Events of the Lebanon Campaign 2006” to look into the
preparation and conduct of the war and gave it 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,
assigning personal blame for “failings” to Prime Minister Olmert, Defense Minister
Peretz, and Chief of Staff Halutz.89 It criticized Olmert for “hastily” deciding to go
to war without a comprehensive plan, close study, or systematic consultation with
others, especially outside the Israeli Defense Forces (IDF). It accused him of declaring
declaring unclear, over-ambitious, and infeasible goals for the campaign and for failing to
8
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.
9
For text of Interim Report, see
[http://www.mfa.gov.il/MFA/Government
/Communiques/2007/Winograd+Inquiry+Commission+submits+Interim+Report+30-Apr
-2007.htm].
CRS-8
failing to adapt them once their deficiencies were realized. The Report concluded
that these
accusations add up to a “serious failure” in exercising “judgment,
responsibility, and
prudence.” It faulted Peretz for making decisions without
systematic consultations
despite his lack of knowledge and experience in military
matters, emphasizing his
lack of strategic oversight of the IDF. It concluded, “his
serving as Minister of
Defense during the war impaired Israel’s ability to respond
well to its challenges.”
The Commission severely criticized former Chief of Staff
Dan Halutz, who has
had already resigned. It said that he and the army were not prepared
for the abduction of
the soldiers, responded “impulsively,” and misled and failed to
inform the political
echelon. In sum, the Report accused Halutz of “flaws in
professionalism, responsibility, and judgment.” The Commission recommended
strengthening staff work to
improve the quality of decision-making, full incorporation of the Ministry of Foreign
Affairs in security decisions, and improvement in the
functioning of the National
Security Council, among other steps. AThe final
Commission report is expected within
monthshas been delayed in order to allow those who might be harmed
by its conclusions to respond.
Political Repercussions
The effectpolitical effects of the Winograd Commission’s findings on Prime Minister Olmert
Olmert have been minimal politicallythus far. Most -- (26 out of 29 --) Kadima MKs supported
him.
Foreign Minister Tzipi Livni called for Olmert’s resignation, but did not appear
to work to
gain the support of others in the party. Afterwards, she remained in the
government,
with her image somewhat tarnished by her unsuccessful action. Shas, Yisrael
Yisrael Beitenu, and the Pensioners’ Party supported the Prime Minister’s refusal to resign
resign and were said to have rejected the idea of remaining in a Kadima-led
government if
it were led by Livni for reasons of ideology and gender. Yisrael
Beitenu views her
as too strongly supportive of a peace process and Shas would not follow
a female
head of government. Olmert has not been challenged as leader of his
Kadima Party and easily defeated three no-confidence votes against his
government in the Knesset.
8
For text of Interim Report, see [http://www.mfa.gov.il/MFA/Government
/Communiques/2007/Winograd+Inquiry+Commission+submits+Interim+Report+30-Apr
-2007.htm].
CRS-9
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 member states. 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 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 2006, most economic indicators were positive: inflation low,
employment and wages rising, and the standard of living rising.
Table 3. Basic Facts
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
7,150,000 (2007 est.)
1.18% (2006 est.)
— Jewish 80% (2007 est.)
— non-Jewish (mostly Arab) 20% (2007 est.)*
5% (2006 est.)
$26,200 (2006 est.)
1.9% (2006 est.)
8.5% (2006 est.)
91% (2006 est.)
$81.98 billion (June 2006 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 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
CRS-10
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
The 2006 budget was not approved before the dissolution of the last parliament;
therefore spending remained at 2005 levels from January through May and a budget
surplus accrued due to the low expenditures and higher than expected tax revenues.
The surplus was expected to enable the new government to spend more on social
programs. Then Finance Minister Hirchson proposed a budget cut of 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.
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 government
in the Knesset.
Peretz was defeated in the first round of the Labor Party leadership primary on
May 28, 2007. In the second round, on June 12, former Prime Minister and former
IDF Chief of Staff Ehud Barak bested former Shin Bet (Israeli Counterintelligence
and Internal Security Service) head Ami Ayalon to become party leader. Barak then
took over as Defense Minister, saying that he would serve until an election or until
someone other than Olmert forms a new government. Barak is not a Member of the
Knesset (MK) and must be elected to parliament in order to become Prime Minister.
