Israel: Major Issues and U.S. Relations

Congressional Research Service

Contents

Overview and Major Issues for Congress ....................................................................................... 1 Regional Conflict Summary: Hamas, Lebanese Hezbollah, and Iran ............................................. 2

Hamas, Gaza War, and Broader Regional Conflict ................................................................... 2 Israel-Hezbollah Conflict and Cease-Fire ................................................................................. 3 Direct Israel-Iran Conflict ......................................................................................................... 6

U.S.-Israel Security Cooperation, Tensions, and Congressional Oversight .................................. 10 Israeli Domestic Issues .................................................................................................................. 13

Ultra-Nationalist Influence in the Government ....................................................................... 14

Netanyahu’s Status and the Possibility of Early Elections ...................................................... 15

Israeli-Palestinian Issues ............................................................................................................... 17

Israel-Hamas Conflict and Gaza ............................................................................................. 17 West Bank and Palestinian Authority ...................................................................................... 22

Violence, Settlements, and U.S. Responses (Including Sanctions) ................................... 23

PA Strength and Viability: West Bank, Gaza, and Potential Statehood ............................ 27

Incoming Administration and Congress .................................................................................. 30

Figures

Figure 1. Lebanese Area Subject to November 2024 Cease-Fire .................................................... 5

Figure 2. Reported Iranian Strikes on Israel .................................................................................... 7

Figure 3. Reported Israeli Strikes on Iran ....................................................................................... 7

Tables

Table 1. Israeli Government: Key Positions .................................................................................. 13

Appendixes

Appendix A. Israel: Map and Basic Facts ..................................................................................... 33 Appendix B. Main Israeli Parties and Their Leaders .................................................................... 34

Contacts

Author Information ........................................................................................................................ 36

Israel: Major Issues and U.S. Relations

Congressional Research Service 1

Overview and Major Issues for Congress

Israel (see Appendix A for a map and basic facts) has forged close bilateral cooperation with the United States in many areas. For more background, see CRS Report RL33222, U.S. Foreign Aid to Israel, by Jeremy M. Sharp, and archived CRS Report RL33476, Israel: Background and U.S. Relations, by Jim Zanotti.

This report discusses additional matters with significant implications for U.S.-Israel relations and congressional oversight and action, including

• a summary of regional conflict between Israel and (a) the Palestinian Sunni Islamist group Hamas (a U.S.-designated foreign terrorist organization, or FTO), (b) the Lebanese Shia group Hezbollah (another FTO, which agreed to a November cease-fire with Israel), and (c) Iran;

• U.S.-Israel security cooperation, tensions, and congressional oversight;

• domestic Israeli issues; and

• Israeli-Palestinian issues, including additional detail regarding the Israel-Hamas conflict and Gaza, Israel-Palestinian Authority (PA) tensions and West Bank issues, and the incoming Administration and Congress.

The incoming Administration and Congress could significantly affect many of the issues pertinent to U.S.-Israel relations. Whether or not President-elect Donald Trump’s policies would resemble those from his 2017-2021 term, considerations for Congress could include the following:

• How U.S. officials and lawmakers might consider using aid, arms sales, sanctions and other trade policy options, military force, and diplomacy to address various aspects of relations with Israel, including future long-term military aid arrangements.

• Under what circumstances Israel’s conflicts with Iran or Iran-supported actors might intensify or diminish, and how the affected parties will manage continued conflict or transitions to post-conflict scenarios.

• How Israel might pursue efforts to weaken Iran’s nuclear program and regional influence, what Iran’s responses could be, and the overall effect on regional security.

• How the Administration and Congress might approach security and governance in Gaza and the West Bank, the role of the Palestinian Authority, the potential for Israeli settlement expansion or annexation in the West Bank, and possible negotiations aimed at resolving aspects of Israeli-Palestinian conflict.

• Whether and under what circumstances Israel can widen and deepen its regional relationships with Arab states, including Saudi Arabia, and how U.S. interactions with Israel and other regional actors may affect general stability, arms proliferation, counterterrorism, global commerce, and the roles of Russia and the People’s Republic of China (PRC).

Israel: Major Issues and U.S. Relations

Congressional Research Service 2

Regional Conflict Summary: Hamas, Lebanese Hezbollah, and Iran

Hamas, Gaza War, and Broader Regional Conflict

Since October 7, 2023, Israel has been at war with the Palestinian Sunni Islamist group Hamas (a U.S.-designated foreign terrorist organization, or FTO), which led attacks on that day from the Gaza Strip into Israel. The ongoing conflict has presented several challenges for U.S. policy in the Middle East. These may include how to bolster Israel’s security from threats posed by Iran- supported actors near its borders, how to prevent the spread of conflict in the region and help manage relationships among Israel and its neighbors, how to provide security assistance for Israel without endangering civilians, how to provide humanitarian aid for civilians displaced or otherwise affected by the fighting, how to help Israel and Hamas reach a cease-fire agreement that secures the return of hostages (including U.S. citizens) from Gaza, and how to reconcile Palestinian desires for statehood and post-conflict recovery with Israeli security priorities and political objectives.

In the year since October 7, Iran and various Iran-backed groups in the region have targeted Israel, U.S. forces, and/or commercial shipping while expressing solidarity with Hamas. Additional CRS products address various conflicts ensuing between Israel (with some help from the United States, other Western partners, and some Arab states) and Iran and its allies in Lebanon, Yemen, Syria, and Iraq (the self-proclaimed “axis of resistance”).¹

At an event commemorating the one-year anniversary of the October 7 attacks, U.S. National Security Advisor Jake Sullivan addressed some operational successes Israel has had—particularly since summer 2024—in countering Iran and its allies:

Backed by the ironclad security partnership of the United States, Israel has demonstrated its remarkable capacity, including through impressive operations that killed terrorists with Israeli and, yes, with American blood on their hands.

The challenge going forward is to turn tactical wins in battle into a strategy that secures Israel’s people and its future.²

Addressing Israel’s Knesset in late October, Israeli Prime Minister Benjamin Netanyahu said, “Our long-term strategy is to dismantle the axis of evil, to cut off its arms in the south and in the north, to exact a heavy price from Iran and its proxies and to prevent Iran from having nuclear weapons.”³

1 CRS In Focus IF12587, Iran-Supported Groups in the Middle East and U.S. Policy, by Clayton Thomas; CRS In Focus IF12770, Israel and Lebanese Hezbollah: Conflict and Escalation, by Jim Zanotti and Clayton Thomas; CRS In Focus IF12581, Yemen: Conflict, Red Sea Attacks, and U.S. Policy, by Christopher M. Blanchard; CRS Insight IN12309, Iraq: Attacks and U.S. Strikes Reopen Discussion of U.S. Military Presence, by Christopher M. Blanchard; and CRS In Focus IF11930, Syria and U.S. Policy, by Christopher M. Blanchard.

2 White House, “Remarks by APNSA Jake Sullivan on the Anniversary of the October 7th Attacks,” October 7, 2024.

3 Lazar Berman, “Netanyahu says Israel’s Iran strike destroyed ‘industrial factories of death,’ says he plans further peace deals with Arab states,” Times of Israel, October 28, 2024.

Israel: Major Issues and U.S. Relations

Congressional Research Service 3

Israel-Hezbollah Conflict and Cease-Fire⁴

For decades, Hezbollah has been Iran’s closest and most powerful nonstate ally in the region. During that time, Hezbollah’s forces and Israel’s military have sporadically clashed near the Lebanese border—with the antagonism at times contained in the border area, and at times escalating into broader conflict—most notably in a 34-day war in 2006, and again after Hezbollah began firing at Israel after the Hamas-led attacks of October 7, 2023.⁵ Hezbollah also has reportedly provided support to many other Iran-supported groups, including Hamas, and has played a pivotal role in assisting Syria’s regime during its civil war.⁶ In the months after October 2023, domestic pressure mounted for Israeli leaders to take action against Hezbollah that would allow for some 60,000 people evacuated from northern Israel—partly due to concerns about a possible October 7-style attack from Lebanon—to return to their homes.

September-November 2024 conflict. Israel escalated its operations against Hezbollah in September 2024. After a series of electronic device explosions generally attributed to Israel, Israeli airstrikes targeted hundreds of Hezbollah leadership and military targets, killing Hezbollah Secretary-General Hassan Nasrallah and other senior leaders. Nasrallah had led Hezbollah for 32 years, and had become one of the most prominent leaders in the Middle East in helping the group acquire significant military and political power in Lebanon while supporting Iran. Another Israeli strike in Beirut on October 4 killed Nasrallah’s potential successor Hashem Safieddine.⁷ On October 29, Hezbollah named Naim Qassem, who had been the deputy for Nasrallah and Nasrallah’s predecessor for 34 years, as its new secretary-general.⁸

In October, Israel’s military began operations it described as “limited, localized, and targeted ground raids” into southern Lebanon against Hezbollah, with air and artillery support.⁹ While supporting the dismantling of Hezbollah “attack infrastructure,” U.S. officials reportedly urged Israel to avoid a major ground invasion, and warned that—as with previous Israeli operations in Lebanon in 1982 and 2006—conflict could become deadlier and more protracted than Israel anticipated.¹⁰

Over the ensuing weeks, Israel continued strikes in Lebanon and cleared a line of Lebanese villages adjacent to the Israeli-Lebanese border, many of which contained Hezbollah military infrastructure. Meanwhile, Hezbollah regularly fired projectiles into northern and central Israel, appearing to retain some residual capacity to threaten strategic sites or population centers,

4 For more information, see CRS In Focus IF12770, Israel and Lebanese Hezbollah: Conflict and Escalation, by Jim Zanotti and Clayton Thomas.

5 CRS Report R47321, Iran: Background and U.S. Policy, by Clayton Thomas; CRS Report R44759, Lebanon: Background and U.S. Relations; CRS In Focus IF10703, Lebanese Hezbollah. See also “Long history of warfare on Israel-Lebanon border,” Reuters, June 7, 2024.

6 Sune Engel Rasmussen et al., “Iran’s ‘Axis of Resistance’ Faces Moment of Truth After Attacks on Israel, U.S. Base,” Wall Street Journal, January 30, 2024; Matthew Levitt, Hezbollah’s Regional Activities in Support of Iran’s Proxy Networks, Middle East Institute, July 2021.

7 “Hezbollah confirms death of Nasrallah’s heir apparent,” BBC News, October 23, 2024.

8 Lior Ben Ari, “From school teacher to international terrorist - Meet Hezbollah’s new chief,” Ynetnews, October 29, 2024.

9 Doha Madani, “Israel launches invasion into southern Lebanon targeting Hezbollah,” NBC News, October 1, 2024; “Israel begins ground offensive in Lebanon,” NPR, October 1, 2024.

10 Barak Ravid, “Past wars loom over Israel’s ground operation in Lebanon,” Axios, October 1, 2024; Department of Defense, “Readout of Secretary of Defense Lloyd J. Austin III’s Call with Israeli Minister of Defense Yoav Gallant,” September 30, 2024; Julian E. Barnes and Michael Crowley, “U.S. Officials Believe Israel Will Not Conduct Full Invasion of Lebanon,” New York Times, September 30, 2024.

Israel: Major Issues and U.S. Relations

Congressional Research Service 4

including with precision-guided missiles or drones.¹¹ In October, two drone strikes—targeting sites nearly halfway between Haifa and Tel Aviv—hit one of Prime Minister Netanyahu’s residences and killed four Israeli soldiers (while wounding more than 60) at a military base dining hall.¹²

International organizations estimate that nearly 900,000 people in Lebanon (out of a total population of some 5.7 million) were internally displaced during the conflict, and more than 550,000 (many of whom were refugees from Syria) crossed into Syria.¹³ Reportedly, since October 2023, more than 3,700 people in Lebanon have been killed, along with more than 100 in or from Israel.¹⁴

Reports suggest that since September 2024, Israel may have destroyed much of Hezbollah’s rocket and missile arsenal, which was estimated to constitute 120,000-200,000 projectiles earlier in the year.¹⁵ In October, then-Defense Minister Yoav Gallant said, “I estimate the remaining capacity of the missiles and rockets to be on the order of 20% [of the previous arsenal], and also it is not organized in the way that it used to be, in a way that [Hezbollah] could fire [major] volleys.”¹⁶ The group has reportedly lost hundreds of fighters and most of its senior leaders over the past year in Israeli operations, and may have been infiltrated by Israeli intelligence.¹⁷

November cease-fire. By November, Hezbollah Secretary-General Qassem appeared to signal willingness to drop Hezbollah’s previous condition that “any truce with Israel be preceded by an end to the Gaza conflict.”¹⁸ Within this context, U.S. officials sought to broker a cease-fire deal aimed at fully implementing UN Security Council Resolution 1701 (adopted at the end of the 2006 war but largely unimplemented).

On November 26, Israel and Lebanon approved a cease-fire, effective starting November 27. According to President Joe Biden, the agreement is “designed to be a permanent cessation of hostilities.”¹⁹ Hezbollah is not a party to the agreement but has reportedly liaised with Lebanese officials during negotiations and acceded to its terms. In the first 60 days, the deal calls for (1) Israel to withdraw from Lebanese territory, (2) Hezbollah fighters and arsenals to move north of the Litani River (about 20 miles north of the Israeli border in most places—see Figure 1), and (3) the Lebanese Armed Forces (LAF) to move in to patrol this area, assisted by other Lebanese security forces and the UN Interim Force in Lebanon (UNIFIL).²⁰ President Biden said “civilians

11 Nicholas Blanford, “Israel versus Hezbollah: Not a full-scale war—yet,” Atlantic Council, October 22, 2024; Agnes Helou, “Experts see Hezbollah ‘escalation’ in use of new missiles, as group weathers Israeli bombardment,” Breaking Defense, October 8, 2024.

