Israel: Background and U.S. Relations
Jim Zanotti
Specialist in Middle Eastern Affairs
July 22, 2014
Congressional Research Service
7-5700
www.crs.gov
RL33476
Israel: Background and U.S. Relations
Summary
The initial section of this report provides ongoing information and analysis on the July 2014
Israel-Gaza conflict.
Since Israel’s founding in 1948, successive U.S. Presidents and many Members of Congress have
demonstrated a commitment to Israel’s security and to maintaining close U.S.-Israel defense,
diplomatic, and economic cooperation. U.S. and Israeli leaders have developed close relations
based on common perceptions of shared democratic values and religious affinities. U.S. policy
makers often seek to determine how events and U.S. policy choices in the Middle East may affect
Israel’s security, and Congress provides active oversight of executive branch dealings with Israel
and other actors in the region. Some Members of Congress and some analysts criticize what they
perceive as U.S. support for Israel without sufficient scrutiny of its actions or their implications
for U.S. interests. Israel is a leading recipient of U.S. foreign aid and is a frequent purchaser of
major U.S. weapons systems. The United States and Israel maintain close security cooperation—
predicated on a U.S. commitment and legal requirement to maintain Israel’s “qualitative military
edge” over other countries in its region. The two countries signed a free trade agreement in 1985,
and the United States is Israel’s largest trading partner. For more information, see CRS Report
RL33222, U.S. Foreign Aid to Israel, by Jeremy M. Sharp.
Israel has many regional security concerns. By criticizing the international interim agreement on
Iran’s nuclear program that went into effect in January 2014, Prime Minister Binyamin
Netanyahu may seek to give Israel a voice in an ongoing negotiating process in which it does not
directly participate. In addition to concerns over Iran, Israel’s perceptions of security around its
borders have changed since early 2011 as several surrounding Arab countries—including Egypt
and Syria—have experienced political upheaval. Israel has shown particular concern about threats
from Hezbollah, the Islamic State, and other non-state groups in ungoverned or minimally
governed areas in Syria, Lebanon, and Egypt’s Sinai Peninsula, as well as from Hamas and other
Palestinian militants in the Gaza Strip.
Israel’s political impasse with the Palestinians continues, and the most recent round of talks ended
unsuccessfully in April 2014. Since the end of the 1967 Arab-Israeli War, Israel has militarily
occupied the West Bank, with the Palestinian Authority exercising limited self-rule in some areas
since 1995. Israeli settlement of that area, facilitated by successive Israeli governments, has
resulted in a population of approximately 500,000 Israelis living in residential neighborhoods or
settlements in the West Bank and East Jerusalem. These settlements are of disputed legality under
international law. Israel considers all of Jerusalem to be the “eternal, undivided capital of Israel,”
but Palestinians claim a capital in East Jerusalem and some international actors advocate special
political classification for the city or specific Muslim and Christian holy sites. Although Israel
withdrew its permanent military presence and its settlers from the Gaza Strip in 2005, it still
controls most access points and legal commerce to and from the territory.
Despite its unstable regional environment, Israel has developed a robust diversified economy and
a vibrant democracy. Recent discoveries and exploitation of offshore natural gas raise the
prospect of a more energy-independent future, while economic debates focus largely on cost-of-
living and income and labor distribution issues. Israel’s demographic profile has evolved in a way
that appears to be affecting its political orientation, with various leaders vying for the public’s
support by interweaving ideology with ethnic, religious, socioeconomic, and national security
considerations.