He opposes withdrawing Labor from the government and forcing early elections,
tacitly recognizing that polls show Benjamin Netanyahu and his Likud Party likely
to place first in an election.10 Nonetheless, Barak has promised to end the coalition
partnership with Kadima after the final Winograd Commission report is published.
Some have suggested that since becoming Defense Minister, Barak is moving right,
toward most Israeli voters. He has asserted that Israeli forces should not leave the
10
Ha’aretz/Dialog Poll conducted August 4, 2007 showed Likud under Netanyahu in the
lead if an election were held that day. Yosi Verter, “Bloc Heads,” Ha’aretz, August 10,
2007, Open Source Center Document GMP20070810739005.
CRS-9
West Bank for at least five years or until the defense establishment has developed a
way to protect Israeli citizens from missiles of all capabilities. He also said that it is
not possible to reach an agreement on the main disputed issues of Jerusalem, border,
and refugees with Palestinian President Mahmud Abbas and Prime Minister Salam
Fayyad, whom he maintains cannot implement an accord anyway.11 However, Barak
has also said that Abbas and Fayyad must be bolstered and that a U.S.-planned
regional meeting this fall is “very important.”
At this time, Members of the Knesset 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.
On June 13, the Knesset elected Kadima candidate 83-year-old Shimon Peres
to be President of Israel. On July 4, Olmert made changes in his cabinet, naming
Haim Ramon Vice Premier to replace Peres, Roni Bar-On Finance Minister, and
Meir Shitrit Interior Minister, among other appointments. Ramon, who had stepped
down as Justice Minister when indicted in now-resolved criminal case (See Scandals,
above), and Bar-On are close associates of the Prime Minister.
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 member states. 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 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 2006, most economic indicators were positive: inflation low,
employment and wages rising, and the standard of living rising. U n d e r F o r m e r
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.
11
Shim’on Schiffer, “Baraq: No One to Talk To,” Yedi’ot Aharonot, August 10, 2007, Open
Source Center Document GMP20070810738009.
CRS-10
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%. If a budget
for the next year is not approved by December 31, the government may operate until
March 31 under the previous year’s budget. If a budget is not approved by March 31,
the government falls (unless the Knesset has already been dissolved and an election
is underway, as in 2006).
Olmert vowed not to increase the deficit while lessening the social gap. The
coalition agreement called 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.
Table 3. Basic Facts
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
7,150,000 (2007 est.)
1.18% (2006 est.)
— Jewish 80% (2007 est.)
— non-Jewish (mostly Arab) 20% (2007 est.)*
5% (2006 est.)
$26,200 (2006 est.)
1.9% (2006 est.)
8.5% (2006 est.)
91% (2006 est.)
$81.98 billion (June 2006 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 2007; and the Israeli government.
*Within 1967 borders.
Current Issues
Because the 2006 budget was not approved before the dissolution of the
previous parliament, spending remained at 2005 levels from January through May
and a budget surplus accrued due to the low expenditures and higher than expected
tax revenues. The surplus was expected to enable the new government to spend more
on social programs. Then Finance Minister Hirchson proposed a budget cut of 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.
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
CRS-11
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 with the war and its aftermath 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.9
On September 12, the cabinet approved the 2007 budget. 12
On January 29, 2007,
Hirchson 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. On June 28, the Governor of the Bank of Israel
Stanley Fischer warned that the economy would slow unless the budget were cut
The cabinet approved the 2008 budget on August 12.
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
9
Sharon Wrobel, “2006 GDP Growth Tops Forecasts,” Jerusalem Post, January 1, 2007,
citing the Israeli Central Bureau of Statistics’ preliminary figures.
CRS-11
revolution, revolution,
decreed that the elimination of Israel is a religious duty. President
Mahmud 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.” 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 Osirak in 1981. On
June 20, 2007, the House approved H.Con.Res. 21, calling on the U.N. Security
Council to charge Ahmadinejad with violating the Convention on the Prevention of
Genocide because of his calls for the destruction of the State of Israel. It has been
referred to the Senate Committee on Foreign Relations.