12 Blanford, “Israel versus Hezbollah: Not a full-scale war—yet.”

13 United Nations Office for the Coordination of Humanitarian Affairs (UN-OCHA), “Lebanon: Flash Update #46 - Escalation of hostilities in Lebanon, as of 21 November 2024,” November 23, 2024. One Lebanese government official estimated that 1.3 million people had been “uprooted from their homes and sheltering in public buildings or with relatives.” “Lebanon needs $250 million a month for displaced, minister says ahead of Paris summit,” Reuters, October 23, 2024.

14 “Costs of Israel-Hezbollah conflict on Lebanon, Israel,” Reuters, November 26, 2024.

15 Seth G. Jones et al., The Coming Conflict with Hezbollah, Center for Strategic and International Studies, March 21, 2024.

16 Yaakov Lappin, “Assessing Hezbollah’s Severely Depleted Stockpile,” Jewish News Syndicate, November 22, 2024.

17 “Nasrallah’s killing reveals depth of Israel’s penetration of Hezbollah,” Reuters, September 29, 2024.

18 “New Hezbollah Leader Faces Crucial Ceasefire Decisions,” Soufan Center, November 4, 2024.

19 White House, “Remarks by President Biden Announcing Cessation of Hostilities Between Israel and Hezbollah,” November 26, 2024.

20 A reported copy of the agreement’s text is available at https://www.thenationalnews.com/news/mena/2024/11/27/ revealed-full-text-of-the-israel-hezbollah-ceasefire-agreement/.

Israel: Major Issues and U.S. Relations

Congressional Research Service 6

the LAF’s ability to counter Hezbollah,²⁴ President Biden said, “If Hezbollah or anyone else breaks the deal and poses a direct threat to Israel, then Israel retains the right to self-defense consistent with international law.” According to an Israeli media report, a U.S. “side letter” to Israel will provide that²⁵

• Israel’s military can act under certain circumstances in response to breaches of the agreement, after notifying the United States “wherever possible.” Israel will have broader latitude to respond to threats in southern Lebanon, and can act elsewhere in Lebanon only if the LAF is unable or unwilling to do so.

• U.S. officials will share intelligence with Israel regarding possible violations of the deal, including Hezbollah infiltration of the LAF.

• Israel can conduct sub-sonic reconnaissance flights over Lebanon.

Direct Israel-Iran Conflict

October round of attacks. In April and again in October 2024, Iran and Israel exchanged attacks (see Figure 2 and Figure 3 for information on the October exchange). While the Biden Administration has repeatedly supported Israel’s right to self-defense, it also has sought to de- escalate tensions.²⁶ Beyond the parties themselves, Israel-Iran escalation could have wide-ranging implications for a host of issues, including energy markets, nuclear proliferation, and U.S. global force posture. After Israel’s October 26 retaliation to Iran’s October 1 attack, a senior U.S. official said that this round of direct Israel-Iran fire should be complete, but that U.S. forces were ready to help in Israel’s defense if Iran responds.²⁷

24 Omar Abdel-Baqui and Adam Chamseddine, “Lebanon’s Military Can Barely Fight—Even After $3 Billion From the U.S.,” Wall Street Journal, October 31, 2024.

25 “Report: US ‘side letter’ to Israel pledges to share intelligence on Hezbollah activity after ceasefire, cooperate against Iranian threat,” Times of Israel, November 27, 2024.

26 Department of Defense, “Readout of Secretary of Defense Lloyd J. Austin III’s Call with Israeli Minister of Defense Yoav Gallant,” October 26, 2024.

27 White House, “Background Press Call on Israel’s Targeted Strikes Against Military Targets in Iran,” October 25, 2024 (it was still October 25 in the United States when the Israeli retaliatory strikes began).

Israel: Major Issues and U.S. Relations

Congressional Research Service 8

On October 1, Iran launched some 180 ballistic missiles at Israel in retaliation for killings it attributed to Israel of key Iranian, Hezbollah, and Hamas leaders.²⁸ As during Iran’s April barrage, the United States, United Kingdom, and France reportedly assisted in Israel’s defense (and Jordan responded to projectiles that entered its airspace), and Israel reported no fatalities.²⁹ Open sources indicated that areas in and around Israeli bases may have sustained more damage in October than in April.³⁰ The October barrage featured more ballistic missiles, and Iran reportedly did not warn the United States in advance.³¹

As expectations of an Israeli counterstrike mounted during October, President Biden and U.S. officials consulted with Israeli counterparts regarding their planned response, openly advising them to avoid targeting sites related to Iran’s nuclear program or oil industry,³² and—according to one Israeli journalist—possibly offering some material assistance if Israel exercised restraint.³³ Some Arab Gulf leaders may have also harbored worries about the Israeli response given apparent Iranian warnings that Iran would target their countries if Israel used Gulf states’ territory or airspace in its operations.³⁴ In mid-October, U.S. officials directed the deployment of a Terminal High Altitude Area Defense (THAAD) battery to Israel—along with about 100 U.S. troops to operate it—to supplement other movements of U.S. forces expressly intended to bolster Israel’s defenses, protect U.S. citizens and forces, and deter broader regional conflict.³⁵ One media report around the same time said that continued missile attacks from Iran and its allies could lead to a shortage of Israeli air defense interceptors and stretch U.S. supply chain capabilities.³⁶

Israel’s October 26 attack reportedly transited Syrian and Iraqi airspace, featured dozens of U.S.- origin aircraft, and targeted Iranian air defenses (including Russian-origin S-300 systems), military bases, drone and missile manufacturing facilities, and launch sites.³⁷ Reportedly, four Iranian soldiers and a civilian were killed. Some sources have speculated about possible U.S.- Israel coordination or intelligence sharing in relation to the Israeli strike.³⁸ Prime Minister

28 “Iran gambles with Israel attack after humiliating blows to allies,” BBC News, October 2, 2024.

29 Megan Specia and Aurelien Breeden, “Allies Say They Came to Israel’s Aid During Iran’s Missile Attack,” New York Times, October 2, 2024; Mohammed Ersan, “Jordanian authorities face backlash over role in downing Iranian missiles,” Middle East Eye, October 2, 2024.

30 Michael Knights and Elizabeth Dent, “Israel’s Missile Defense Performance: Views from the Gulf,” Washington Institute for Near East Policy, October 11, 2024; Geoff Brumfel, “Satellite images show dozens of Iranian missiles struck near Israeli air base,” NPR, October 4, 2024.

31 Susannah George, “Iran mustered fiercer attack than in the spring, warns of even worse,” Washington Post, October 2, 2024; Alexander Ward, “Iran Says It Didn’t Give U.S. Advance Warning of Attack,” Wall Street Journal, October 1, 2024.

32 White House, “Remarks by President Biden Before Air Force One Departure | Joint Base Andrews, MD,” October 2, 2024; “Press Briefing by President Biden, Press Secretary Karine Jean-Pierre, and National Economic Adviser Lael Brainard,” October 4, 2024.

33 Ben Caspit, “Inside US-Israel understanding to reward Netanyahu for not targeting Iran’s oil fields,” Al-Monitor, October 22, 2024.

34 “Exclusive: Gulf states must not allow use of airspace against Iran, Iranian official says,” Reuters, October 9, 2024.

35 David Vergun, “U.S. Terminal High Altitude Area Defense Battery Heading to Israel,” DOD News, October 15, 2024; White House, “Letter to Congressional Leadership Providing an Update on Developments in the Middle East and the U.S. Government’s Response,” October 15, 2024. For more information on THAAD system, see CRS In Focus IF12645, The Terminal High Altitude Area Defense (THAAD) System, by Andrew Feickert.

36 John Paul Rathbone, “Israel races to supply anti-missile shield,” Financial Times, October 15, 2024.

37 Carrie Keller-Lynn et al., “How Israel Pulled Off Its Largest-Ever Strike on Iran,” Wall Street Journal, October 26, 2024; “IDF hits military sites across Iran in hours-long attack, weeks after Iran’s missile barrage,” Times of Israel, October 26, 2024.

38 Neri Zilber and Najbeh Bozorgmehr, “Military briefing: Where Israel struck Iran,” Financial Times, October 28, 2024; Jared Szuba, “Pentagon denies role in Israel’s Iran strikes after warning against nuclear targets,” Al-Monitor, October 28, 2024.

Israel: Major Issues and U.S. Relations

Congressional Research Service 9

Netanyahu thanked the United States for “close coordination and assistance”; a senior U.S. official said “the United States was not a participant.”³⁹ By targeting Iran’s air defense systems, Israel might more easily strike Iranian nuclear and energy infrastructure in potential future attacks.⁴⁰ Saudi Arabia and the United Arab Emirates (UAE) condemned the “military targeting of” Iran and called for de-escalation.⁴¹

Possible Iranian response and U.S. force posture changes. While Iran said immediately after Israel’s attack that it had a right and obligation to defend itself against foreign acts of aggression, some reports suggested that it might not opt to respond.⁴² Many analysts acknowledge Israeli military superiority, and Israel reportedly warned Iran that any further attack on Israel would trigger more significant retaliation.⁴³

In early November, Iranian Supreme Leader Ayatollah Ali Khamenei warned of a “tooth-breaking response” to the Israeli October 26 strikes, with open sources reporting that Iranian officials are warning Arab counterparts about a “strong and complex” retaliation. Whether and how Iran might actually respond, and whether any such response would come directly or via allies in other countries, seem unclear in the context of Israel’s apparent military advantages and U.S. warnings that “severe consequences” would follow another Iranian attack against Israel.⁴⁴

On November 1, the Pentagon press secretary released a statement reading:

In keeping with our commitments to the protection of U.S. citizens and forces in the Middle East, the defense of Israel, and de-escalation through deterrence and diplomacy, the Secretary of Defense ordered the deployment of additional ballistic missile defense destroyers, fighter squadron and tanker aircraft, and several U.S. Air Force B-52 long- range strike bombers to the region. These forces will begin to arrive in coming months as the USS ABRAHAM LINCOLN Carrier Strike Group prepares to depart.⁴⁵

Regional assessment and possible U.S. policy implications. Israel-Iran escalation has occurred at a potential inflection point for the region. Israel may be pursuing an opportunity it perceives to improve its national security and regional position by degrading the capabilities, supply lines, and cohesion of Iran and its partners.⁴⁶ How Israeli tactical successes might affect long-term outcomes remains uncertain. Questions that may influence Israeli and Iranian decisions on escalation or de- escalation under various circumstances include the following:

• What are likely political benefits or risks of further conflict for both parties? What military consequences might result from further direct conflict or escalation elsewhere in the region (including Gaza and Lebanon)?

39 Ellie Cook, “Iran Points Finger at US After Israeli Attack,” Newsweek, October 27, 2024; White House, “Background Press Call on Israel’s Targeted Strikes Against Military Targets in Iran,” October 25, 2024.

40 “Israel’s limited missile strike on Iran may be the start of a wider assault,” Economist, October 26, 2024.

41 Zvika Klein, “Three-way subtext: How Saudi Arabia, UAE, and Egypt quietly back Israel on Iran – analysis,” Jerusalem Post, October 26, 2024.

42 Camille Gijs and Jamie Dettmer, “Iran says ‘obliged to defend itself’ after Israel’s reprisal attack,” Politico Europe, October 26, 2024; Dominic Waghorn, “You might think Israel’s airstrikes on Iran could lead to all-out war - but that doesn't look likely,” SkyNews, October 26, 2024.

43 Farnaz Fassihi, “Iran Preparing for War with Israel, but Hoping to Avert It,” New York Times, October 24, 2024; Barak Ravid, “Scoop: Israel sent message to Iran ahead of attack and warned against response,” October 24, 2025.

44 Summer Said and Benoit Faucon, “Iran Tells Region ‘Strong and Complex’ Attack Coming on Israel,” Wall Street Journal, November 3, 2024.

45 Department of Defense, “Statement from Pentagon Press Secretary Maj. Gen. Pat Ryder on Middle East Force Posture Updates,” November 1, 2024.

46 “Iran bombards Israel as the war escalates further,” Economist, October 1, 2024.

Israel: Major Issues and U.S. Relations

Congressional Research Service 10

• What are potential implications of pursuing de-escalation and/or diplomatic deals to pause or end fighting? How might showing restraint affect Israel’s or Iran’s credibility vis-à-vis partners and adversaries, or impact the window of opportunity for either of them to employ certain military, economic, or diplomatic options?

Some analysts have argued that Iran might restart its nuclear weapons program, which the regime had reportedly halted in 2003; Central Intelligence Agency (CIA) Director William Burns reportedly stated in October that his agency had not seen evidence that Iran had reversed its reported 2003 decision.⁴⁷ With regard to conventional warfare, some assessments indicate that Israeli actions over the past three months may have significantly reduced Iran’s ability to deter or intimidate Israel via its missiles and allied militias.⁴⁸

In that context, future U.S. policy debate could focus on which military, economic, and diplomatic options are best-suited to deliver priority outcomes, which could include

• minimizing the regional influence of Iran, Russia, and the PRC;⁴⁹

• decreasing threats to U.S. forces/citizens and key U.S. partners (including Israel, Jordan, Egypt, and Arab Gulf states);

• avoiding nuclear proliferation; and

• bolstering security via Israel-Arab state relations.

Arab governments including Saudi Arabia, the UAE, Egypt, and Jordan reportedly engage in discreet security coordination with the United States and Israel to counter Iran and its allies in the region.⁵⁰ Nevertheless, these Arab leaders likely seek to avoid escalation that could threaten Persian Gulf commerce and security. In addition, any Arab state support for future steps against Iran’s “axis of resistance” may be tempered by concerns about potential nuclear proliferation in the Middle East, as well as possible interrelated challenges for their regimes and economies from regional humanitarian crises, political discontent, and domestic public opinion supporting Palestinian statehood and opposing Israeli actions.⁵¹

U.S.-Israel Security Cooperation, Tensions, and Congressional Oversight

Multifaceted bilateral security coordination is a long-standing part of the U.S.-Israel relationship. U.S. law requires the executive branch to take certain actions to preserve Israel’s “qualitative military edge,” or QME, and expedites aid and arms sales to Israel in various ways. A 10-year bilateral military aid memorandum of understanding (MOU)—signed in 2016—commits the United States to provide Israel $3.3 billion in Foreign Military Financing (FMF) and to spend $500 million annually on joint missile defense programs from FY2019 to FY2028, subject to

47 David E. Sanger et al., “Behind the Tactical Gains Against Iran, a Longer-Term Worry,” New York Times, October 27, 2024; Dan De Luce, “There is no evidence Iran has decided to rush toward building a nuclear weapon, CIA director says,” NBC News, October 7, 2024.