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Israel: Background and U.S. Relations
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Israel: Background and U.S. Relations
Contents
July 2014 Israel-Gaza Conflict ........................................................................................................ 1
Background................................................................................................................................ 5
Assessment ................................................................................................................................ 6
U.S. Policy Issues ...................................................................................................................... 7
Introduction ...................................................................................................................................... 8
Country Background ........................................................................................................................ 9
Historical Overview ................................................................................................................... 9
Demographic and Political Changes........................................................................................ 10
Government and Politics ......................................................................................................... 11
Overview ........................................................................................................................... 11
Current Government .......................................................................................................... 14
Economy .................................................................................................................................. 16
In General .......................................................................................................................... 16
Natural Gas Resources and Export Possibilities ............................................................... 18
Israel’s Security Concerns ............................................................................................................. 23
General Threat Perceptions ..................................................................................................... 23
Challenges from Iran and Arab Neighbors .............................................................................. 24
Iran .................................................................................................................................... 26
Syria and Iraq .................................................................................................................... 28
Egypt ................................................................................................................................. 29
Rocket Threat from Lebanon and Gaza............................................................................. 30
The Palestinian Issue ............................................................................................................... 30
Concerns Regarding International Isolation and Economic Effects ........................................ 32
Key U.S. Policy Issues ................................................................................................................... 34
Overview ................................................................................................................................. 34
Security Cooperation ............................................................................................................... 35
Background ....................................................................................................................... 35
U.S.-Israel Strategic Partnership Act of 2014 ................................................................... 37
Preserving Israel’s Qualitative Military Edge (QME) ....................................................... 37
U.S. Security Guarantees? ................................................................................................. 39
U.S. Aid and Arms Sales to Israel ..................................................................................... 40
Iron Dome and Missile Defense Cooperation ................................................................... 41
Israeli-Palestinian Issues ......................................................................................................... 42
Peace Process Diplomacy .................................................................................................. 43
Jerusalem ........................................................................................................................... 47
Settlements ........................................................................................................................ 49
Sensitive Defense Technology and Intelligence Issues ........................................................... 51
Israeli Arms Sales to Other Countries ............................................................................... 51
End-Use Monitoring .......................................................................................................... 53
Espionage-Related Cases .................................................................................................. 53
Israel’s Nuclear Status and Non-Proliferation ......................................................................... 54
Bilateral Trade Issues .............................................................................................................. 55
Pending Visa Waiver Legislation ............................................................................................. 55
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Figures
Figure 1. Map of Gaza Strip ............................................................................................................ 2
Figure 2. Iron Dome ........................................................................................................................ 3
Figure 3. Approximate Range of Rockets from Gaza ...................................................................... 4
Figure 4. Map of Israel .................................................................................................................. 12
Figure 5. Israeli Knesset ................................................................................................................ 15
Figure 6. Eastern Mediterranean Energy Resources ...................................................................... 19
Tables
Table 1. Israeli Security Cabinet Members .................................................................................... 14
Table 2. Basic Facts ....................................................................................................................... 17
Table 3. U.S. Bilateral Aid to Israel ............................................................................................... 40
Table 4. Defense Budget Appropriations for U.S.-Israeli Missile Defense: FY2006-
FY2014 ....................................................................................................................................... 42
Appendixes
Appendix A. U.S.-Based Interest Groups Relating to Israel .......................................................... 57
Appendix B. Electoral Lists Represented in Knesset .................................................................... 58
Contacts
Author Contact Information........................................................................................................... 59
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July 2014 Israel-Gaza Conflict
Periodic violence between Palestinian militants in the Gaza Strip—including the Islamist group
Hamas—and Israel’s military became a larger conflict on July 6-7, 2014. Israel began a ground
operation in Gaza on July 17 with the stated objective of destroying tunnels used by militants to
infiltrate Israeli territory, though the extensive nature of Hamas’s underground infrastructure has
reportedly already drawn Israeli forces into some densely populated urban areas. Since the initial
escalation, Hamas and other Palestinian militants have reportedly launched approximately 1,800
rockets into Israel with longer ranges than in past conflicts,1 and Israel has conducted more than
2,000 strikes on various targets in Gaza. Rockets and/or mortars have also reportedly been fired
on Israeli-controlled territory from Lebanon, Syria, and Egypt’s Sinai Peninsula, in some cases
provoking Israeli retaliatory fire. Additionally, Israel has reportedly shot down two Hamas drone
aircraft and foiled a Hamas sea raid. As Israel’s military targets tunnels and other nodes of
Hamas’s underground Gaza network, reports indicate that the Hamas fighters’ anti-tank weaponry
and various means of close-quarters combat have proven substantially lethal and damaging.
Though casualty figures cannot be independently verified, apparently more than 500 Palestinians
have been killed, more than 3,500 injured, and more than 100,000 displaced. The United Nations
Office for the Coordination of Humanitarian Affairs asserts that a large majority of those killed
are civilians, and is documenting other indicators of humanitarian distress2 as reports indicate that
the U.N. is coordinating emergency shipments of food and other humanitarian aid to Gaza.
Twenty-nine Israelis, including two U.S.-Israeli dual citizens who served in the military, and two
civilians, have reportedly been killed, with several injuries reported. One Israeli soldier has been
reported missing in action, and Hamas has claimed that it captured an Israeli soldier. If true, this
could have implications for both sides, given Hamas's 2011 exchange of an Israeli soldier that had
been in its custody since 2006 (Gilad Shalit) to gain the release of more than 1,000 Palestinian
prisoners. Daily life on both sides faces continual disruption. Israel’s Iron Dome anti-rocket
system (see “Iron Dome and Missile Defense Cooperation” below) has reportedly intercepted
approximately 90% of rockets it classifies as threats to sensitive targets (including population
centers). As the conflict continued, Israel’s military has called up approximately 65,000 reserves.