When U.S. Vice President Dick Cheney warned in 2005 that Israel might act
pre-emptively preemptively against Iran, Israel’s then Defense Minister Shaul Mofaz countered,
urging urging
a pre-emptive U.S. strike. Because Israel is presumed to have nuclear
weapons, the
prospect of a counterattack is seen by many as an effective 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.”10 On April 23, he stated, “our position has always been
that
12
Sharon Wrobel, “2006 GDP Growth Tops Forecasts,” Jerusalem Post, January 1, 2007,
citing the Israeli Central Bureau of Statistics’ preliminary figures.
CRS-12
elements.”13 On April 23, he stated, “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 struggle must be led
and managed by — first and
foremost — the U.S., Europe, and the U.N. institutions.
We are not ignoring our
need to take ... steps in order to be prepared for any
eventuality.”1114 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 2008-2010 and noted thatgenerally project a
2008-2010 time frame. U.S. assessments predictedpredict a 2010-2015 time frame.
He asserted, however, that Israel Israelis
believe that they must prepare for a possibly more imminent threat.12
On December 17,
2006, 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 technological
delays, then Iran would have 25 kilograms of enriched uranium by
2008 and nuclear
warheads by 2009-2010.13 In January 2007, Maj. Gen. Amos
Yadlin, head of military intelligence, also said that, barring delays, Iran would have
10
“PM Olmert, President Qatzav Discuss Iran, Peace Process During News Conference,”
Open Source Center Document FEA20060117017385, January 17, 2006.
11
“23 Apr Cabinet Session; Daily Says Olmert Readying for ‘Swift’ Convergence,” Open
Source Center, Document GMP20060424621005, Jerusalem Government Press Office,
April 23, 2006.
12
13
Ha’aretz report, May 24, 2006.
Sheera Claire Frenkel, “Dagan: Syria more Willing Now than Ever to Attack Israel,”
Jerusalem Post, December 18, 2006.
CRS-12
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-2009.1415
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.1516 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. U.S. Secretary of Defense Robert Gates told Minister of
Defense Peretz on April 19 that diplomatic pressure was working. Peretz, while
agreeing that diplomacy is preferable, noted that Israel could not remove other
options from the table and declared that Israel expected the United States and the
world to stand by it regarding the Iran nuclear issue 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. Israeli
Other Israeli officials have been echoingechoed that theme.
They also have expressed concern about the
ramifications of a military strike against
Iran on regional stability, possibly provoking
retaliation by Syria and Hezbollah as well as Teheran. After a June 7 strategic
dialogue meeting with U.S. officials, Minister Shaul Mofaz said that the two sides
would assess the effectiveness of sanctions at the end of 2007
well as Teheran.
Israel also is concerned about Iran’s support for anti-Israeli terrorist groups. Iran
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
13
“PM Olmert, President Qatzav Discuss Iran, Peace Process During News Conference,”
Open Source Center Document FEA20060117017385, January 17, 2006.
14
“23 Apr Cabinet Session; Daily Says Olmert Readying for ‘Swift’ Convergence,”
Jerusalem Government Press Office, Open Source Center, Document
GMP20060424621005, April 23, 2006.
15
Ha’aretz report, May 24, 2006, Sheera Claire Frenkel, “Dagan: Syria more Willing Now
than Ever to Attack Israel,” Jerusalem Post, December 18, 2006. and “Israeli MI Chief: Iran
to have Bomb in 2.5 Years,” Voice of Israel, January 9, 2007, Open Source Center,
Document GMP20070109739002.
16
Verbatim text of speech to the Herziliyya Conference, reported by IDF Radio, BBC
Monitoring Middle East, January 25, 2007.
CRS-13
the Popular Front for the Liberation of Palestine-General Command — Palestinian
terrorist groups seeking to obstruct the peace process and destroy Israel.
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 was widely reported, but not officially
confirmed,
that Olmert met Saudi National Security Advisor Prince Bandar in
September 2006,
and commentators opined that Iran was on their agenda.
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 the
Gaza Strip. Israel refused to deal with the late Palestinian leader Yasir Arafat
after after
Sharon came to power and during the intifadah or Palestinian uprising against
Israeli Israeli
occupation. Israel’s relations with the PA and its leaders improved somewhat
after 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
14
“Israeli MI Chief: Iran to have Bomb in 2.5 Years,” Voice of Israel, January 9, 2007, Open
Source Center, Document GMP20070109739002.
15
Verbatim text of speech to the Herziliyya Conference, reported by IDF Radio, BBC
Monitoring Middle East, January 25, 2007.