48 Ellie Geranmayeh, “Iran Has Every Reason Now to Go Nuclear,” Foreign Policy, October 24, 2024; Steven Erlanger, “In Deciding Whether to Retaliate, Iran Faces a Dilemma,” New York Times, October 26, 2024.

49 Sune Engel Rasmussen et al., “Israeli Strikes on Iran Expose Gap in Prowess Between Two Arch Foes,” Wall Street Journal, October 27, 2024.

50 Barak Ravid, “Scoop: U.S. holds meeting with Israeli and Arab generals amid Gaza war,” Axios, June 12, 2024.

51 Edith M. Lederer, “Europeans, Arab and Muslim nations launch a new initiative for an independent Palestinian state,” Associated Press, September 28, 2024.

Israel: Major Issues and U.S. Relations

Congressional Research Service 11

congressional appropriations. The MOU anticipates possible supplemental aid in emergency situations such as conflict.

In response to the ongoing Israel-Hamas conflict and other regional tensions, Congress has allocated more than $12.6 billion in regular and supplemental FY2024 appropriations to the Departments of State and Defense, specifically in support of Israel. After some debate, lawmakers appropriated funding without imposing any conditions limiting the use of U.S. weaponry for Israel (beyond those already applicable generally under U.S. law). Expedited and ongoing U.S. arms exports to Israel have received increased congressional scrutiny since October 7, 2023.

National Security Memorandum-20 and Questions Regarding Israeli Compliance

As international scrutiny of Israel’s conduct during the war has grown, the Biden Administration has taken some steps aimed at promoting adherence to international law and accountability for U.S. arms deliveries to Israel. On February 8, 2024, President Biden issued NSM-20, a new National Security Memorandum (an executive document, not standing law). The directive requires that prior to the transfer of any U.S. defense article, the Departments of State and Defense must obtain “credible and reliable” written assurances from the recipient country that it will use any such defense articles in accordance with international humanitarian law and, as applicable, other international law. It also requires that in any area where such defense articles are used, the “recipient country will facilitate and not arbitrarily deny, restrict, or otherwise impede the transport or delivery” of humanitarian assistance.⁵² In late March, Israel provided those assurances to the United States. NSM-20 also required the Secretaries of State and Defense to assess for Congress whether U.S. defense articles have been used in a manner not consistent with international law. In May 2024, the Administration released its report to Congress under Section 2 of NSM-20 concluding, according to a document released online by an advocacy group (stating it is a copy), that “given Israel’s significant reliance on U.S.-made defense articles, it is reasonable to assess that defense articles covered under NSM-20 have been used by Israeli security forces since October 7 in instances inconsistent with its IHL [International Humanitarian Law] obligations or with established best practices for mitigating civilian harm.”⁵³ Despite the concerns raised, according to this release, the report assessed Israel’s March assurances (along with those of the other countries covered in the report) to be “credible and reliable so as to allow the provision of defense articles covered under NSM-20 to continue.” On October 13, 2024, Secretary of State Antony Blinken and Secretary of Defense Lloyd Austin jointly sent a letter,⁵⁴ which the Department of State described as a “private diplomatic communication,”⁵⁵ to Israel’s then- Minister of Defense Yoav Gallant and Minister of Strategic Affairs Ron Dermer. The letter stated that “Israel must, starting now and within 30 days,” act on several “concrete measures” vis-a-vis Gaza, such as enabling a surge of humanitarian aid into Gaza; and also said that “(f)ailure to demonstrate a sustained commitment to implementing and maintaining these measures may have implications for U.S. policy” under existing law. After the 30-day period, the Department of State said that it had not made an assessment that the Israelis are in violation of U.S. law, and that it would continue monitoring Israeli actions and assessing their compliance with U.S. law.⁵⁶ The department announced in November that senior U.S. and Israeli officials would hold an initial meeting in early December of a bilateral channel called for in the October letter to discuss various incidents of civilian harm.⁵⁷ Dermer and then- newly appointed Israeli Defense Minister Israel Katz provided a November 13 response to the U.S. letter, listing steps Israel has taken or plans to take to improve the humanitarian situation in Gaza.⁵⁸

52 White House, “National Security Memorandum on Safeguards and Accountability with Respect to Transferred Defense Articles and Defense Services,” February 8, 2024.

53 Just Security, “State Department Submits Key Report to Congress on Israel’s Use of US Weapons,” May 10, 2024.

54 The letter is available at X, Barak Ravid, October 15, 2024 – 9:33 AM, https://x.com/BarakRavid/status/ 1846182689222664471.

55 Department of State Press Briefing, October 15, 2024.

56 Department of State Press Briefing, November 12, 2024.

57 Department of State Press Briefing, November 19, 2024.

58 Barak Ravid, “Letter: Israel vows not to forcibly displace Palestinians from northern Gaza,” Axios, November 20, 2024.

Israel: Major Issues and U.S. Relations

Congressional Research Service 12

Following the issuance of NSM-20, there was continued scrutiny from some lawmakers,⁵⁹ and additional reports of U.S. munitions used in airstrikes in Gaza which resulted in Palestinian and other civilian casualties.⁶⁰ On April 1, an Israeli drone strike killed seven humanitarian workers from the World Central Kitchen (WCK) organization (including a U.S. citizen); the Israeli government described that strike as a “grave mistake.” During President Biden’s April 4 phone call with Prime Minister Netanyahu, the White House readout said Biden “made clear that U.S. policy with respect to Gaza will be determined by our assessment of Israel’s immediate action” on steps to address civilian harm, humanitarian suffering, and the safety of aid workers.⁶¹ Some analysts assessed that President Biden had implicitly threatened “to slow U.S. arms transfers to Israel or to temper U.S. support at the U.N.” if Israel did not take certain steps.⁶²

In May 2024, U.S. officials confirmed reports that the Biden Administration was “reviewing some near-term security assistance” for Israel and had paused a shipment of 2,000-pound bombs and 500-pound bombs, based on concern about their potential use in Gaza’s southernmost province of Rafah.⁶³ Though the Administration later released the shipment of 500-pound bombs, as of July 2024, it was reportedly continuing to review the 2,000-pound bomb shipment.⁶⁴

In August 2024, during a congressional recess, the Administration formally notified Congress of five potential Foreign Military Sales (FMS) to Israel for over $20 billion, including up to 50 new F-15IA fighter aircraft and additional F-15 upgrades.⁶⁵ According to media reports, foreign affairs committee leaders in the House and Senate, after a period of consideration, signed off on the FMS in summer 2024.⁶⁶ On September 25, 2024, Senator Bernie Sanders introduced six joint resolutions of disapproval, or JRDs (S.J.Res. 111, S.J.Res. 112, S.J.Res. 113, S.J.Res. 114, S.J.Res. 115, and S.J.Res. 116). Five of these JRDs corresponded to the five FMS mentioned above;⁶⁷ a sixth resolution corresponded to a Direct Commercial Sale (DCS) to Israel of Joint Direct Attack Munitions, or JDAMs.⁶⁸ Per Section 36(b)(2) of the Arms Export Control Act, the JRDs received expedited Senate consideration.⁶⁹ On November 20, three of the JRDs (S.J.Res. 111, S.J.Res. 113, and S.J.Res. 115) failed to be discharged from the Senate Foreign Relations Committee. In each of the three instances, at least 17 Senators voted in favor of discharging the JRD, with 19 voting for discharging S.J.Res. 113 (pertaining to a proposed sale of mortar cartridges) and 78 opposing.

On September 25, Senate Minority Leader Mitch McConnell and Senator Tom Cotton wrote a letter to President Biden saying, “We have reason to believe your administration is currently delaying” three weapons sales to Israel, including MK-84 bombs, Apache attack helicopters, and

59 Senator Chris Van Hollen, “Van Hollen, Schatz, Colleagues Press Administration on Concerns with New Arms Sales to Netanyahu Government, Request Assurances Prior to Proceeding,” February 23, 2024.

60 Stephen Semler, “Gaza breakdown: 20 times Israel used US arms in likely war crimes,” Quincy Institute for Responsible Statecraft, August 25, 2024.

61 White House, “Readout of President Joe Biden’s Call with Prime Minister Netanyahu of Israel,” April 4, 2024.

62 “Biden ultimatum to Netanyahu: protect Gaza civilians, or else,” Reuters, April 5, 2024.

63 Department of Defense, “Pentagon Press Secretary Air Force Maj. Gen. Pat Ryder Holds a Press Briefing,” May 9, 2024.

64 Nancy A. Youssef and Jared Malsin, “U.S. Agrees to Ship 500-Pound Bombs,” Wall Street Journal, July 11, 2024.

65 See, https://www.dsca.mil/tags/israel.

66 Robert Jimison, “After Delay, Top Democrats in Congress Sign Off on Sale of F-15 Jets to Israel,” New York Times, June 17, 2024.

67 Senators Peter Welch, Jeff Merkley, and Brian Schatz each co-sponsored one or more of the JRDs.

68 Senator Bernie Sanders, “Sanders and Colleagues Move to Block Arms Sales to Israel,” September 25, 2024.

69 See CRS In Focus IF10392, Foreign Military Sales Congressional Review Process, by Paul K. Kerr.

Israel: Major Issues and U.S. Relations

Congressional Research Service 13

Caterpillar D9 tractors, and arguing that “Further delays will endanger Israeli lives, increase the likelihood that the conflict will escalate further, and harm American national security interests.”⁷⁰

On September 26, Israeli defense officials issued a statement that said they had reached an agreement with U.S. counterparts on technical details for the use of $8.7 billion in U.S. assistance (possibly from FY2024 supplemental appropriations in P.L. 118-50) on various U.S., Israeli, and co-produced weapons systems, and that the aid package reflected the “strong and enduring strategic partnership between Israel and the United States and the ironclad commitment to Israel’s security.”⁷¹

Israeli Domestic Issues

Prime Minister Netanyahu returned to office in December 2022 (after two previous stints: 1996- 1999 and 2009-2021). Along with his Likud party, his coalition government includes ultra- nationalist and ultra-Orthodox (Haredi) parties (see Table 1 and Appendix B). The 2022 Knesset election was the fifth held in Israel since a legal process regarding corruption allegations against Netanyahu began in December 2018; his criminal trial is ongoing and could last for months or years.⁷² He is scheduled to begin testifying in December 2024.⁷³ According to some observers, coalition partners who support legal measures to help Netanyahu avoid criminal punishment may have leverage to pursue their policy preferences.⁷⁴

Table 1. Israeli Government: Key Positions

Position Name Party

Prime Minister Benjamin Netanyahu Likud

Defense Minister Israel Katz Likud

Foreign Minister Gideon Sa’ar New Hope

Finance Minister and Minister Within Defense Ministry Bezalel Smotrich Religious Zionism

Justice Minister Yariv Levin Likud

National Security Minister Itamar Ben Gvir Jewish Power

Transportation Minister Miri Regev Likud

Strategic Affairs Minister Ron Dermer No formal affiliation

Energy Minister Eli Cohen Likud

Agriculture and Rural Development Minister Avi Dichter Likud

Shortly after the October 7 attacks, Benny Gantz (a former defense minister and military chief of staff) brought his National Unity party into the government, specifying that it would only join for the duration of the war, and only undertake initiatives necessary for managing the country throughout the conflict. Amid ongoing national debate about whether and how to continue the war with Hamas, Gantz and National Unity pulled out of the government in June 2024, leaving

70 Senator Tom Cotton, “Cotton, McConnell to President Biden: Weapons Delays Cost Lives and Embolden Iran,” September 25, 2024.

71 “Israel says it has secured $8.7 billion U.S. aid package,” Reuters, September 26, 2024.

72 Yael Freidson, “Netanyahu Trial: Dates Set for Officials’ Testimony Despite PM’s Request to Postpone,” Haaretz, March 10, 2024.

73 Jeremy Sharon, “Court grants Netanyahu 8-day delay to start of his testimony in corruption trial,” Times of Israel, November 26, 2024.

74 Nahal Toosi, “The US Is Dealing with an Israeli Leader Who’s Losing Control,” Politico, January 8, 2024.

Israel: Major Issues and U.S. Relations

Congressional Research Service 14

Netanyahu with his pre-war coalition. In September 2024, the smaller New Hope party of former Likud member Gideon Sa’ar joined the government.

In early November, after months of speculation on the subject, Netanyahu announced the firing of Yoav Gallant as defense minister, replacing him with Yisrael Katz (who had been serving as foreign minister) and appointing Sa’ar as the new foreign minister. Netanyahu and Gallant had reportedly clashed on a number of issues, including Gallant’s skepticism that “total victory” against Hamas was possible, his calls for more urgent action to secure the release of hostages, and his advocacy for greater levels of military conscription for ultra-Orthodox Israelis.⁷⁵

Ultra-Nationalist Influence in the Government

Prime Minister Netanyahu’s inclusion of ultra-nationalists Bezalel Smotrich and Itamar Ben Gvir within the Israeli government formed in late 2022 triggered debate within Israeli society about the implications for Israel’s democracy, its ability to manage tensions with its Arab citizens and with Palestinians, and its relations with the United States and other countries.⁷⁶ Coalition agreements—though not legally binding—state that the Jewish people have an “exclusive right” to the land between the Mediterranean Sea and Jordan River,⁷⁷ appearing to conflict with Palestinian statehood aspirations. The following developments prior to October 7, 2023, intensified challenges for Netanyahu in addressing the demands of disparate domestic constituencies and international concerns.