1 According to the Economist, “Of the 11,000-odd rockets and missiles that Israeli intelligence rockets and missiles that
Israeli intelligence reckons that Hamas and other militant groups possessed at the start of Operation Protective Edge, as
Israel calls its current campaign, about 600 have a range of 75km, putting Tel Aviv under threat. Perhaps another 100
exceed 100km. This brings all of Israel’s biggest cities within Hamas’s reach, including Haifa and Jerusalem, where
sirens have gone off in the past week.” “When and how will it end?” Economist, July 19, 2014.
2 United Nations Office for the Coordination of Humanitarian Affairs, Occupied Palestinian Territory, Gaza
Emergency, Situation Report (as of July 21, 2014).
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Figure 1. Map of Gaza Strip
Source: U.N. Office for the Coordination of Humanitarian Affairs and UNOSAT, with additional data from
UNRWA; adapted by CRS.
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Figure 2. Iron Dome
Source: Washington Post.
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Figure 3. Approximate Range of Rockets from Gaza
Source: New York Times, July 2014.
Despite U.S. and international calls and efforts to end the violence, including U.N. Security
Council statements on July 12 and July 21, hostilities have continued to date. On July 15, Israel
reportedly accepted an Egyptian proposal that would have temporarily halted violence pending
negotiation of a comprehensive cease-fire, but Hamas and other Palestinian militants balked at the
proposal.
On July 11, the House passed a resolution (H.Res. 657) calling on Hamas to immediately cease
all attacks and expressing its support for Israel’s right to defend itself. A similar resolution passed
the Senate (S.Res. 498) on July 17, with a provision calling on Palestinian Authority (PA)
President and Fatah leader Mahmoud Abbas to dissolve the PA government formed in early June
2014 in consensus with Hamas.
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Background
The current violence occurs within a political context marked by increased Israeli-Palestinian
tensions. These tensions have been fueled by, among other factors, mutual recriminations
surrounding the unsuccessful end to a round of U.S.-backed negotiations in April 2014 (see “July
2013-April 2014 Israeli-Palestinian Talks” below), and the June formation of the PA consensus
government.
In mid-June, Israel carried out numerous raids and detentions in the West Bank after the
abduction of three Israeli teenagers. Daily Palestinian rocket barrages followed against Israel
from Gaza (initially
reportedly led by non-
Major Israel-Hamas Conflicts Since 2008
Hamas groups such as
December 2008-January 2009: Israeli codename “Operation Cast Lead”
Palestine Islamic Jihad—
Shaqaqi Faction). After
•
Three-week duration, first meaningful display of Palestinians’ Iranian-
the teenagers were found
origin rockets, Israeli air strikes and ground offensive
murdered on June 30, and
•
Political context: Impending leadership transitions in Israel and United
the two Palestinian
States; struggling Israeli-Palestinian peace talks (Annapolis process)
suspects (to date still at
•
Fatalities: More than 1,100, possibly more than 1,400 Palestinians; 13
large) were claimed by
Israelis (3 civilians)
Israel to have Hamas
November 2012: Israeli codename “Operation Pillar of Defense (or Cloud)”
connections (though
Hamas denies
•
Eight-day duration, Palestinian projectiles of greater range and variety,
responsibility), Israeli
Israeli airstrikes, prominent role for Iron Dome
Prime Minister Binyamin
•
Political context: Widespread Arab political change, including rise of
Netanyahu vowed a
Muslim Brotherhood to power in Egypt; three months before Israeli
strong response. On July
elections
2, a Palestinian teenager
•
Fatalities: More than 100 Palestinians, 6 Israelis (4 civilians)
in Jerusalem unconnected
July 2014: Israeli codename “Operation Protective Edge/Mighty Cliff”
with the incident was
•
burned to death—
Escalated July 6-7, Palestinian projectiles of greater range and variety,
Israeli air strikes, prominent role for Iron Dome, Israeli ground
allegedly in retaliation—
operation began July 17.
by a group of Jewish
•
Israeli extremists. Despite
Political context: Shortly after (1) unsuccessful round of Israeli-
Palestinian peace talks, (2) PA consensus government formation and end
Netanyahu’s public
of Hamas’s formal responsibilities for governing Gaza, (3) prominent
condolences for the death
youth killings.
of the Palestinian youth
and the subsequent arrest
and confession of three suspects, Palestinian protests (which have since abated) broke out in East
Jerusalem and several Israeli towns with large Arab communities, and Israel-Gaza violence
continued. After a July 6 Israeli air strike against a tunnel leading from Gaza to Israel reportedly
killed six Hamas operatives, Hamas actively took the lead in conducting rocket attacks on Israel,
and the conflict escalated.3
3 Adnan Abu Amer, “Hamas readies for Israeli ground offensive with tunnels, traps,” Al-Monitor Palestine Pulse, July
9, 2014.