CRS-13
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 for 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 entering
Israel. Palestinians object to the barrier being built on their territory. The
barrier barrier,
which is 60% complete, is taking the form of a future border between Israel and
Palestine and will cut
cuts Palestinians off from East Jerusalem 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
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 settlement
activity in the first phase.) Abbas preferred to include terrorist groups
such as Hamas
in the political system and refused to disarm them prior to January
2006 parliamentary
elections. Hamas’s victory in those elections created policy
dilemmas for Abbas,
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 refusesrefused to negotiate with Hamas for the return of the Israeli
soldier kidnaped on June 25, 2006. After the kidnaping, in summer 2006, Israel
CRS-14
arrested many members of the Hamas-led PA government and legislature for
participating in a terrorist group, and Israeli forces 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 prisoner exchange. Analysts
believe that this effort is complicated by the need 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.
On March 18, 2007, the Israeli cabinet voted to shun the new Palestinian unity
government, a coalition of Hamas, Fatah, and independents, until it meets
international met international
demands to disavow violence, recognize Israel, and accept prior IsraeliPalestinian Israeli-Palestinian
agreements. Prime Minister Olmert said that he would continue to meet
with with
President Abbas to discuss humanitarian and security issues. After Hamas took
control of Gaza in June, Olmert said that he would deal with the new PA government
appointed by Abbas to replace Hamas but not cooperate with Hamas in Gaza. On
July 1, Israel transferred to the PA $118 million of the tax revenues it had withheld
since Hamas came to power in 2006, resumed security cooperation with the PA, and
CRS-14
is considering the release of 250 Fatah-affiliated prisoners. The remainder of the
revenues or an additional $600 million will be transferred within six months. Olmert
and Abbas have been meeting somewhat regularly in summer 2007, and are working
on an “agreement” on principles to present to a U.S.-planned regional conference to
be held in November in Washington in support of negotiations for creation of a
Palestinian state.
Egypt.17
Egypt.16 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 although
Egypt withdrew its ambassador during the four years of the second
intifadah, 2001-200520012005, 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 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
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. After the
January January
2006 Hamas election victory in the Palestinian territories, Egyptian officials
unsuccessfully urged the group to accept the 2002 Arab Peace Initiative that offers
Israel recognition within its 1967 borders. Egyptian intelligence chief Omar
Sulayman has Sulayman
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. After Hamas took over
the Gaza Strip, Egypt worked with Israel to close the Rafah crossing at the GazaEgypt border and moved its representative to the PA to the West Bank.
17
See also, CRS Report RL33003, Egypt: Background and U.S. Relations, by Jeremy M.
Sharp.
CRS-15
Egypt deployed 750 border guards to secure the Gaza-Egyptian border (Rafah)
Rafah crossing after Israel’s
disengagement from Gaza. Israel refused an Egyptian request to deploy
military military
border guards, instead of police, for greater control of smuggling along the
entire entire
border in Sinai, which some Israelis argue would require a change in the
military military
appendix of the 1979 peace treaty. Israeli officials have repeatedly
expressed expressed
frustration 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 part
of the U.S.-Israeli Free Trade Agreement (FTA). As a result of the QIZ, Israeli
exports to Egypt have 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. An initial agreement for the deal was
signed on December 11, 2006. In April 2007, Israel’s National Planning and
16
See also, CRS Report RL33003, Egypt: Background and U.S. Relations, by Jeremy M.
Sharp.
CRS-15
Building 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.1718 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 creating
13 qualified industrial zones (QIZs) to export jointly produced goods to the
United 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
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 wants
the Roadmap to be implemented, and has hosted meetings between Israeli and
Palestinian leaders. 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. He is one of the strongest
proponents 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 Palestinian
refugee issue, which the Arab League reaffirmed in March 2007.
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-16
After Hamas took over Gaza in June 2007, speculation revived concerning a
possible union between Jordan and the West Bank, which some in Israel have long
suggested as the ideal solution. On July 1, King Abdullah firmly rejected the idea, “I
say clearly that the idea of confederation or federation, or what is called administrative
responsibility, is a conspiracy against the Palestinian cause, and Jordan will not
involve itself in it.... The Jordanians refuse any settlement of the Palestinian issue at
their expense.”19 In 1988, the King’s father had disengaged Jordan from the West
Bank and accepted the Palestine Liberation Organization (PLO) as the sole body
responsible for Palestinian areas.