• The government’s pursuit of changes to Israel’s judicial system during 2023. The process triggered significant national debate, as well as major protests and counter-protests, about whether and how changes to the judiciary’s current checks on democratically elected leaders might help or hinder Israeli governance and civil society.⁷⁸

• Various statements and actions by Smotrich and Ben Gvir appearing to downplay or negate Palestinian identity, human rights, and narratives in the context of tensions and violence in Jerusalem and the West Bank.⁷⁹

Smotrich and Ben Gvir have each assumed some security responsibilities. Under the coalition agreements, Smotrich, who is Israel’s finance minister, also has a defense ministry position with formal responsibility over civil affairs units administering West Bank and Gaza Strip issues, including the planning commission that oversees West Bank settlement construction and home demolitions.⁸⁰ In June 2023, the Israeli government eased and expedited the process for settlement construction approval, triggering criticism from both U.S. officials and West Bank- based Palestinian Authority officials.⁸¹ While the process reportedly remains subject to final authorization by the prime minister, this move makes it harder for the defense minister or prime

75 “Netanyahu fires Israeli Defense Minister Yoav Gallant, after months of clashes over war and politics,” CNN, November 6, 2024.

76 Josef Federman, “As Israel’s Netanyahu returns to office, troubles lie ahead,” Associated Press, December 29, 2022.

77 Barak Ravid, “Israel swears in most right-wing government in its history,” Axios, December 29, 2022.

78 “Israel’s Supreme Court overturns a key component of Netanyahu’s polarizing judicial overhaul,” Associated Press, January 1, 2024.

79 “Far-right minister says Israel ‘in charge’ on visit to Jerusalem holy site,” Guardian, May 21, 2023; “Smotrich says there’s no Palestinian people, declares his family ‘real Palestinians,’” Times of Israel, March 20, 2023.

80 Carrie Keller-Lynn, “Smotrich given authority over key West Bank appointments in deal with Likud,” Times of Israel, December 5, 2022.

81 Isabel Kershner, “Israel Eases Rules for Settlements in West Bank,” New York Times, June 19, 2023; Department of State, “The United States is Deeply Troubled with Israeli Settlement Announcement,” June 18, 2023.

Israel: Major Issues and U.S. Relations

Congressional Research Service 15

minister to slow the efforts of Smotrich or any successor in his position.⁸² In May 2024, Israel Defense Forces (IDF) officers apparently delegated some areas of their authority in the West Bank to a civilian administrator answerable to Smotrich rather than military commanders, though the administrator’s actions may in some cases be subject to the defense minister’s approval. Critics of these moves argued that they moved the West Bank—which has been subject to overarching Israeli military control since 1967—closer to de facto annexation by Israel.⁸³

Ben Gvir heads a national security ministry with general authority over Israel’s police and border police, including some units operating in the West Bank with the IDF.⁸⁴ According to some Israeli journalists citing various sources, Ben Gvir has apparently exercised influence over personnel decisions and some operational matters, including Israeli security practices that (1) reportedly favor Jewish worshippers more than previously at Jerusalem’s Temple Mount/Haram al Sharif, and (2) at times have reduced police protection for trucks carrying humanitarian aid to Gaza from “harassment by right-wing activists.”⁸⁵

The September entry of Sa’ar’s New Hope party into the coalition would likely require both Smotrich and Ben Gvir to pull their parties out of the government to trigger an election.

Netanyahu’s Status and the Possibility of Early Elections

Popularity swings and some ongoing controversies. Netanyahu’s popularity dropped sharply after the October 7 attack, according to polling. He has said that the circumstances surrounding the assault will be investigated after the war, and that nobody will evade responsibility. Some other leaders, including former Defense Minister Gallant, have called for a more expedited investigation by an independent commission. In Israel’s history, perceived security failures contributed to shortening the careers of Prime Ministers Golda Meir, Menachem Begin, and Ehud Olmert. While some Israelis have advocated for an early Knesset election, it cannot be forced without action by Netanyahu himself or a number of Knesset members from his pre-war coalition, or unless the Knesset fails to pass a new budget by the end of March 2025. The September entry of Sa’ar’s New Hope party into the coalition would likely require both Smotrich and Ben Gvir to pull their parties out of the government to trigger an election. If the current coalition holds, the next Knesset election is scheduled to occur in late 2026.

Israeli military efforts against Hamas and Hezbollah—particularly successes since July 2024 in targeting leadership and military infrastructure—may also have bolstered Netanyahu’s political position. Some November 2024 polls suggest that Likud has the most popular support of any current Israeli party, but the opposition figures and parties that comprised the previous 2021-2022 government may have a better chance of gaining electoral support for a new coalition than Likud and its current government partners.⁸⁶

82 Kershner, “Israel Eases Rules for Settlements in West Bank.”

83 Matthew Mpoke Bigg, “Administrative Change Advances Far-Right Effort to Control West Bank,” New York Times, June 21, 2024.

84 “Likud agrees to split entire Border Police from police force, hand Ben Gvir control,” Times of Israel, December 29, 2022.

85 Neri Zilber, “How far-right minister Itamar Ben-Gvir reshaped Israel’s police,” Financial Times, September 16, 2024; Josh Breiner, “How Far-right National Security Minister Itamar Ben-Gvir Took Over Israel’s Police,” Haaretz, June 13, 2024; Jeremy Sharon, “Police chief to AG: Ben Gvir pushed to prevent police from guarding Gaza aid convoys,” Times of Israel, June 13, 2024. For information on the “status quo” at the Temple Mount/Haram al Sharif, see CRS Report RL33476, Israel: Background and U.S. Relations, by Jim Zanotti.

86 “Poll: Netanyahu’s Likud drops slightly with Hezbollah truce; Bennett would win if he ran,” Times of Israel, November 29, 2024.

Israel: Major Issues and U.S. Relations

Congressional Research Service 16

In November, an Israeli court revealed information suggesting that some people working in Prime Minister Netanyahu’s office may have leaked classified documents in a way that arguably might have complicated Israeli-Hamas cease-fire negotiations in September.⁸⁷ Opposition lawmakers have made statements holding Netanyahu responsible for actions within his office.⁸⁸ On November 21, two people, including an aide to Netanyahu, were indicted for disclosing confidential information.⁸⁹

Haredi military conscription issue. Separately, a rift within Netanyahu’s coalition over traditional exemptions for Israel’s growing Haredi (ultra-Orthodox) community from military service could potentially endanger this government’s survival. In the context of Israel’s heightened national security posture and a government proposal to expand military service requirements for most Israelis (other than its Arab citizens), some members of Netanyahu’s Likud party (including then-Defense Minister Gallant) have said that Haredim should join with other citizens in shouldering more responsibility for military or civil national service.⁹⁰

In June 2024, about a year after the expiration of a legal provision exempting Haredim enrolled in religious schools (yeshivas) from military service, Israel’s Supreme Court ordered state agencies to take active steps to draft these men.⁹¹ While the court did not specify the scale of enlistment or precise manner of implementation,⁹² the attorney general’s office instructed the military to draft 3,000 new Haredim (fewer than 2,000 were serving at that point).⁹³ Reports suggest that many of the recruits drafted since have resisted conscription.⁹⁴ The defense ministry called up 1,000 Haredim in July, and announced in November that it would gradually send draft notices to 7,000 more.⁹⁵

Netanyahu has supported the revival of a bill from the previous Knesset in an apparent effort to avoid contention between Haredi and secular elements of his coalition. The revived bill would provide for some gradual steps toward some Haredi conscription, but Gallant had demanded that the coalition get some opposition support before enacting the bill, a task that could require agreement to conscription levels beyond those currently in the bill.⁹⁶ Since Gallant’s removal as defense minister, Yuli Edelstein, a Likud member who heads the Knesset Foreign Affairs and Defense Committee, has continued to insist on broader consensus before allowing the bill to advance.⁹⁷

87 Isabel Kershner, “Case of Leaked Documents in Gaza Cease-Fire Talks Is Roiling Israel,” New York Times, November 4, 2024.

88 “Several suspects arrested amid probe of PM’s office over alleged classified intel leak,” Times of Israel, November 1, 2024.

89 “Netanyahu aide Eli Feldstein indicted for endangering national security,” Jerusalem Post, November 21, 2024.

90 Emanuel Fabian, “Gallant calls for drafting ultra-Orthodox in order to attain Gaza war aims,” Times of Israel, February 28, 2024; Dov Lieber and Carrie Keller-Lynn, “Calls Grow to Include Israel’s Ultra-Orthodox Jews in Draft,” Wall Street Journal, February 23, 2024.

91 Rina Bassist, “What Israel’s Supreme Court ruling to draft ultra-Orthodox means for Netanyahu,” Al-Monitor, June 25, 2024.

92 Jeremy Sharon, “Court specifies state must ‘act to enforce law’ to draft Haredim, but indicates leeway on how many must be drafted immediately,” Times of Israel, June 25, 2024.

93 Shan Li and Carrie Keller-Lynn, “Ultra-Orthodox Israeli Men Protest Against Military Draft Order,” Wall Street Journal, July 1, 2024.

94 “Israel’s ultra-Orthodox still won’t fight, invoking scripture,” Economist, August 15, 2024.

95 “Israel sends draft orders to more ultra-Orthodox,” Reuters, November 17, 2024.

96 Ravit Hecht, “Even if Israel’s Haredim Cooperate, Passing a Conscription Law Is No Mean Feat,” Haaretz, October 23, 2024.

97 Sam Sokol, “With Gallant gone, Edelstein is the ‘final obstacle’ to Haredi draft exemption law,” Times of Israel, November 19, 2024.

Israel: Major Issues and U.S. Relations

Congressional Research Service 17

Israeli-Palestinian Issues

Israel-Hamas Conflict and Gaza

Casualties, hostages, and humanitarian impact. More than 1,200 Israelis and foreign nationals (including 46 U.S. citizens in Israel) were killed on October 7, and Hamas and other groups also seized some 251 hostages.⁹⁸ In the conflict to date, more than 44,000 Palestinians in Gaza have been killed, according to the Hamas-controlled health ministry there. Additionally, about 90% of Gaza’s some 2.1 million residents have been displaced, with most facing unsanitary, overcrowded conditions alongside acute shortages of food, water, medical care, and other essential supplies and services.⁹⁹ For more information on the conflict, see CRS Report R47828, Israel and Hamas Conflict In Brief: Overview, U.S. Policy, and Options for Congress, by Jim Zanotti and Jeremy M. Sharp.

Israel’s war effort and U.S.-Israel cooperation and tensions. Israeli Prime Minister Benjamin Netanyahu has repeatedly stated that Israel seeks “total victory” over Hamas,¹⁰⁰ including by destroying Hamas’s military and governing capabilities in Gaza and recovering all hostages. Debate has ensued among Israeli officials and citizens about the achievability of, and possible tension between, these objectives. Disagreements with Netanyahu led Benny Gantz to leave the governing coalition in June 2024. In October 2024, then-Defense Minister Gallant reportedly sent a letter to Netanyahu saying that Israel’s war goals needed updating by comprehensively assessing the various areas of fighting in the region and the interconnections between them.¹⁰¹ Gallant also expressed support for “painful concessions” to obtain the release of hostages from Gaza.¹⁰²

Defining the success or sufficiency of Israeli operations in Gaza may also be complex and potentially divisive. As Israeli officials have debated the issue, some have asserted that a complete eradication of Hamas from Gaza or Palestinian politics is unlikely.¹⁰³ In September, Gallant said, “Hamas as a military formation no longer exists. Hamas is engaged in guerrilla warfare and we are still fighting Hamas terrorists and pursuing Hamas leadership.”¹⁰⁴ In October, days after Israeli troops killed top Hamas leader Yahya Sinwar in Rafah, Gallant said that Iran could no longer effectively use Hamas in Gaza (or Hezbollah in Lebanon) against Israel.¹⁰⁵

98 White House, “Remarks by President Biden Before the 79th Session of the United Nations General Assembly | New York, NY,” September 24, 2024; Chantal Da Silva, “Who are the American hostages still held by Hamas?” NBC News, September 23, 2024.

99 UN-OCHA, “Humanitarian Situation Update #243| Gaza Strip,” December 3, 2024; “Reported impact snapshot | Gaza Strip,” December 3, 2024. Palestinian casualty figures, which presumably include combatants and civilians, come from the Hamas-controlled health ministry in Gaza.

100 Israeli Prime Minister’s Office, “PM Netanyahu’s speech at UNGA in New York,” September 28, 2024.

101 “Gallant said to tell Netanyahu management of war directionless, goals need updating,” Times of Israel, October 28, 2024.

102 Ikrame Imane Kouachi, “Israeli defense minister calls for ‘painful concessions’ to return hostages from Gaza,” Anadolu Agency, October 27, 2024.

103 “IDF spokesman says Hamas can’t be destroyed, drawing retort from PM: ‘That’s war’s goal,’ Times of Israel, June 20, 2024. See also Bruce Hoffman, “How Much of a Threat Does Hamas Still Pose to Israel?” Council on Foreign Relations, June 14, 2024; Armed Conflict Location and Event Data, “After a year of war, Hamas is militarily weakened—but far from ‘eliminated,’” October 6, 2024; Ghaith al-Omari, “Can Hamas Be Defeated?” Washington Institute for Near East Policy, May 21, 2024.

104 “Gallant: Hamas as ‘military formation’ in Gaza is gone, IDF focus shifting to north,” Times of Israel, September 10, 2024.

105 “Israeli defence minister: Hamas, Hezbollah no longer effective proxies for Iran,” Reuters, October 27, 2024.