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Assessment
This is the third major conflict between Israel and Hamas in the past six years (see textbox
above). Though distinct, each arguably has featured mutual tests of military capability, domestic
political cohesion, and deterrence in times of political change.
Each of the three conflicts has also featured heated debate over respective culpability and the
targeting or reckless endangerment of civilians. Though evidence is difficult to locate that
definitively reveals how various parties are treating civilians in this conflict, video or eyewitness
documentation appears to exist for multiple instances in which apparent Israeli strikes have killed
and injured civilians.4 Israeli officials insist that they are taking measures to minimize civilian
casualties, in some cases calling off strikes because of targets’ proximity to civilians. On July 16,
the U.N. Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) discovered
20 rockets hidden—possibly by Palestinian militants—at one of its schools in Gaza. In a press
release, UNRWA strongly condemned “the group or groups responsible for placing the weapons
in one of its installations. This is a flagrant violation of the inviolability of its premises under
international law. This incident, which is the first of its kind in Gaza, endangered civilians
including staff and put at risk UNRWA’s vital mission to assist and protect Palestine refugees in
Gaza.”5
With regard to the possible political objectives of the conflict, Israel appears to be seeking to
deter Hamas and hold it and/or PA President Abbas accountable for threats to Israel resulting from
Gaza’s complex political, social, and economic dysfunction.6 In addition to Hamas’s long-
standing demands to have Israeli and Egyptian restrictions on access to and from Gaza
significantly eased, the group may be trying to show Israel that recent political setbacks7 have not
weakened its military capabilities. It may also be striving to reinforce its credentials as a
resistance movement in order to gain politically at Abbas’s expense and stave off challenges from
other armed groups in Gaza.8
It is unclear that Israel seeks to completely uproot Hamas or take control of Gaza. However,
Israeli leaders may be opting for a relatively extensive military operation aimed at minimizing
Hamas’s future military capacity at a time when Iron Dome appears to afford significant
protection to Israeli population centers. Whether international pressure, in light of increased
Palestinian civilian casualties, may mount on Israel to end its offensive before Hamas’s rocket
salvos significantly decrease in range and frequency could influence
4 Alice Speri, “Israeli Shelling Kills 4 Children on Gaza Beach,” VICE News, July 16, 2014.
5 UNRWA press release, “UNRWA Strongly Condemns Placement of Rockets in School,” July 17, 2014.
6 See CRS Report RL34074, The Palestinians: Background and U.S. Relations, by Jim Zanotti.
7 From Hamas’s standpoint, Egypt’s quick transformation since July 2013 (when its military ousted Muslim
Brotherhood figure Muhammad Morsi from the presidency)—from a presumed benefactor to an antagonist bent on
boosting Fatah at Hamas’s expense—has presented challenges to Hamas’s regional influence and continued control of
Gaza. A seemingly less influential Turkish profile and a Qatari leadership change in 2013 have further complicated
Hamas’s efforts to maintain regional support. Hamas is reportedly seeking to rebuild ties with Iran, though restoring
these ties to their previous status may be unlikely given the estrangement that took place when Hamas’s external
leadership left its headquarters in Syria and broke off relations with the Asad regime in early 2012.
8 Nathan J. Brown, “5 Myths About Hamas,” Washington Post, July 20, 2014.
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• the extent to which Israel seriously considers Hamas’s reported cease-fire
demands, such as those related to movement and access and prisoner releases;9
• whether an end to hostilities would simply restore the previous quiet, or
somehow change the overall dynamic—either strengthening or weakening
Hamas’s position relative to Abbas and/or Israel;10 and
• the nature and extent of regional and international support Israel might receive in
efforts to prevent Hamas and other Gaza-based militants from rearming.11
President Obama has voiced support for Israel’s efforts to defend itself, but has expressed concern
over mounting civilian casualties, and has sent Secretary of State John Kerry to the region in
hopes of working with U.N. Secretary-General Ban Ki-moon and regional actors to help reach a
cease-fire.12
U.S. Policy Issues
Congress and the Obama Administration might address a range of issues pertinent to the conflict,
including
• Whether and how to intercede to end the conflict and avoid further escalation,
spillover into third countries, or a third Palestinian intifada (uprising);
• Whether various Israeli and Palestinian actions comply with international laws
and norms, and how to respond to any breaches;
• What implications there are for Palestinian unity, diplomacy and international
action regarding Israeli-Palestinian disputes, and regional dynamics; and
• Whether and how various types of material and political assistance to Israel and
the Palestinians might proceed, change, or cease.13
9 See, e.g., Ian Black, “Gaza ceasefire hopes switch to Qatar as Arabs divided over Israeli offensive,” theguardian.com,
July 20, 2014; Avi Issacharoff, “Qatar’s ceasefire offer adopts most Hamas demands,” Times of Israel, July 19, 2014.