Syria. Israel and Syria have fought several wars and, 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 unconditional peace talks
with with
Israel. Israeli officials demand that he first cease supporting the Lebanese
Hezbollah Hezbollah
militia, expel Palestinian rejectionist groups (i.e., those who reject an
Israeli-Palestinian IsraeliPalestinian peace process), and cut ties with Iran.
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 said that Israel was not interested in the fall of the regime,
only in changing its policies. Some reportedly fear that anarchy or extreme Islamist
elements might follow Asad and prefer him to stay in power in a weakened state. On
December 1, 2005, former Prime Minister Sharon said that nothing should be done
to to
ease U.S. and French pressure on Syria, implying that Syrian-Israeli peace talks
would do that.
17
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, Alfred Prados, and Jeremy Sharp.
CRS-16 would
do that.
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 Israeli
forces and kidnaping of an Israeli soldier, Israeli officials specifically
requested the
United States to pressure President Asad to expel Mish’al, whom they
believed was
responsible for the operation. Syria refused. When Hezbollah abducted two Israeli
soldiers from northern Israel on July 12, sparking an 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 demanded
that Syria exert its influence on Hezbollah to end the conflict; Syrian
officials officials
unsuccessfully sought a broader resolution that would include a revival of
a peace
process to produce the return of the Golan Heights.
After the war inIn 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.”1820 He also has indicated that
he prefers he preferred not to differ with the
19
July 1 interview with Al Ghad newspaper, cited in Hassan M. Fattah, “Growing Talk of
Jordanian Role in Palestinian Affairs,” New York Times, July 10, 2007.
20
“Olmert Tells Israeli Paper: Golan ‘An Integral Part of the State of Israel’,” Yedi’ot
(continued...)
CRS-17
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. In 2007, Israeli
intelligence agencies and, foreign ministry, and
others have debated whether Syria wants
peace or just a peace process, and whether
it would start a war to break the status quo.
Prime Minister Olmert appears to
support Mossad’sthe conclusion that Asad wants negotiations
only to end his
international isolation.
Lebanon.19 international isolation. In summer 2007, amid speculation that
miscalculation could produce an unwanted war, Israeli and Syrian leaders have
exchanged messages stating their lack of interest in a confrontation and desire for
peace.
Lebanon.21 Israeli forces invaded Lebanon in 1982 to prevent Palestinian
attacks on northern Israel. The forces gradually withdrew to a self-declared nine-mile
“security zone,” north of the Israeli border. Peace talks in the 1990’s failed to
produce 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 where the borders of
Lebanon, Syria, and Israel
meet. The U.N. determined, 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.
Hezbollah’s kidnaping of two Israeli soldiers on July 12, 2006, provoked Israel
to launch a war against Hezbollah in Lebanon. On July 17, Prime Minister Olmert
declared that military operations would end with the return of the kidnaped soldiers,
18
“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.
19
See also CRS Report RL33509, Lebanon; and CRS Report RL31078, The Shib’a Farms
Dispute and Its Implications, both by Alfred Prados.
CRS-17
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 demanded a prisoner swap, 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 has not released the abducted soldiers.2022
The U.N. reports that Hezbollah is rearming via smuggling across the LebaneseSyrian border.Lebanese-Syrian
border.
20
(...continued)
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-18
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
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.2123
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 boost
organizations such as Hezbollah and Hamas, so that we don’t face a new
eastern front
from Iran to Kfar Saba.”2224 The late Israeli commentator Ze’ev Schiff suggested
that that
if Arabs interpret America’s withdrawal as a sign of defeat, then Israel could
look look
forward to a radical Arab shift that will strengthen the extremists around us.23
extremists.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.2426 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
20
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.
21
For text of speech, see [http://www.pmo.gov.il/PMOEng/Communication/PMSpeaks/
speechaipac130307.htm].
22
Interview by Tal Schneider, Ma’ariv, April 27, 2007, Open Source Center Document
GMP20070427754006.
23
Ze’ev Schiff, “US Withdrawal in Iraq to Strengthen Arab Extremists Around Israel,”
Ha’aretz, April 20, 2007.