Israel: Major Issues and U.S. Relations

Congressional Research Service 18

Hamas’s capacity to threaten Israel may be largely separate from factors affecting its continued ability to influence events in Gaza. Some observers speculate about the extent to which Hamas or other actors, possibly including armed gangs and clans, might exercise control over Gaza either as a whole or in part.¹⁰⁶

The United States has provided political and material support for Israeli efforts to end Hamas rule in Gaza and secure the return of hostages. During the first half of 2024, the Biden Administration also increased criticism of Israel in connection with Israel’s prosecution of the war, questions about the extent to which military operations may or may not advance the Israeli government’s stated objectives, and greater casualty counts and reported humanitarian challenges among Palestinian civilians.¹⁰⁷ Since then, the Administration has pushed for a cease-fire that it asserts would bring hostages home, bolster Israel’s security, ease suffering in Gaza, and help de-escalate broader regional conflict.¹⁰⁸

International Criminal Court (ICC) Warrants Against Israeli and Hamas Leaders

On November 21, 2024, the ICC issued arrest warrants against Israeli Prime Minister Netanyahu and former Defense Minister Gallant for alleged crimes since October 2023. An ICC Pre-Trial Chamber found reasonable grounds to issue warrants against Netanyahu and Gallant for “the war crime of starvation as a method of warfare; and the crimes against humanity of murder, persecution, and other inhumane acts”; as well as “criminal responsibility as civilian superiors for the war crime of intentionally directing an attack against the civilian population.”¹⁰⁹ The Pre-Trial Chamber also found reasonable grounds to issue warrants against Hamas leader Mohammed Diab Ibrahim Al-Masri, also known as Mohammed Deif, for “the crimes against humanity of murder; extermination; torture; and rape and other form of sexual violence; as well as the war crimes of murder, cruel treatment, torture; taking hostages; outrages upon personal dignity; and rape and other form of sexual violence.”¹¹⁰ The Biden Administration and several Israeli government and opposition figures decried the warrants against Netanyahu and Gallant, insisting that the ICC has no jurisdiction in the matter. President Biden said that “whatever the ICC might imply, there is no equivalence—none—between Israel and Hamas. We will always stand with Israel against threats to its security.”¹¹¹ ICC proceedings against a defendant can only take place if the defendant is in custody. Israel and the United States are not state parties to the Rome Statute that governs the ICC, but Netanyahu’s travel to countries that are state parties (including most Western countries) may be curtailed because of these countries’ treaty obligations to act on ICC arrest warrants.¹¹² Some observers speculate about whether the ICC Prosecutor might request warrants against additional Israeli figures, and whether some countries may respond to the ICC warrants by placing arms embargoes on Israel.¹¹³

106 Amanda Taub, “If Israel or Hamas Don't Take Charge, Who Controls Postwar Gaza?” New York Times, December 2, 2024.

107 “Read the Full Transcript of President Joe Biden’s Interview with TIME,” Time, June 4, 2024.

108 White House, “Remarks by President Biden Before the 79th Session of the United Nations General Assembly | New York, NY, September 24, 2024.

109 ICC, “Situation in the State of Palestine: ICC Pre-Trial Chamber I rejects the State of Israel’s challenges to jurisdiction and issues warrants of arrest for Benjamin Netanyahu and Yoav Gallant,” November 21, 2024.

110 ICC, “Situation in the State of Palestine: ICC Pre-Trial Chamber I issues warrant of arrest for Mohammed Diab Ibrahim Al-Masri (Deif),” November 21, 2024. Israel has asserted that its military killed Deif, the leader of Hamas’s military wing, in a July 2024 Gaza strike. Two other Hamas leaders for whom the ICC Prosecutor requested arrest warrants in May—Yahya Sinwar and Ismail Haniyeh—have since been confirmed as killed.

111 White House, “Statement from President Joe Biden on Warrants Issued by the International Criminal Court,” November 21, 2024.

112 The list of Rome Statute state parties is available at https://asp.icc-cpi.int/states-parties.

113 Ben Caspit, “Could Trump intervene against ICC arrest warrants to help Netanyahu?” Al-Monitor, November 22, 2024.

Israel: Major Issues and U.S. Relations

Congressional Research Service 19

After the ICC Prosecutor requested arrest warrants against Israeli and Hamas leaders in May,¹¹⁴ the House passed the Illegitimate Court Counteraction Act (H.R. 8282) in June.¹¹⁵ The bill would require the President (subject to a waiver under certain circumstances) to impose sanctions on foreign persons engaging in or aiding the ICC’s efforts to act against officials from Israel or certain other countries designated as U.S. allies. Some Members of Congress and figures from the incoming Administration have suggested they might take action against the ICC.¹¹⁶ Via a June 2020 executive order, the Trump Administration authorized sanctions against foreign persons found to be acting in support of the ICC Prosecutor’s investigation of U.S. personnel,¹¹⁷ and then placed sanctions on two ICC officials (including then-Prosecutor Fatou Bensouda) in September 2020.¹¹⁸ In April 2021, the Biden Administration revoked the executive order, thereby lifting the sanctions.¹¹⁹

Israeli offensive in northern Gaza and humanitarian concerns. Secretary of State Antony Blinken and Secretary of Defense Lloyd Austin sent their October 13 letter pressing for increased Israeli facilitation of aid to Gaza shortly after the IDF began a new offensive in northern Gaza. Reportedly, this new military campaign coincided with the complete stoppage of humanitarian convoys to that area. Some convoys have since entered northern Gaza, and the Department of State has said that Israel has taken some other steps in apparent response to U.S. concerns, while calling for more changes.¹²⁰ In the November letter from Israeli officials responding to the October 13 U.S. letter, Israel affirmed “that it has no policy of forced evacuation of civilians from anywhere in the Gaza Strip, including northern Gaza.”¹²¹

Major challenges to the safe delivery of aid in areas featuring active conflict or lacking law and order have hampered humanitarian operations by international organizations and other groups.¹²² In October, the Integrated Food Security Phase Classification (IPC) assessed that 86% of Gaza’s population are experiencing high levels of acute food insecurity, with all of Gaza at risk of famine between November 2024 and April 2025 under a worst-case scenario. UN officials and aid groups argue that Israeli authorities have largely denied humanitarian assistance in northern Gaza, enabled criminal looting by Gazan gangs, and blocked many requests to improve safety measures.¹²³ Some sources have cited Israel’s targeting of convoys’ civilian police escorts, because of the police’s alleged affiliation with the Hamas-run government, as possibly contributing to the looting.¹²⁴ In denying culpability for the looting incidents, Israel’s military has insisted that it seeks to facilitate aid deliveries without collateral damage and to thwart looting and terrorism.¹²⁵ Within this context, Israel is apparently considering other options, including

114 CRS Insight IN12366, Israel and Hamas: Possible International Criminal Court (ICC) Arrest Warrants, by Matthew C. Weed and Jim Zanotti.

115 A version of the bill (S. 4484) was introduced in the Senate in June.

116 Senator John Thune, “Thune: The World Is Watching,” November 21, 2024; Barak Ravid, “ICC issues arrest warrants for Israel’s Netanyahu, Gallant,” Axios, November 21, 2024.

117 CRS Insight IN11428, International Criminal Court: U.S. Sanctions in Response to Investigation of War Crimes in Afghanistan, by Matthew C. Weed and Dianne E. Rennack.

118 Department of State, “Actions to Protect U.S. Personnel from Illegitimate Investigation by the International Criminal Court,” September 2, 2020, at https://2017-2021.state.gov/actions-to-protect-u-s-personnel-from-illegitimate- investigation-by-the-international-criminal-court/.

119 Department of State, “Ending Sanctions and Visa Restrictions against Personnel of the International Criminal Court,” April 2, 2021.

120 Department of State Press Briefing, November 12, 2024.

121 Ravid, “Letter: Israel vows not to forcibly displace Palestinians from northern Gaza.”

122 “North Gaza ‘apocalyptic,’ everyone at ‘imminent risk’ of death, warns UN,” Reuters, November 1, 2024.

123 UN-OCHA, “Humanitarian Situation Update #243 | Gaza Strip,” December 3, 2024; Claire Parker, “Gangs looting Gaza aid operate in areas under Israeli control, aid groups say,” Washington Post, November 18, 2024; Hiba Yazbek and Erika Solomon, “Aid Trucks Are Looted Inside Gaza, U.N. Says,” New York Times, November 19, 2024.

124 Parker, “Gangs looting Gaza aid operate in areas under Israeli control, aid groups say.”

125 Ibid.; Yazbek and Solomon, “Aid Trucks Are Looted Inside Gaza, U.N. Says.”

Israel: Major Issues and U.S. Relations

Congressional Research Service 20

using private contractors to provide aid and/or security and seeking funding from other countries.¹²⁶ Some reports indicate that aid workers have faced continued danger from Israeli strikes, with personnel from WCK and Save the Children reportedly killed in late November; Israel asserted that one of the WCK workers took part in the October 7 attacks.¹²⁷ In early December, the UN Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) paused aid delivery through the Kerem Shalom crossing from Israel into Gaza due to a “breakdown in public order and safety,” and called on Israel to ensure the safe flow of aid and refrain from attacks on humanitarian workers.¹²⁸

As international organizations sought to complete the final phase of polio vaccinations for children in Gaza aged under 10 years in response to an apparent outbreak, the World Health Organization (WHO) and UN Children’s Fund (UNICEF) said on November 6 that 7,000 to 10,000 of these children in northern Gaza remained inaccessible and unvaccinated.¹²⁹

UNRWA. Developments related to ongoing conflict and the humanitarian crisis in Gaza could have major implications for the future of UNRWA, which has been the primary provider of direct services and assistance to Palestinian refugees for decades. In the wake of Israel’s accusations that 19 UNRWA staff were involved in the October 7 attacks, March 2024 congressional action barred U.S. funding to UNRWA (in P.L. 118-47) until March 25, 2025. Additionally, two Israeli laws enacted by the Knesset on October 29, 2024, might have far-reaching consequences affecting UNRWA’s ability to operate in Gaza, the West Bank, and Jerusalem.¹³⁰ Ninety days after enactment (starting late January 2025), the laws would reportedly ban all UNRWA activities and services on Israeli territory, and sever all contacts between Israeli government employees and UNRWA.¹³¹ The Department of State has said it is “deeply troubled” by the Israeli action, stating that the bills’ implementation would pose risks for “millions of Palestinians who rely on UNRWA,” and that “right now” UNRWA’s role in Gaza “cannot be filled by anyone else.”¹³² For background on UNRWA and U.S. policy since October 2023, see CRS Insight IN12316, The United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA): Overview and U.S. Funding Prohibition, by Rhoda Margesson and Jim Zanotti.

Cease-fire talks. U.S. efforts to promote a cease-fire agreement have not resulted in a deal to date. Both Israel and Hamas have reportedly resisted various proposals. On the issue of a continued Israeli military presence at the Philadelphi Corridor along Gaza’s border with Egypt, Netanyahu and then-Defense Minister Gallant appeared at odds in September—with Netanyahu insisting that Israel needs to maintain control of the corridor, and Gallant reportedly saying that prioritizing the corridor “at the cost of the lives of the hostages is a moral disgrace.”¹³³ Israeli

126 Barak Ravid, “Scoop: U.S. consultants gave Israel plan to secure aid delivery in Gaza,” Axios, November 19, 2024; Paul Nuki, “Former British special forces poised to deliver aid to new Gaza ‘gated communities,’” Telegraph (UK), October 25, 2024; Itamar Eichner, “‘We’re fashioning post-war Gaza’: The contractor set to facilitate aid distribution in Gaza,” Ynetnews, October 27, 2024.

127 UN-OCHA, “Humanitarian Situation Update #243 | Gaza Strip,” December 3, 2024; “Food charity pauses Gaza work after staff killed in Israeli strike, BBC News, November 30, 2024.

128 UN-OCHA, “Humanitarian Situation Update #243 | Gaza Strip,” December 3, 2024.

129 WHO and UNICEF, “Second round of polio campaign in Gaza completed amid ongoing conflict and attacks: UNICEF and WHO,” November 6, 2024.

130 Barak Ravid, “U.S. ‘deeply concerned’ new Israeli laws will worsen Gaza crisis,” October 28, 2024.

131 Jeremy Sharon, “How will Israel’s new anti-UNRWA laws impact the controversial agency’s operations?” Times of Israel, November 1, 2024.

132 Department of State Press Briefing, October 29, 2024.

133 Israeli Prime Minister’s Office, “PM Netanyahu’s Remarks from his Press Conference,” September 3, 2024; “Gallant said to call Philadelphi demand a ‘disgrace,’ drawing fury from PM, ministers,” Times of Israel, September 2, 2024.

Israel: Major Issues and U.S. Relations

Congressional Research Service 21

authorities cited in May said that controlling the corridor is essential to prevent Hamas from accessing weapons and contraband they say have long been smuggled into Gaza from Egypt,¹³⁴ despite Egyptian officials’ insistence that their forces had previously cut off smuggling routes.¹³⁵ As domestic Israeli debate on the subject intensified in September, some Israeli officials or former officials were cited as saying that in the wake of Egyptian anti-smuggling efforts, most of Hamas’s weapons were locally made, and most smuggling came via sea or above ground at the Rafah (Egypt-Gaza) or Kerem Shalom (Israel-Gaza) crossings.¹³⁶

In October, President Biden said that the death of Hamas leader Sinwar presented an opportunity for “a political settlement that provides a better future for Israelis and Palestinians alike.”¹³⁷ Soon after, Egyptian officials proposed a short-term Israel-Hamas cease-fire and hostage-prisoner exchange, with U.S. and Qatari officials rejoining mediation efforts.¹³⁸ In early November, Secretary Blinken indicated that Hamas rejected this proposal.¹³⁹

Various factors could contribute to Hamas’s hardening or softening of its positions on a possible cease-fire, including the hostages’ status; the group’s post-Sinwar decisionmaking process; its strength on the ground and in Palestinian domestic politics; and military or political actions by Israel, the United States, Iran and its allies, and Arab governments.