10 Black, op. cit.: “Egypt told Hamas that any opening of the Rafah border crossing would entail the return of Abbas’s
presidential guard with no Hamas men present, a senior Palestinian official said. Israel and the PA accepted this
proposal but Hamas rejected it, describing it as ‘not in the best interests of the Palestinian people.’”
11 According to the New York Times, rockets are smuggled to Gaza “via ship and tunnel from Iran, Libya, Sudan and
Syria and, increasingly, manufactured from water pipes and household items in what a senior Israeli intelligence officer
called Gaza’s ‘high-tech’ sector—about 70 makeshift factories staffed by 250 men and overseen by a few dozen
engineers and chemists.” Jodi Rudoren, “From Gaza, an Array of Makeshift Rockets Packs a Counterpunch,” New York
Times, July 17, 2014. The Jewish Telegraphic Agency (JTA) has reported that London-based Arabic-language daily Al-
Arab reported that unnamed sources told it that, on July 18, Israel bombed a warehouse north of Khartoum, Sudan, that
supposedly contains long-range rockets intended for Hamas. “Report: Israel hit Sudan site housing missiles for Gaza,”
JTA, July 21, 2014.
12 In response to Israel’s incursion into the Shejaiyah neighborhood in Gaza, which reportedly resulted in numerous
civilian casualties, Mr. Ban said, “I condemn this atrocious action. Israel must exercise maximum restraint and do far
more to protect civilians.” “Security Council holds emergency meeting on Gaza; Ban meets with Abbas in Qatar,” UN
News Centre, July 20, 2014.
13 See CRS Report RL33222, U.S. Foreign Aid to Israel, by Jeremy M. Sharp; and CRS Report RS22967, U.S. Foreign
Aid to the Palestinians, by Jim Zanotti.
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Introduction
U.S.-Israel defense, diplomatic, and economic cooperation has been close for decades. U.S.
policy makers often consider Israel’s security as they make policy choices in the region. Israel has
relied on U.S. support for its defense posture, despite reported private and sometimes public
disagreements between U.S. and Israeli officials on how to respond to and prioritize various
security challenges. Congress provides active oversight of the executive branch’s dealings with
Israel. Some Members of Congress oppose what they perceive as U.S. support of Israel without
sufficient scrutiny of Israel’s actions. Other Members of Congress have criticized actions by the
Obama Administration and previous U.S. Administrations for being insufficiently supportive of
Israel, and occasionally have authorized and appropriated funding for programs benefitting Israel
at a level exceeding that requested by the executive branch.
U.S. approaches to a number of challenges in the Middle East have implications for Israel. For
several years now, Israeli leaders have described Iran and its reported pursuit of a nuclear
weapons capability as an imminent threat to Israeli security. Israeli officials have claimed that
their window of opportunity to act on their own to delay, halt, or reverse Iranian progress toward
a nuclear weapons capability is closing. Consequently, they have sought increasingly stringent
measures from the international community intended to compel Iran to negotiate limitations that
ensure that its nuclear program is exclusively for peaceful purposes. Within this context, Israeli
leaders have publicly hinted that absent a clear resolution of Iran’s nuclear activity to their
satisfaction, they may order the Israeli military to strike Iranian nuclear facilities.
Many Israeli officials also are concerned with the rise of Islamist political movements and threats
posed by violent jihadist terrorist groups emanating from ongoing regional political turmoil.
Israel has few means of influencing political outcomes in Egypt, Syria, Iraq, Lebanon, or Jordan,
but developments in those states may significantly affect Israeli security. Instability in Egypt’s
Sinai Peninsula has already been used by militant groups—probably including Al Qaeda-style
Palestinian cells—for attacks on Israeli targets. At the same time, many large and small Israeli
population centers remain threatened by rocket fire from Hamas and other terrorist groups in
Gaza, as demonstrated by the July 2014 Israel-Gaza conflict.
Israel’s disputes continue with the Palestine Liberation Organization (PLO) over the terms of a
potential peace agreement on issues including security parameters, borders, Jewish settlements,
water rights, Palestinian refugees, and the status of Jerusalem. Partly as a result of active U.S.
efforts, Israel and the PLO started a new round of direct negotiations in the summer of 2013, but
this round ended unsuccessfully in April 2014. In June 2014, the leading PLO faction Fatah
formed a new Palestinian Authority government in consensus with Hamas in an attempt to end
seven years of divided Fatah-Hamas rule in parts of the West Bank and in Gaza. However,
various developments, including renewed Israel-Gaza conflict in July 2014, have raised doubts
regarding the viability of unified PA rule and current Israeli, Palestinian, and international
approaches toward Gaza.