24
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
Pakistani officials have asserted that they will not recognize Israel until an
independent Palestinian state is established. On September 14, Pakistan’s President
Pervez Musharraf shook Prime Minister Sharon’s hand in a “chance” meeting at the
U.N. General Assembly opening session. In October, Pakistan accepted Israeli
humanitarian aid after a devastating earthquake. In April 2007, Musharraf offered
to to
mediate between Israel and the Palestinians and said that he would be willing to
visit visit
Israel to help bring peace to the Middle East. Prime Minister Olmert declined
the 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.
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-19
Tunisian President Zine El Abidine Ben Ali sent a personal letter to Sharon,
praising his “courageous” withdrawal from Gaza. Shalom attended the World
Summit 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 with
10 Arab and Muslim foreign ministers, including the Omani foreign minister.
On 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 in Indonesia in
May 2007 but did not attend because of security required due to her position as
Acting 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,
as as
well as with Tajikistan, which seemsseeks to tap Israel’s technological expertise.
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 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 the
Roadmap process. They observed with concern Israel’s ongoing settlement
activity 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
CRS-19
November 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. The
mission suspended operations on June 13, 2007, as Hamas took over
Gaza. 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 in
December 2004 in order to oversee EU-funded local projects. The EU also
authorized 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
CRS-20
accords. The EU developed, at the Quartet’s request, a
temporary international
mechanism to aid the Palestinian people directly while
bypassing the government.
The EU does not include Hezbollah on its list of terrorist organizations as Israel
demands. Israel has protested meetings between European ambassadors and
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.2527
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;
memoranda of
understanding; economic, scientific, military agreements; and trade.
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
25
See CRS Report RL31956, European Views and Policies Toward the Middle East, by
Kristin Archick.
CRS-20
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 at
Camp David in 2000 that failed to reach a peace settlement, and sought
unsuccessfully unsuccessfully
to mediate between Israel and Syria during the same year.
In June 2002, President George W. Bush outlined his vision of a democratic
Palestine to be created alongside Israel in a three-year process.2628 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
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.
CRS-21
Conflict. The Administration remains committed to the Roadmap process despite the
parties’ failure to implement it.2729
Secretary of State Condoleezza Rice has not named a Special Middle East
Envoy 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, afterH.Res. 143,
introduced on April 12, 2007, urges the President to appoint a Special Envoy for
Middle East Peace. S.Res. 224, introduced on June 7, has a similar provision.
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.
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 later agreed with Israel’s preconditions
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.”28 He later emphasized that it was a subject for
negotiations between the parties.
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.
26
See [http://www.whitehouse.gov/news/releases/2002/06/20020624-3.html] for text of
President’s speech.
27
28
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-21
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. In 1995, Congress mandated
that the embassy be moved to Jerusalem,29
accelerate the Roadmap.
President Bush has called for an “international meeting this fall of representatives
from nations that support a two-state solution, reject violence, recognize Israel’s right
to exist, and commit to all previous agreements between the parties.” The meeting
will review progress toward building Palestinian institutions and look for ways to
support further reform. Participants also will provide support for the parties in their
bilateral negotiations on a Palestinian state. Secretary Rice will chair the meeting. The
meeting reportedly will take place in Washington in November.30
Settlements. 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.”31 He later emphasized that it was a
subject for negotiations between the parties.
Jerusalem. 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
29
30
See [http://www.state.gov/r/pa/prs/ps/2003/20062.htm]for text of Roadmap.
For President’s speech,
/2007/07/20070716-7.html].
31
see
[http://www.whitehouse.gov/news/releases
For text of Bush letter to Sharon, see [http://www.whitehouse.gov].
CRS-22
unresolved by keeping the U.S. Embassy in Tel Aviv. In 1995, Congress mandated
that the embassy be moved to Jerusalem,32 but a series of presidential waivers of
penalties for non-compliance have delayed the move. U.S. legislation has 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, 2005.3033 The
Senate did not pass an authorization bill, and it did not become law.3134 H.R. 895,
introduced on February 7, 2007, would reaffirm Congress’s prior steps toward
recognizing Jerusalem as the capital of Israeli.
Syrian Talks. 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
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
relations with terrorists and Iran. Yet, some in the Israeli coalition, Knesset, and press want
want their government to engage Damascus in peace talks in order to remove it from an
an alliance with Teheran that enhances the Iranian threat to the Jewish State.