Israel could pursue a potential cease-fire or undertake military action in Gaza aimed at further degrading Hamas. Rather than opting for a negotiated truce, Israel may seek to unilaterally suspend or limit its operations, try to rescue hostages, or both. In reviewing alternatives, Israeli leaders might evaluate

• Hamas’s leadership structure, capabilities, cohesion, and resilience;

• Israel’s and Hamas’s relative interest in specific issues, such as control of or continued presence in key areas of Gaza, or the release of Palestinian prisoners;

• the practical and political feasibility of replacing Hamas’s putative governance and security roles in Gaza via Israeli, Palestinian, and/or international efforts;

• costs and benefits of continued regional conflict, including the extent to which the United States may or may not support it; and

• domestic political pressure connected with the hostages’ continued captivity, external threats and international criticism against Israel, and the human and economic costs of conflict since October 2023.

Netanyahu has pledged to bring home additional hostages, but questions persist about his willingness to reach a deal with Hamas. In mid-November, he stated that Hamas would not be

134 Steven Erlanger et al., “Condemnation Slows, but Does Not Stall, Israel’s Assault on Rafah,” New York Times, May 25, 2024; Benny Avni, “Jerusalem-Cairo Relations in Jeopardy Over Disagreements Regarding Gaza and the Hamas War,” New York Sun, May 13, 2024.

135 “Egypt replies to ‘false Israeli allegations’ about smuggling weapons through borders with Gaza,” Egypt Today, April 22, 2024.

136 Vivian Yee et al., “How Control of One Gaza Border Has Stalled a Cease-Fire and Upset Egypt,” New York Times, September 14, 2024.

137 White House, “Statement from President Joe Biden on the Death of Yahya Sinwar,” October 17, 2024.

138 Summer Said et al., “U.S., Israel to Join New Talks for Short-Term Gaza Cease-Fire,” Wall Street Journal, October 25, 2024.

139 Department of State, “Secretary Blinken’s Call with Egyptian Foreign Minister Abdelatty,” November 4, 2024.

Israel: Major Issues and U.S. Relations

Congressional Research Service 22

able to govern Gaza, and offered large monetary rewards to Gazans who might be willing to return hostages to Israel.¹⁴⁰

The UN Security Council has adopted four resolutions since October 2023 that have called for pauses to the conflict, the release of all hostages, and urgent efforts to expand the flow of humanitarian aid and reinforce the protection of civilians in Gaza.¹⁴¹ The United States abstained from the first three and voted for the fourth in June. In November 2024, the United States vetoed a draft Security Council resolution that was supported by the other council members, with a U.S. official justifying the veto because the draft resolution did not make the release of hostages an explicit condition for a cease-fire.¹⁴²

While announcing the cease-fire between Israel and Hezbollah on November 26, President Biden also said that “the United States will make another push with Turkey, Egypt, Qatar, Israel, and others to achieve a ceasefire in Gaza with the hostages released and the end to the war without Hamas in power.”¹⁴³

Regional sentiment and Israel-Arab state relations. The regional reaction to Israel’s military operations in Gaza has been predominantly negative.¹⁴⁴ Nevertheless, no Arab country with either peace treaties or normal diplomatic relations with Israel has suspended its treaty or severed diplomatic ties. U.S. negotiations with Saudi Arabia over a series of security and other agreements intended to incentivize Saudi diplomatic normalization with Israel were put on hold following the October 7 attacks and onset of the Israel-Hamas war, but resumed in 2024, with the U.S. Ambassador to Saudi Arabia referring to some possible progress in August.¹⁴⁵ In September 2024, Saudi Crown Prince Mohammed bin Salman said, “The kingdom will not stop its tireless work towards the establishment of an independent Palestinian state with East Jerusalem as its capital, and we affirm that the kingdom will not establish diplomatic relations with Israel without that.”¹⁴⁶ Later that month, the Saudi foreign minister announced the launch of a new joint Arab- European initiative to garner support for a two-state solution.¹⁴⁷

West Bank and Palestinian Authority

(For historical background on the broader Israeli-Palestinian conflict and factors contributing to the current round of violence, see archived CRS Report RL34074, The Palestinians: Background and U.S. Relations, by Jim Zanotti; and archived CRS Report RL33476, Israel: Background and U.S. Relations, by Jim Zanotti.)

140 “Touring Gaza, PM vows Hamas won’t return to power, offers $5 million for hostages,” Times of Israel, November 20, 2024.

141 Resolution 2712 (November 15, 2023), Resolution 2720 (December 22, 2023), Resolution 2728 (March 25, 2024), and Resolution 2735 (June 10, 2024).

142 U.S. Mission to the United Nations, “Ambassador Robert Wood’s Interview with Lynda Kinkade of CNN,” November 21, 2024.

143 White House, “Remarks by President Biden Announcing Cessation of Hostilities Between Israel and Hezbollah,” November 26, 2024.

144 Laura Kelly, “Arab world holds overwhelmingly negative view of the US over support for Israel: Poll,” The Hill, February 8, 2024.

145 Abdulhadi Habtor, “Ratney: US Expediting Strategic Agreements with Saudi Arabia,” Asharq Al-Awsat, August 26, 2024. See also, CRS Report R48162, Possible U.S.-Saudi Agreements and Normalization with Israel: Considerations for Congress, by Christopher M. Blanchard.

146 “Saudi Arabia will not recognise Israel without Palestinian state, says Crown Prince,” Reuters, September 18, 2024.

147 Joseph Haboush, “Saudi Arabia announces new global coalition to establish Palestinian state,” Al Arabiya, September 27, 2024.

Israel: Major Issues and U.S. Relations

Congressional Research Service 23

While Israel maintains overarching military control over the West Bank, the PA has some authority to administer and provide security in specified Palestinian-populated areas, per Israeli- Palestinian agreements dating back to the 1990s. PA President Mahmoud Abbas heads the secular Arab nationalist faction Fatah, which has been the leading group within the Palestine Liberation Organization (PLO) for decades. Abbas’s age (b. 1935) has contributed to speculation about leadership succession.

Israel-PA relations are marked by heavy public disagreement, but also feature fluctuating levels of coordination on practical issues, including security. The United States and other Western countries have generally sought to bolster the Abbas-led PA vis-à-vis Hamas—which violently seized Gaza from Fatah-led PA forces in 2007—and to support PA-Israel cooperation. Some observers have asserted that before October 7, Israeli officials at times had accepted the status quo in Gaza—with Hamas in control and some funding for Gaza coming from Qatar—perhaps partly to avoid Israeli-Palestinian peace negotiations.¹⁴⁸ According to a prominent Israeli journalist, in 2019 Prime Minister Netanyahu said to his party’s parliamentary caucus, “Whoever opposes a Palestinian state must support delivery of funds to Gaza because maintaining separation between the PA in the West Bank and Hamas in Gaza will prevent the establishment of a Palestinian state.”¹⁴⁹

Violence, Settlements, and U.S. Responses (Including Sanctions)

Overview. Tensions and violence in the West Bank involving Palestinian militants, Israeli forces, and Israeli settlers posed a major problem in the two years before October 7.¹⁵⁰ According to some open sources, various factors fueling increased Palestinian militancy included Israeli actions in the West Bank, PA weakness, Palestinian socioeconomic challenges and generational change, reported Iranian assistance, and the easy availability of weapons.¹⁵¹

Since the outbreak of war between Israel and Hamas in Gaza, West Bank violence has also worsened, featuring attacks by militants and/or extremists on both sides against civilians and/or their property, and Israeli raids into restive Palestinian areas—mostly in the northern West Bank. Since October 7, 2023, at least 736 Palestinians and 23 Israelis have been killed in the West Bank, while attacks by Palestinians from the West Bank have (as of October 31, 2024) “resulted in the killing of 16 Israelis and eight Palestinian perpetrators.”¹⁵²

While PA President Abbas did not directly denounce the October 7 attacks, he has been cited as saying that he rejects the killing or abusing of civilians “on both sides,” and has blamed Hamas for providing Israel with “pretexts” for war.¹⁵³ In addition, Abbas’s Fatah faction publicly criticized Iran in April for trying to destabilize the West Bank, and said it would act against any outside interference aimed at harming security forces or national institutions.¹⁵⁴ Polls show a

148 Mark Mazzetti and Ronen Bergman, “‘Buying Quiet,’ Inside the Israeli Plan That Propped Up Hamas,” New York Times, December 10, 2023; “Qatar sent millions to Gaza for years – with Israel’s backing. Here’s what we know about the controversial deal,” CNN, December 12, 2023.

149 Aluf Benn, “Israel’s Self-Destruction,” Foreign Affairs, March/April 2024.

150 Shayndi Raice and Fatima Abdulkarim, “Palestinian Authority Fights Its Own,” Wall Street Journal, September 6, 2023; Patrick Kingsley, “Israeli Guard Is Shot Dead After Settler Kills Palestinian,” New York Times, August 6, 2023.

151 “Palestinian gunmen say they’re fighting for Jenin, not foreign backers,” Reuters, August 14, 2023; Udi Dekel, “The Lion’s Den: A Wake-Up Call for Imminent Challenges,” Institute for National Security Studies, October 19, 2022.

152 UN-OCHA, “Humanitarian Situation Update #234 | West Bank,” October 31, 2024.

153 “President Abbas discusses difficult developments in Palestine with Venezuelan counterpart,” WAFA News Agency, October 16, 2023; “Palestinian president blames Hamas for continuing war in Gaza,” Reuters, July 13, 2024.

154 “Palestinian Fatah group says Iran trying to spread chaos in West Bank,” Reuters, April 3, 2024.

Israel: Major Issues and U.S. Relations

Congressional Research Service 24

spike in West Bank Palestinian support for Hamas that may stem from Hamas’s military actions, prisoner releases it has secured, and civilian suffering in Gaza.¹⁵⁵

Palestinian militant activity and Israeli/PA responses. According to media reports, various Palestinian militant groups (including Hamas and Palestine Islamic Jihad, another FTO) receive small arms and some more advanced weapons via a network that includes a land corridor “along two paths from Iran through Iraq, Syria, Lebanon, Jordan and Israel,” and uses Bedouin smugglers, trucks, and commercial drones.¹⁵⁶ Israel’s military has reportedly conducted strikes against individuals or groups in Syria that are allegedly part of the network.¹⁵⁷ In August and September 2024, Israeli forces conducted a major operation against militants in the northern West Bank amid heightened Israeli fears that terrorist attacks from the West Bank could become another front,¹⁵⁸ though West Bank militants reportedly spend most of their time on defensive measures and lack the “discipline, structure and rocket arsenals” of Hamas or Hezbollah.¹⁵⁹

Amid these tensions and fairly regular Israeli security operations in areas normally administered by the PA, PA security forces face significant difficulties in maintaining a public profile because doing so could be perceived as siding with Israel against their own people. In separate instances in February and March, off-duty PA security force members killed or wounded Israelis in the West Bank.¹⁶⁰ With PA forces generally avoiding militant-dominated refugee camps and city centers in the northern West Bank, Israeli forces reportedly aim to prevent militants from establishing “command centers, explosives labs and underground facilities.”¹⁶¹

In October 2024, PA forces reportedly began a focused effort in the northern West Bank city of Tubas to improve law and order, counter Iran-backed militants, and deny Israel pretexts to conduct raids. One media account portrayed the operations as a bid by President Abbas to answer critics who have dismissed the PA as insufficiently capable to address security and governance in the West Bank, let alone Gaza.¹⁶²

Israeli settlement activity, violence involving extremists and security forces, and U.S. responses. Since October 7, 2023, U.S. officials and some lawmakers have signaled concerns related to Israeli actions in the West Bank that may endanger Palestinians’ lives or property and affect future political outcomes.¹⁶³ According to UN officials, access restrictions and settlers’ actions against Palestinians or their property since October 7, 2023, have displaced around 1,700

155 Palestinian Center for Policy and Survey Research, “Public Opinion Poll No. 93,” published September 17, 2024.

156 Farnaz Fassihi et al., “Iran is Flooding the West Bank with Weapons,” New York Times, April 10, 2024; Sune Engel Rasmussen and Benoit Faucon, “Weapons Flood Israel’s West Bank, Fueling Fears of New War Front,” Wall Street Journal, October 25, 2023.

157 Fassihi et al., “Iran is Flooding the West Bank with Weapons.”

158 Patrick Kingsley, “Palestinian Militants in West Bank Flex New Capabilities, Adding to Spiral of Violence,” New York Times, September 10, 2024; Neomi Neumann, “Prioritizing the West Bank Amid Escalation and Deterioration,” Washington Institute for Near East Policy, August 30, 2024.

159 Claire Parker, “What we know about West Bank militant organizations and their abilities,” Washington Post, August 29, 2024; Jared Malsin, “Israel’s Military Says It Killed Five Gunmen Hiding in West Bank Mosque,” Wall Street Journal, August 29, 2024.

160 “Terrorist behind Jordan Valley shooting turns himself in,” Israel Hayom, March 31, 2024; Emanuel Fabian, “Rabbi, teen hitchhiker killed in terror shooting at West Bank gas station,” Times of Israel, February 29, 2024.

161 Steven Erlanger and Sergey Ponomarev, “Palestinian Fighters in West Bank Seek to Emulate Hamas in Gaza,” New York Times, July 1, 2024.

162 “Palestinian Authority treads tightrope in West Bank crackdown on militants,” Reuters, October 24, 2024.

163 Department of State Press Briefing, November 4, 2024; Senate Foreign Relations Committee, “Chairs Cardin, Reed, and Warner Urge Biden-Harris Administration to Continue to Act Against Extremist Violence in the West Bank,” September 27, 2024.