Failure by Israelis and Palestinians to make diplomatic progress could have a number of regional
and global implications. Such implications could include a possible return by the PLO to a
strategy of seeking greater international recognition of Palestinian statehood. They could also
include Israeli efforts to unilaterally determine border and security arrangements for the West
Bank.
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Country Background
Historical Overview14
The start of a quest for a modern Jewish homeland can be traced to the publication of Theodor
Herzl’s The Jewish State in 1896. Herzl was inspired by the concept of nationalism that had
become popular among various European peoples in the 19th century, and was also motivated by
his perception of European anti-Semitism. The following year, Herzl described his vision at the
first Zionist Congress, which encouraged Jewish settlement in Palestine, the territory that had
included the Biblical home of the Jews but was then part of the Ottoman Empire. During World
War I, the British government issued the Balfour Declaration in 1917, supporting the
“establishment in Palestine of a national home for the Jewish people.” Palestine became a British
Mandate after the war and British officials simultaneously encouraged the national aspirations of
the Arab majority in Palestine for eventual self-determination, insisting that its promises to Jews
and Arabs did not conflict. Jews immigrated to Palestine in ever greater numbers during the
Mandate period, and tension between Arabs and Jews and between each group and the British
increased, leading to periodic clashes. Following World War II, the plight of Jewish survivors of
the Holocaust gave the demand for a Jewish home added poignancy and urgency, while Arabs
across the Middle East simultaneously demanded self-determination and independence from
European colonial powers.
In 1947, the United Nations General Assembly developed a partition plan (Resolution 181) to
divide Palestine into Jewish and Arab states, proposing U.N. trusteeship for Jerusalem and some
surrounding areas. The leadership of the Jewish Yishuv (or polity) welcomed the plan because of
the legitimacy they asserted that it conferred on the Jews’ claims in Palestine despite their small
numbers, while the Palestinian Arab leadership and the League of Arab States (Arab League)
rejected the plan, insisting both that the specific partition proposed and the entire concept of
partition were unfair given Palestine’s Arab majority. Debate on this question prefigured current
debate about whether it is possible to have a state that both provides a secure Jewish homeland
and is governed in accordance with democratic values and the principle of self-determination.
After several months of civil conflict between Jews and Arabs, Britain officially ended its
Mandate on May 14, 1948, at which point the state of Israel proclaimed its independence and was
immediately invaded by Arab armies. During and after the conflict, roughly 700,000 Palestinians
were driven or fled from their homes, an occurrence Palestinians call the nakba (“catastrophe”).15
Many became internationally designated refugees after ending up either in areas of Mandate-era
Palestine controlled by Jordan (the West Bank) or Egypt (the Gaza Strip), or in nearby Arab
states. Palestinians remaining in Israel became Israeli citizens.
The conflict ended with armistice agreements between Israel and its neighboring Arab states:
Egypt, Jordan, Lebanon, and Syria. The territory controlled by Israel within these 1949-1950
armistice lines is roughly the size of New Jersey. Israel engaged in further armed conflict with
some or all of its neighbors in 1956, 1967, 1973, and 1982. Since the late 1960s, Israel has also
dealt with the threat of Palestinian nationalist and (later) Islamist terrorism. In 1979, Israel
14 For more, see Howard M. Sachar, A History of Israel: From the Rise of Zionism to Our Time, New York: Knopf,
1996.
15 CRS Report RL34074, The Palestinians: Background and U.S. Relations, by Jim Zanotti.
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concluded a peace treaty with Egypt, followed in 1994 by a peace treaty with Jordan, thus making
another multi-front war less likely. However, as discussed throughout the report, major security
challenges persist from Iran and groups allied with it. Additionally, developments in Arab states
and in the ongoing Israeli-Palestinian conflict further complicate Israel’s regional position.
Demographic and Political Changes
Israel’s demographic profile has evolved in a way that appears to be affecting its political
orientation and societal debates. In the first decades following its founding, Israeli society was
dominated by secular Ashkenazi Jews from Eastern Europe who constituted the large majority of
19th and early 20th century Zionist immigrants. Many leaders from these immigrant communities
sought to build a country dedicated to Western liberal and communitarian values. The 1977
electoral victory of Menachem Begin’s Likud party helped boost the influence of previously
marginalized groups, particularly Mizrahi (Eastern) Jews who had largely immigrated to Israel
from Arab countries and Iran. Subsequently other distinct groups, such as Haredim (ultra-
Orthodox) from communities that predated Zionist immigration, and Russian-speaking Israelis
who emigrated from the former Soviet Union in the 1990s,16 have increased their numbers—and
consequently their influence—in Israeli society. Israel also faces considerable estrangement
between its Jewish and Arab citizens. Arabs comprise more than 20% of the population, and
Islamist movements are increasingly popular in some Arab Israeli communities.