Democratization Policy. 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.3235
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’
29
P.L. 109-102, November 14, 2005.
30 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 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.
32
P.L. 109-102, November 14, 2005.
33
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
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.
3134
In August 2006, El Salvador notified the Israeli Foreign Ministry that it was moving its
embassy from Jerusalem to Tel Aviv. With that move, no country that has diplomatic
relations with Israel will have an embassy in Jerusalem.
3235
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-22
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
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.23
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.
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 2008 through 2014 to fund joint ventures between
U.S.
and Israeli businesses and academics for research, development, or
commercialization commercialization
of alternative energy, improved energy efficiency, or renewable
energy sources.
Aid. Israel was the largest recipient of U.S. foreign aid 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 received
an an
extra $1.2 billion to fund implementation of the Wye agreement (part of the
Israeli-Palestinian IsraeliPalestinian peace process) in FY2000, $200 million in anti-terror assistance
in in
FY2002, and $1 billion in FMF in the supplemental appropriations bill for
FY2003.
H.R. 5522, the Foreign Operations Appropriations bill, FY2007, passed in the
House on June 9, 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 spent
for defense acquisitions in Israel) for Israel. The Senate did not pass a bill.
Foreign Foreign
Operations programs for FY2007 are operating under the terms of a
continuing continuing
appropriations resolution (H.R. 5631/P.L. 109-289, as amended) which
provides provides
funding at the FY2006 level or the House-passed FY2007 level, whichever
is less; for Israel, it is the House FY2007 bill. H.R. 2764, the Foreign Operations
Israel, it is the House FY2007 bill. Israel also received $240,000 in Non-proliferation,
Anti-terrorism, Demining and Related programs (NADR) funds for FY2007. For
FY2008, the Administration requested 2.4 billion in FMF and $500,000 in
International Narcotics Control and Law Enforcement (INCLE) funds for Israel. H.R.
2764, the Foreign Operations Appropriations bill, FY2008, passed in the House on
June 22, 2007, provides $2.4
billion in FMF for Israel, of which $631.2 million may be spent
in Israel, and $40
million for refugee assistance.
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 it
was reported that the Administration was expediting the delivery of precisionguided precision-guided
bombs that had been ordered by Israel in 2005.
CRS-23
After meeting Prime Minister Olmert at the White House on June 19, 2007,
President Bush said that a new 10-year aid agreement would be signed to ensure that
Israel retains a “qualitative military edge.” The President also directed Secretary of
Defense Robert Gates to expedite approval of IDF procurement requests in order to
replenish arms and materiel used during the 2006 war against Hezbollah in Lebanon.
Congress has legislated other special provisions regarding aid to Israel. Since
the the
1980s, ESF and FMF have been provided as all grant cash transfers, not
designated designated
CRS-24
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 about onequarter of the military aid for the procurement in Israel of defense articles
and 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 (for commercial loans) over three years. As
of of
September 2006, $4.5 billion of the guarantees waswere unexpended.3336 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 nowithout a treaty obligation, President Bush has said several times that the
United United
States would defend Israel militarily in the event of an attack.3437
On November 30, 1981, U.S. Secretary of Defense Caspar Weinberger and
Israeli 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 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
in Israel. In 2001, an
annual interagency strategic dialogue, including representatives
of diplomatic,
defense, and intelligence establishments, was created to discuss longtermlong-term issues.
In 2003, reportedly at the U.S. initiative due to bilateral tensions related to
Israeli Israeli
arms sales to China, the strategic dialogue was suspended. (See Military
Sales,
below.) After the issue was resolved, the talks resumed at the State Department
on on
November 28, 2005. On January 21, 2007, Under Secretary of State 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 saidreported that the Americans want to
wanted 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
33
3436
37
See also CRS Report RL33222, U.S. Foreign Aid to Israel, by Jeremy Sharp.
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.
CRS-2425
include satellite-guided munitions, was needed to counter the Iranian threat and
would would
not threaten Israel’s military superiority.3538
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. 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.