Israel: Major Issues and U.S. Relations

Congressional Research Service 25

people,¹⁶⁴ and Israeli authorities have displaced over 4,600 more.¹⁶⁵ One Israeli media account said in November 2024 that many Israeli officials “have acknowledged that enforcement against low-grade Jewish attacks on Palestinians and their property has always been weak” and has gotten worse under National Security Minister Ben Gvir.¹⁶⁶ After a U.S. citizen was killed by gunfire at a West Bank demonstration in September, Secretary of State Blinken said, “The Israeli security forces need to make some fundamental changes in the way they operate in the West Bank, including changes in their rules of engagement.”¹⁶⁷

On February 1, 2024, President Biden issued Executive Order 14115, authorizing “financial sanctions against those directing or participating in certain actions, including acts or threats of violence against civilians, intimidating civilians to cause them to leave their homes, destroying or seizing property, or engaging in terrorist activity in the West Bank.”¹⁶⁸ Pursuant to this executive order, the Administration has imposed sanctions (including visa bans) on some Israeli settlers, as well as a number of outposts (which are settlements that are illegal under Israeli law) and other entities, including companies that play a role in settlement development and construction.¹⁶⁹ (The Administration also has imposed sanctions under this executive order on Lions’ Den, a militant Palestinian group centered in Nablus.)¹⁷⁰ Other countries or multinational organizations, such as the United Kingdom and European Union, also have imposed sanctions on some Israeli settlers or related organizations.¹⁷¹ Some Members of Congress have requested that the Administration sanction Ministers Smotrich and Ben Gvir and additional entities that may destabilize the West Bank “by promoting settler violence and dispossession of Palestinian communities and through other means.”¹⁷²

Netanyahu has called U.S. sanctions unnecessary because he asserted that “Israel acts against all Israelis who break the law, everywhere.”¹⁷³ A January 2024 analysis by one Israeli human rights advocacy group, using data since 2005, assessed that for more than 80% of complaints alleging Israeli settler violence against Palestinians, Israeli police closed the investigations after failing either to collect sufficient evidence or identify perpetrators, despite the likelihood of the

164 UN-OCHA, “West Bank | Casualties, Property Damage and displacement - October 2024,” November 12, 2024. See also, “Residents of West Bank town say deadly settler attack was ‘most vicious’ yet,” CNN, August 17, 2024.

165 UN-OCHA, “West Bank | Casualties, Property Damage and displacement - October 2024,” November 12, 2024.

166 Yonah Jeremy Bob, “How has Maj. Gen. Avi Bluth handled extremism, terrorism in the West Bank? – analysis,” Jerusalem Post, November 28, 2024. See also, “Defense minister declares end to administrative detention against West Bank settlers,” Times of Israel, November 22, 2024.

167 Michael Birnbaum and Loveday Morris, “U.S. demands IDF change West Bank operations after American’s killing,” Washington Post, September 10, 2024.

168 “Executive Order 14115 of February 1, 2024: Imposing Certain Sanctions on Persons Undermining Peace, Security, and Stability in the West Bank,” Federal Register, Vol. 89, No. 24, February 5, 2024, pp. 7605-7608.

169 Department of State, “Announcement of Further Measures to Promote Peace, Security, and Stability in the West Bank,” February 1, 2024; “Imposing Further Sanctions to Promote Peace, Security, and Stability in the West Bank,” March 14, 2024; “Designations Related to Destabilizing Activities Affecting the West Bank,” April 19, 2024; “Designation of Individuals and Entities Contributing to Violence and Instability in the West Bank,” July 11, 2024; “Sanctions on One Entity and Two Individuals Undermining Peace, Security, and Stability in the West Bank,” October 1, 2024; “Imposing Sanctions for Dispossession and Violence in the West Bank,” November 18, 2024.

170 Department of State, “Sanctioning Violent Palestinian Group in the West Bank,” June 6, 2024.

171 UK Government, “UK sanctions extremist settlers in the West Bank,” February 12, 2024; Council of the European Union, “Extremist settlers in the occupied West Bank and East Jerusalem: Council sanctions four individuals and two entities over serious human rights abuses against Palestinians,” April 19, 2024.

172 Representative Rosa DeLauro, “DeLauro, Van Hollen, Durbin, Casten Lead More than 80 Lawmakers in Bicameral Push Urging Biden Administration to Sanction Members of the Netanyahu Government, Others for Actions to Incite Violence, Expand Settlements in the West Bank,” November 14, 2024.

173 Assa Sasson and Hagar Shezaf, “Explainer: Who Are the Israeli Settlers Sanctioned by the U.S. and What Does Their Targeting Mean?” Haaretz, February 7, 2024.

Israel: Major Issues and U.S. Relations

Congressional Research Service 26

complaints’ validity.¹⁷⁴ Israeli banks have blocked accounts of individuals designated for U.S. sanctions, triggering protests from Finance Minister Smotrich. The Bank of Israel has acknowledged that banks may feel a need to comply with foreign sanctions because of concerns that non-compliance could affect the Israeli economy’s functioning and relationship with the global economy.¹⁷⁵

In February, Secretary Blinken announced that new Israeli settlements in the West Bank are “inconsistent with international law.”¹⁷⁶ His statement indicated that the Biden Administration was reinstating a U.S. legal position dating from 1978 that had been invalidated in 2019 by the Trump Administration.¹⁷⁷ Secretary Blinken’s remarks came shortly after Minister Smotrich announced that Israel would advance plans to construct over 3,000 West Bank settlement units in response to a deadly Palestinian militant attack near Ma’ale Adumim (a large Israeli settlement).¹⁷⁸ In 2023, Israel encountered significant U.S. criticism after the planning committee led by Smotrich advanced plans to construct more than 12,000 additional settlement units and begin a process to retroactively legalize nine outposts.¹⁷⁹ In April 2024, reports surfaced that Smotrich reportedly had instructed several Israeli government ministries to begin preparing to provide various public services to up to 68 outposts while he seeks to legalize them under Israeli law.¹⁸⁰ In response, a Department of State spokesperson said that the Administration believes directives to support illegal outposts in the West Bank to be “dangerous and reckless,” and that Israeli efforts seeking to expand outposts would work against regional peace and stability.¹⁸¹

In June 2024, at the same time it approved the easing of certain financial restrictions on the PA, Israel’s security cabinet approved Israel’s legalization of five West Bank outposts, and the advancement of plans for thousands of new homes in settlements.¹⁸² In July, a Department of State spokesperson said that “we view the expansion of settlements … and outposts as inconsistent with international law, and again, we view these as something that only serves to weaken Israel’s security. Unilateral actions like settlement expansion and legalization of outposts,

174 Yesh Din, “Data Sheet, December 2023: Law Enforcement on Israeli Civilians in the West Bank (Settler violence) 2005-2023,” January 21, 2024, at https://s3.eu-west-1.amazonaws.com/files.yesh-din.org/data+sheet+2023/YeshDin+- +Netunim+2023+-+ENG_04.pdf. According to the Department of State’s 2023 Country Reports on Human Rights Practices for the West Bank and Gaza, “Israeli authorities operating in the West Bank took some steps to identify and punish officials accused of committing human rights abuses, but human rights groups frequently asserted authorities did not adequately pursue investigations and disciplinary actions related to human rights abuses against Palestinians, including actions to stop or punish violence and acts of terror committed by Israeli settlers in the West Bank.”

175 Sasson and Shezaf, “Explainer: Who Are the Israeli Settlers Sanctioned by the U.S. and What Does Their Targeting Mean?”

176 Department of State, “Secretary Antony J. Blinken and Argentine Foreign Minister Diana Mondino at a Joint Press Availability,” February 23, 2024.

177 Department of State, “Secretary Michael R. Pompeo Remarks to the Press,” November 18, 2019, available at https://2017-2021.state.gov/secretary-michael-r-pompeo-remarks-to-the-press/.

178 Jacob Magid, “US revives policy deeming settlements illegal, pans Israel’s plan for 3,000 new homes,” Times of Israel, February 23, 2024.

179 Ibid.; Department of State, “Israeli Settlement and Outpost Legalization Announcement,” February 13, 2023. Israel announced the legalization of three of the nine outposts in September 2023 in the face of U.S. criticism. Jacob Magid, “US slams legalization of 3 West Bank outposts ‘previously illegal under Israeli law,’” Times of Israel, September 8, 2023.

180 Elizabeth Hagedorn, “US slams Smotrich’s ‘reckless’ effort to legalize West Bank outposts,” Al-Monitor, April 24, 2024.

181 Department of State Press Briefing, April 24, 2024.

182 “Smotrich extends waiver allowing Israeli, Palestinian banks to cooperate,” Reuters/Times of Israel, June 30, 2024.

Israel: Major Issues and U.S. Relations

Congressional Research Service 27

they are detrimental to a two-state solution. So we’ll continue to use the tools at our disposal to expose and promote accountability for those who threaten peace and stability in the region.”¹⁸³

PA Strength and Viability: West Bank, Gaza, and Potential Statehood

Uncertainty surrounds the future of the PA in both the West Bank and Gaza, given ongoing conflict and debate—involving Israel, the PA, the United States, various Arab states, and other international actors—about potential non-Hamas security and governance options, as well as measures affecting PA finances. Prior to October 7, speculation was already rife about the PA’s continuing viability and future leadership. The outbreak of conflict between Israel and Hamas, the scale of devastation in Gaza, and ongoing violence and a worsening economy in the West Bank have made the relevant factors and calculations involved in these matters more challenging and complex.

U.S. call for revamped PA and eventual statehood. U.S. officials have publicly pushed for a cease-fire in Gaza that could eventually facilitate the orderly handover of governance to a “reformed” PA and “an over the horizon process that includes a vision for a demilitarized Palestinian state.”¹⁸⁴ The Administration also has reportedly discussed with some Arab states the conditions under which they might consider joining a peacekeeping force for Gaza—not including U.S. or European troops—until a credible Palestinian security alternative is established.¹⁸⁵ The U.S. Security Coordinator for Israel and the PA (USSC), a multilateral mission headed by a three-star U.S. flag officer, could conceivably conduct training in Jordan and/or the West Bank for a local Palestinian force for Gaza.¹⁸⁶

In explaining the U.S. veto in April of a draft U.N. Security Council resolution on Palestinian membership in the U.N., Assistant Secretary of State for Near East Affairs Barbara Leaf reiterated the Biden Administration’s support in principle for Palestinian statehood, while saying:

we believe strongly – and this has been the case across multiple successive administrations – that a Palestinian state is something that should be negotiated … to go through the effort to proffer membership to a state that doesn’t in fact exist, where the borders have not been delineated, and a whole series of final status issues have not been negotiated simply makes no sense.¹⁸⁷

Netanyahu’s position. Prime Minister Netanyahu has insisted that Israel have full security control of “all territory west of the Jordan River,” and said that his years-long stance on the subject has prevented the establishment of a Palestinian state.¹⁸⁸ He also has publicly rejected having the PA replace Hamas in Gaza, arguing that the PA enables terrorism against Israel rhetorically and financially.¹⁸⁹ In his July 2024 speech to a joint session of Congress, Netanyahu

183 Department of State Press Briefing, July 2, 2024.

184 U.S. Embassy in Israel, “Ambassador Lew’s Remarks to the National Israel Mission of the Conference of Presidents,” February 18, 2024.

185 Andrew England and Felicia Schwartz, “US encouraging Arab states to join multinational postwar force in Gaza,” Financial Times, May 15, 2024.

186 Neri Zilber, “Israel tests Hamas-free ‘bubbles’ plan for post-war Gaza,” Financial Times, July 1, 2024. For background on the USSC and U.S. security assistance for the PA, see archived CRS Report RL34074, The Palestinians: Background and U.S. Relations, by Jim Zanotti.

187 Department of State, “Digital Press Briefing with the Assistant Secretary of State for Near Eastern Affairs Barbara Leaf,” April 24, 2024. Twelve U.N. Security Council members voted for the draft resolution; the United Kingdom and Switzerland abstained.

188 Israel Prime Minister’s Office, “Statement by PM Netanyahu,” January 21, 2024.

189 Benjamin Netanyahu, “Israel’s Three Prerequisites for Peace,” Wall Street Journal, December 26, 2023. The PA and Palestine Liberation Organization have made payments for decades to alleged militants and their families that (continued...)

Israel: Major Issues and U.S. Relations

Congressional Research Service 28

said that Israel does not seek to resettle Gaza, but “must retain overriding security control” for the “foreseeable future,” while also stating that “Gaza should have a civilian administration run by Palestinians who do not seek to destroy Israel.”¹⁹⁰ An Israeli media outlet provided information in November on new Israeli military infrastructure in Gaza indicating that the military could maintain a significant presence there through 2025 at least.¹⁹¹

PA position and questions regarding reform. PA President Abbas said in September 2024 that the PA is willing to exercise full jurisdiction over Gaza as part of a broader plan that would include holding “an international peace conference … within a year to implement a two-state solution.”¹⁹² According to one source, Abbas may be jockeying for position to prevent the installation of a non-PA entity to administer Gaza that U.S., Israeli, and UAE officials reportedly may have considered helping establish.¹⁹³

Tensions between the types of PA reforms that could appeal to Palestinian audiences and those sought by Israel and the United States to minimize threats to Israel from Palestinian militants may present challenges. A new PA prime minister and cabinet took office in March, but it is unclear whether these leadership changes can help counter the negative views held about the PA— according to a September poll—by 66% of Palestinians in the West Bank and Gaza.¹⁹⁴ Any PA policy steps apparently remain subject to President Abbas’s approval.¹⁹⁵ The prime minister, Muhammad Mustafa, promised PA reform and the creation of an independent agency to handle Gaza’s post-conflict recovery and reconstruction.¹⁹⁶ Mustafa has anticipated presidential and parliamentary elections with a timetable depending on “realities on the ground.”¹⁹⁷

Some analysts have surmised that factors contributing to the new government’s success and domestic acceptance could include its ability to raise sufficient revenue—including from Arab governments and other foreign sources—to cover PA salaries and benefits, and to reach understandings with Hamas elements in Gaza that could otherwise present obstacles to PA governance there.¹⁹⁸ In September, Saudi Arabia reportedly agreed to provide $60 million to the PA over a period of months, reversing a decision it made to stop funding to the PA during the Trump Administration.¹⁹⁹ As of December, Fatah and Hamas have reportedly made progress in deliberations about possible post-conflict administration in Gaza.²⁰⁰

many U.S. and Israeli officials and lawmakers argue provide incentives for terrorism against Israel, while also engaging in regular security coordination with Israel and the United States since 2007 to counter Hamas and other militants in the West Bank.