Political parties linked to recently expanded segments of Jewish Israeli society tend to favor the
right side of the Israeli political spectrum currently led by Binyamin Netanyahu and Likud. At the
same time, general trends show that support for traditionally left-leaning Zionist parties such as
Labor has decreased. Issues regarding religiosity in the public sphere and secular consternation at
subsidies and widespread exemptions from military service for Haredim (many of whom engage
in religious study as an alternative to employment) have driven recent political debate. Military
service remains compulsory for most Jewish Israeli young men and women.
Many analysts believe that these changes partly explain why Israel’s current Jewish population is
“more nationalistic, religiously conservative, and hawkish on foreign policy and security affairs
than that of even a generation ago.”17 These trends’ likely long-term effects on Israel’s internal
cohesion and its ties with the United States and other international actors are unclear.
16 Most of these Russian-speaking emigrants are Ashkenazi and tend to be secular, but are generally more sympathetic
with right-leaning parties than with the old Ashkenazi elite. Now that post-Soviet emigration flows have largely ended,
growth in the Russian-speaking population of Israel has slowed and the overall demographic trend may now be one of
decline or approaching decline.
17 Haim Malka, Crossroads: The Future of the U.S.-Israel Strategic Partnership, Washington, DC: Center for Strategic
and International Studies, 2011, p. 19.
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Government and Politics
Overview
Israel is a parliamentary democracy in which the prime minister is head of government and the
president is a largely ceremonial head of state. The unicameral parliament (the Knesset) elects a
president for a seven-year term. Israel does not have a written constitution. Instead, Basic Laws
lay down the rules of government and enumerate fundamental rights. Israel has an independent
judiciary, with a system of magistrates’ courts and district courts headed by a Supreme Court.
The political spectrum is highly fragmented, with small parties exercising disproportionate power
due to the low vote threshold for entry into the Knesset,18 and larger parties seeking small party
support to form and maintain coalition governments. Since Israel’s founding, the average lifespan
of an Israeli government has been about 23 months. In recent years, however, the Knesset has
somewhat tightened the conditions for bringing down a government.
18 Until a new law was passed in March 2014 changing the threshold to 3.25%, it had been 2%.
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Figure 4. Map of Israel
Source: CIA, The World Factbook.
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Primer on Israeli Electoral Process and Government-Building19
Elections to Israel’s 120-seat Knesset are direct, secret, and proportional based on a party list system, with the
entire country constituting a single electoral district. Al Israeli citizens age 18 and older may vote. Turnout in
elections since 2001 has ranged between 62% and 67% of registered voters (before that it generally ranged
between 77% and 80%).20 Elections must be held at least every four years, but are often held earlier due to
difficulties in holding coalitions together. A Central Elections Committee is responsible for conducting and
supervising the elections. The committee includes representatives from parties in the current Knesset and is
headed by a Supreme Court justice.
National laws provide parameters for candidate eligibility, general elections, and party primaries—including
specific conditions and limitations on campaign contributions and public financing for parties.21 Since 2007, a
“cooling-off law” requires that senior Israeli military officers wait at least three years before entering civilian
politics.22
Fol owing elections, the task of forming a government is given by Israel’s president to the Knesset member
he/she believes has the best chance to form a government as prime minister. The would-be prime minister has
28 days to assemble a majority coalition, and the president can extend this period for an additional 14 days. The
government and its ministers are installed fol owing a vote of confidence by at least 61 Knesset members.
Thereafter, the ministers determine the government’s course of action on domestic issues, while military and
national security action are directed through a “security cabinet” (formally known as the Ministerial Committee
on Defense) consisting of a group of key ministers—some whose membership is set by law, others who are
appointed by the prime minister—who number no more than half of al cabinet ministers.23
For the first 30 years of Israel’s existence (1948-1977), the social democratic Mapai/Labor movement—led by a
founding Ashkenazi Zionist elite of Eastern European descent—dominated Israeli governing coalitions. As
questions regarding the future of territories that Israel’s military occupied during the 1967 Arab-Israeli War
became increasingly central to political life, the nationalist Likud party and its prominent prime ministers
Menachem Begin and Yitzhak Shamir helped drive the political agenda over the fol owing 15 years. Although
Labor under Yitzhak Rabin later initiated the Oslo peace process with the Palestinians, its political momentum
was slowed and reversed after Rabin’s assassination in 1995. Despite Labor’s setbacks, its warnings regarding the
demographic chal enge that high Arab birth rates could eventual y present to continued Israeli political control
over Palestinians, under the rubric of maintaining both a Jewish and a democratic state, gained traction among
19 Much of the information for this textbox comes from Israel’s Ministry of Foreign Affairs website, “Elections in
Israel - February 2009,” February 10, 2009.