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. On May 17,
2007, the House passed H.R. 1585, the Defense Authorization Act for FY2008,
fullingauthorizing full funding of the Administration’s request of $73.5 million for the
Arrow and $7
million for the joint SRBMD, known as “David’s Sling.” The House also approved
an amendment to provide an additional $25 million to complete accelerated coproduction of Arrow missiles, $45 million to continue joint development of David’s
Sec. 228 of
the bill requires the Secretary of Defense to expand the U.S. ballistic missile defense
system “to better integrate with the defenses of Israel to provide robust, layered
protection against ballistic missile attack.” It provides an additional $25 million to
complete accelerated co-production of Arrow missiles, $45million to continue joint
development of David’s Sling, and $135 million to begin acquisition of a Thermal
High Altitude Area
Defense (THAAD) fire unit in order to provide Israel with a
follow-on missile
defense system of greater performance than the Arrow.
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 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 and
its Istanbul Cooperative Initiative. 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. On February 7,
2007, Amir Peretz became the first Israeli defense minister to visit NATO
headquarters in Brussels. In June, as part of the ICP, Israel agreed to joint military
training and exercises with NATO to enhance interoperability, potentially leading to
Israeli participation in NATO-led missions. H.Res. 235, introduced and referred to
the the
Committee on Foreign Affairs on March 9, 2007, states that Israel is deserving
of of
NATO membership and supports upgrading Israel’s relationship with NATO to
that of a leading member of the Mediterranean Dialogue and member of the
Partnership for Peace.
35 that
38
David S. Cloud and Jennifer Medina, “Gates Assures Israel on Plan to Sell Arms to
Saudis,” New York Times, April 20, 2007.
CRS-2526
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 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.3639 On June 28,
the Senate
Appropriations Committee approved its version of H.R. 2764, the Foreign
Operations Operations
Appropriations bill, FY2008, including a clause restricting Israel’s ability
to use U.S.
military aid for cluster bombs unless they have a failure rate of one
1 percent or less and
would be used only against clearly defined military targets and no
where civilians are
known to be present.
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.3740 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 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
36
39
David S. Cloud and Greg Myre, “Israel May Have Violated Arms Pact, U.S. Officials
Say,” New York Times, January 28, 2007.
3740
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.
CRS-2627
months additional steps will be taken to restore confidence fully.”3841 According to the
Israeli newspaper Ha’aretz, Israel will continue to voluntarily adhere to the
Wassenaar 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
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 basisby-case basis. On July 17, 2007, the Knesset passed a Law on Control of
Defense Exports, new regulations that establish a new authority in the Defense
Ministry to oversee defense exports and involve the Foreign Ministry for the first time
in the process among other provisions.
On October 21, 2005, it was reported that Israel would freeze or cancel a deal
to 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 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
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 no
formal request for clemency is pending.3942 Pollard’s Mossad handler Rafi Eitan,
now 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 Israeli
Embassy in Washington, as the diplomat. Gil’on has not been accused of
wrongdoing 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 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
38
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.
3942
See CRS Report RS20001, Jonathan Pollard: Background and Considerations for
Presidential Clemency, by Richard Best and Clyde Mark.
CRS-2728
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 that
those who wrongly disclosed the information knew that disclosure could harm
the the
nation. A trial may begin in May 2007date has not been set.
Intellectual Property Protection. The “Special 301” provisions of the
Trade Trade
Act of 1974, as amended, require the U.S. Trade Representative (USTR) to
identify 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 persistent piracy
affecting of U.S.
copyrights. In 2006, 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.40 43
According to Deputy Secretary of Commerce David Sampson, the U.S.
government 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.41 In
44 In April 2007, the
USTR again kept Israel on the Priority Watch List because “Israel
appears to have left
unchanged the intellectual property regime that results in
inadequate protection against
unfair commercial use of date generated to obtain
marketing approval.” On May 2,
the Israeli Ministry of Industry, Trade and
Commerce responded that Israel had
“complied completely in all areas that had been
deemed lacking in the past.”
U.S. Interest Groups
Groups actively interested in Israel and the peace process 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]
4043
For U.S. government explanation of Israel’s listing on the Priority Watch List, see Full
Version of the 2006 Special 301 Report, April 28, 2006, accessible at [http://www.ustr.gov]
4144
Ora Coren, “U.S. Worried about Israel’s Intellectual Property Laws,” Ha’aretz, February
1, 2007.
CRS-2829
[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/]
Figure 1. Map of Israel
crsphpgw