190 Israeli Prime Minister’s Office, “PM Netanyahu’s Address to a Joint Meeting of the US Congress,” July 24, 2024.

191 Yaniv Kubovich and Avi Scharf, “IDF Gearing Up to Remain in Gaza Until End of 2025, at Least. This Is What It Looks Like,” Haaretz, November 13, 2024.

192 “President Abbas at UN General Assembly: We demand suspension of Israel’s UN membership,” WAFA News Agency, September 26, 2024.

193 David Hearst, “US, Israel and UAE working to create new body to govern post-war Gaza,” Middle East Eye, July 28, 2024.

194 Palestinian Center for Policy and Survey Research, “Public Opinion Poll No. 93,” published September 17, 2024.

195 Carrie Kahn, “Palestinian Authority announces formation of a new cabinet amid reform pressures,” NPR, March 30, 2024.

196 “The new Palestinian prime minister maps out his vision for a path to peace,” Economist, March 17, 2024.

197 Ibid.

198 Steven Erlanger and Adam Rasgon, “Little Expected of Palestine’s Prime Minister,” New York Times, March 16, 2024; Patrick Kingsley, “Top Leaders in West Bank Step Down,” New York Times, February 27, 2024.

199 Adam Rasgon and Aaron Boxerman, “Saudi Arabia Pledges to Send Funding for Palestinians,” New York Times, September 30, 2024.

200 “Hamas, Fatah Agree Joint Committee to Run Post-war Gaza,” Agence France Presse, December 3, 2024.

Israel: Major Issues and U.S. Relations

Congressional Research Service 29

PA fiscal challenges. The PA regularly faces challenges in collecting revenue to keep pace with its expenses. Those challenges intensified when the following two major sources of revenue disappeared shortly after the Hamas-led October 7 attacks.

• Tax transfers. Under a 1994 agreement, Israel generally collects value added taxes and import duties on behalf of the PA for goods intended for the West Bank and Gaza, and transfers those amounts to the PA. These funds comprise approximately $188 million per month, about 64% of total PA revenue.²⁰¹ After October 7, Israel’s government determined that it would not transfer the roughly 30% of those revenues that would go toward payments that the PA still makes in Gaza (for salaries to employees that predated Hamas’s seizure of the territory, and some public services).²⁰² Various factors, including PA President Abbas’s initial refusal to accept partial transfers, held up most Israeli tax transfers to the PA until June 2024.²⁰³

• Israel-based employment. In the wake of the October 7 attacks, Israel suspended work permits for the roughly 150,000 West Bank Palestinians that had been commuting to Israel for work.²⁰⁴ West Bank Palestinian unemployment, which had previously been at around 15%, has more than doubled to over 30%. The earnings of those working in Israel had totaled 25% of West Bank Palestinian gross domestic product.²⁰⁵ Some sectors of Israel’s economy largely dependent on Palestinian workers, particularly construction, have struggled. Israel has debated the possible security and economic trade-offs of readmitting the workers, and has taken steps to recruit potential replacement workers from other foreign countries.²⁰⁶

Facing a 2023-2024 contraction in West Bank economic output and the disruption of tax transfers,²⁰⁷ the PA reportedly reduced public salaries to 50%-70% of their normal levels.²⁰⁸ Were such a situation to become entrenched, it could pose questions regarding economic and political stability in PA-administered areas of West Bank, and also the PA’s ability to prepare for potential future responsibilities in Gaza.

Uncertainty about revenue transfers and a waiver to maintain access for Palestinian banks to the international financial system via Israel could potentially recur amid ongoing Israel-PA disputes.

201 Alasdair Soussi and Zena Al Tahhan, “How Israel controls $188m of Palestinian money every month,” Al Jazeera, January 23, 2024.

202 “Israel cuts Gaza funds from Palestinian tax transfer,” Reuters, November 2, 2023.

203 “Smotrich extends waiver allowing Israeli, Palestinian banks to cooperate,” Reuters/Times of Israel, June 30, 2024; “Palestinians refuse to accept partial tax transfer from Israel,” Reuters, November 6, 2023.

204 According to one article, “Of the approximately 150,000 Palestinians who had been working in Israel beforehand, only about 8,000 have been designated as performing critical jobs, which grants them permission to enter Israel. This includes those working in the food sector, in grave-digging and in sanitation. (In addition, due to pressure from the settlers, another 10,000 have long been allowed to work in settlement industrial zones, despite the security risk.)” Amos Harel, “Israeli Efforts to Weaken the Palestinian Authority Could Shatter the Limited Calm in the West Bank,” Haaretz, May 30, 2024.

205 Galit Altstein, “Israel’s Ban on Palestinian Workers Is Hurting Both Economies,” Bloomberg, March 19, 2024.

206 Ibid.; Tzvi Joffre, “Netanyahu expected to present possible return of Palestinian workers to cabinet,” Jerusalem Post, March 19, 2024.

207 Omar Abdel-Baqui, “The West Bank Is on the Edge of Economic Collapse,” Wall Street Journal, November 5, 2024; World Bank Economic Monitoring Report, Impacts of the Conflict in the Middle East on the Palestinian Economy, May 2024.

208 Neomi Neumann, “West Bank Economics Are Key to Stabilizing the Palestinian Authority—or Forcing Its Collapse,” Washington Institute for Near East Policy, May 31, 2024.

Israel: Major Issues and U.S. Relations

Congressional Research Service 30

At the end of October 2024, the Israeli government extended the bank waiver for a month— through November. In a joint statement, Secretary Blinken and Secretary of the Treasury Janet Yellen expressed concern at the short-term duration of the extension, saying:

Cutting off these banking ties would create significant economic turmoil in the West Bank, threatening the security of Israel and the broader region. Our deep concern is shared by the G7 and many of our closest partners…. The U.S. Government calls for the Government of Israel to swiftly extend the indemnification for these essential banking relationships for at least one year. We also call for future renewals to be transparent, predictable, and de- politicized.²⁰⁹

At the end of November, Israel’s security cabinet extended the waiver for one year (until the end of November 2025), reportedly after the Biden Administration assured Israel that it would not permit any UN Security Council resolution to recognize a Palestinian state during the remainder of President Biden’s term.²¹⁰

Incoming Administration and Congress

Decisions by the incoming Administration and Congress could affect the trajectory of a number of Israeli-Palestinian issues, including security and governance in Gaza and the West Bank, the role of the PA, the potential for Israeli settlement expansion or annexation in the West Bank, and possible negotiations aimed at resolving aspects of Israeli-Palestinian conflict. The Trump Administration (2017-2021) addressed some of these issues (see the timeline below), and depending on various factors, the incoming Administration and Congress could seek to revisit, reemphasize, repurpose, build upon, or advance alternatives to elements of the 2020 peace plan and other past initiatives. While regional context has changed significantly since the Hamas-led attacks of October 7, 2023, ushered in a new era of conflict between Israel and its backers (including the United States) against Iran and its axis of resistance, some matters relevant to Israeli-Palestinian relations feature elements of continuity. These include debates regarding the status of contested West Bank areas, as well as dialogue involving Israel, the United States, and Arab states (including Saudi Arabia) about the substance and sequencing of steps to improve Israel-Arab relations in parallel with efforts to address Palestinian demands for self- determination.

Trump Administration: Selected Actions Impacting Israeli-Palestinian Issues

December 2017 President Trump recognizes Jerusalem as Israel’s capital, prompting the PLO and PA to cut off high-level diplomatic relations with the United States.

May 2018 The U.S. embassy to Israel opens in Jerusalem.

August 2018 The Administration ends U.S. contributions to UNRWA. (The Biden Administration resumed contributions to UNRWA in 2021, before suspending them in January 2024 when allegations surfaced that some UNRWA employees may have participated in the October 2023 attacks against Israel.)

September 2018 The Administration announces the closure of the PLO office in Washington, DC.

January 2019 As a result of the Anti-Terrorism Clarification Act of 2018 (P.L. 115-253), the Administration ends all bilateral U.S. aid to the Palestinians. (An amendment to some provisions of this act in 2020 facilitated the resumption of bilateral aid in 2021 during the Biden Administration.)

209 Department of State, “United States Government’s Response to Israel’s Cabinet Decision on Extending the Indemnification for Correspondent Banking between Israel and the West Bank,” October 31, 2024.

210 Barak Ravid, “Israeli cabinet votes to extend Palestinian bank relations for one year,” Axios, November 28, 2024.

Israel: Major Issues and U.S. Relations

Congressional Research Service 31

March 2019 The U.S. consulate general in Jerusalem—previously an independent diplomatic mission to the Palestinians—is subsumed under the authority of the U.S. embassy to Israel. President Trump recognizes Israeli sovereignty claims in the Golan Heights.

November 2019 Secretary of State Michael Pompeo says that the Administration disagrees with a 1978 State Department legal opinion stating that Israeli settlements in the West Bank are inconsistent with international law. (Current Secretary of State Antony Blinken apparently reversed Pompeo’s action in February 2024.)²¹¹

January 2020 President Trump releases Israeli-Palestinian peace proposal that largely favors Israeli positions and contemplates possible U.S. recognition of Israeli annexation of some West Bank areas.

August 2020 Israel and the UAE announce the first of four cases in which the Trump Administration facilitates some normalization of Israel’s relations with Arab states (Bahrain, Sudan, and Morocco follow). Israel suspends consideration of West Bank annexation for four years in connection with the UAE deal.

October 2020 The United States and Israel sign agreements removing restrictions on three binational foundations from funding projects in areas administered by Israel after the 1967 Arab-Israeli War. The foundations are the Binational Industrial Research and Development Foundation (BIRD), the Binational Science Foundation (BSF), and the Binational Agricultural Research and Development Foundation (BARD).

November 2020 Secretary Pompeo announces a change in U.S. product labeling regulations, requiring products from Israeli settlements in the West Bank to be identified as coming from Israel.

As released and summarized, the 2020 peace plan suggested the following key outcomes for future Israeli-Palestinian negotiations:²¹²

• Borders and settlements. Israel would acquire sovereignty over about 30% of the West Bank, including settlements and most of the Jordan Valley. The Palestinians could eventually acquire a form of sovereignty over the remaining territory—with a number of non-contiguous areas (delineated in conceptual maps) connected by roads, bridges, and tunnels. In explaining the plan, President Trump said it included a process by which U.S. and Israeli officials could identify areas of the West Bank so that U.S. recognition of Israeli sovereignty in those areas “could be immediately achieved,” and he also stated that the Palestinians would have four years to negotiate with Israel and achieve the criteria for statehood.

• Jerusalem and its holy sites. Israel would have sovereignty over nearly all of Jerusalem, with the Palestinians possibly able to exercise control over and establish a future capital in some small East Jerusalem areas on the other side of an Israeli security barrier. The “status quo” prohibiting non-Muslim worship on the Temple Mount/Haram al Sharif would continue, along with Jordan’s custodial role regarding Muslim holy sites.

211 Department of State, “Secretary Antony J. Blinken and Argentine Foreign Minister Diana Mondino at a Joint Press Availability,” February 23, 2024.

212 Archived documents available at https://trumpwhitehouse.archives.gov/wp-content/uploads/2020/01/Peace-to- Prosperity-0120.pdf; https://trumpwhitehouse.archives.gov/briefings-statements/president-donald-j-trumps-vision- peace-prosperity-brighter-future-israel-palestinian-people/; and https://trumpwhitehouse.archives.gov/briefings- statements/remarks-president-trump-prime-minister-netanyahu-state-israel-joint-statements/.

Israel: Major Issues and U.S. Relations

Congressional Research Service 32

• Security. Israel would retain overall security control over the entire West Bank, with the potential for Palestinians to assume more security responsibility over time in territory that they administer.

• Palestinian refugees. Palestinian refugee claims would be satisfied through internationally funded compensation and resettlement outside of Israel (i.e., no “right of return”) in the West Bank, Gaza, and third-party states.

• Palestinian statehood and international investment. The Palestinians could obtain a demilitarized state within areas they administer or acquire, with a capital in Abu Dis or elsewhere straddling the East Jerusalem areas mentioned above and their outskirts. Statehood would depend on the PLO and PA meeting specified criteria within four years that could present considerable domestic challenges, including but not limited to disarming Hamas in Gaza, ending certain political initiatives within international organizations and financial incentives for violence, and recognizing Israel as “the nation state of the Jewish people.” Reaching an agreement with Israel and enacting various domestic reforms would apparently be preconditions for a new Palestinian state to benefit from up to $50 billion in major international investment.

PLO Chairman and PA President Mahmoud Abbas categorically rejected the 2020 plan, in line with previous PLO/PA statements asserting that actions by the Trump Administration had undermined Palestinian positions, and in the context of domestic Palestinian polling indicating opposition to U.S. efforts.²¹³

In May 2020, then-U.S. Ambassador to Israel David Friedman said that Trump Administration approval of any Israeli declaration of sovereignty over West Bank areas, per U.S.-Israel mapping discussions, would depend on

• Israel agreeing to freeze construction for four years in areas outside of those earmarked for annexation; and

• Israel’s prime minister agreeing to “negotiate with the Palestinians and invite the Palestinians to meet, to engage in discussions and keep those discussions open, and pursue them in good faith, for four years.”²¹⁴

As mentioned in the timeline above, in August 2020 Israel agreed to suspend consideration of possible West Bank annexation for four years in exchange for its normalization of relations with the UAE.

213 “Palestinians angrily reject Trump Mideast peace plan,” Associated Press, January 28, 2020; Adam Rasgon, “Savaging Trump peace plan, Palestinians again threaten to dissolve PA,” Times of Israel, January 26, 2020; Palestinian Center for Policy and Survey Research, “Public Opinion Poll No. 74,” published December 25, 2019.

214 Ariel Kahana, “‘For Israel to give up Hebron and Beit El is like the US giving up the Statue of Liberty,’” Israel Hayom, May 8, 2020.