20 International Institute for Democracy and Electoral Assistance, “Voter turnout data for Israel,” October 5, 2011;
Alistair Lyon, “Netanyahu claims election win despite losses,” Reuters, January 22, 2013.
21 For additional details on Israel’s campaign finance laws, see Ruth Levush, “Campaign Finance: Israel,” Law Library
of Congress, July 25, 2012.
22 The law, sponsored by Likud’s Yuval Steinitz, was reportedly intended to counter Israeli military officers’
cultivation of civilian political connections and influence in anticipation of their possible career transitions. Some
reports criticized the law’s failure to address the use of influence by civilian politicians to prepare for private sector
career transitions. Nehemia Shtrasler, “The Bottom Line / Lawmakers don't need to cool off too?” Ha’aretz, May 16,
2007.
23 According to a one media report, “Under Israeli law, war must be approved by the full cabinet. But the security
cabinet, whose secrecy is better enforced, can green-light more limited military ‘missions’. Making that distinction
depends on whether Israel's intelligence chiefs anticipate an escalation into protracted conflict.” Dan Williams,
“Netanyahu’s new security cabinet may hesitate on any Iran war,” Reuters, March 19, 2013. Historically, Israeli prime
ministers (including Netanyahu) have appeared to prefer convening the smaller forum for consultative purposes when
convening the larger one is not legally required. See, e.g., Eli Lake, “Meet the Israeli ‘Octet’ That Would Decide an
Iran Attack,” Daily Beast, March 9, 2012. For a primer on and historical overview of Israel’s national security
decisionmaking process by a former Israeli security official, see Charles D. Freilich, Zion’s Dilemmas: How Israel
Makes National Security Policy, Ithaca, New York: Cornell University, 2012. For a more concise version of the same
subject matter, see Charles D. Freilich, “National Security Decision-Making in Israel: Improving the Process,” Middle
East Journal, vol. 67, no. 2, spring 2013.
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many Israelis. In this context, Prime Minister Ariel Sharon, a longtime champion of the Israeli right and
settlement movement, split from Likud and established Kadima as a more centrist alternative in 2005. Elections
in February 2009 were a divided affair, with Tzipi Livni’s Kadima winning the most Knesset seats but Netanyahu’s
Likud leading the coalition because of an overall advantage for right-of-center parties. For more recent
developments, see “Current Government” below.
Table 1. Israeli Security Cabinet Members
Previous Knesset
Member Party
Ministerial
Position(s)
Terms
Binyamin Netanyahu
Likud
Prime Minister
7
Minister of Public Diplomacy and
Diaspora Affairs
Moshe Ya’alon
Likud
Minister of Defense
1
Avigdor Lieberman
Yisrael Beiteinu
Minister of Foreign Affairs
4
Yair Lapid
Yesh Atid
Minister of Finance
0
Naftali Bennett
Ha’bayit Ha’Yehudi
Minister of Economy and Trade
0
Minister of Religious Affairs
Tzipi Livni
Ha’tnua
Minister of Justice
4
Yitzhak Aharonovich
Yisrael Beiteinu
Minister of Public Security
2
Gilad Erdan
Likud
Minister of Communications
3
Minister of Home Front Defense
Current Government
The current Israeli coalition government was sworn in on March 18, 2013, following elections
that took place on January 22, 2013. The right-of-center24 “Likud Beiteinu” list,25 featuring Prime
Minister Binyamin Netanyahu’s Likud party and Yisrael Beiteinu (Israel Is Our Home), took the
most seats (31) in the 120-seat Knesset (parliament), but 11 fewer than its constituent parties had
in the previous Knesset. In July 2014, Foreign Minister Avigdor Lieberman announced the end of
Yisrael Beiteinu’s joint participation in the Knesset with Likud, with the result that Likud now has
20 seats and Yisrael Beiteinu 11.
After a surprisingly strong showing in the 2013 elections, the newly formed, centrist Yesh Atid
(There Is a Future), led by former journalist Yair Lapid,26 has the second-largest Knesset
representation (19 seats). Lapid and Naftali Bennett27 of the pro-settler party Ha’bayit Ha’Yehudi
24 In Israel, the left-right spectrum has been traditionally defined by parties’ positions on the Israeli-Palestinian
conflict/peace process, though the spectrum also has some validity in describing differences on economic and social
issues.
25 Under Israeli electoral law, lists for Knesset elections may consist of one party or multiple parties running jointly.
26 For a profile of Lapid, see Raffi Berg, “Profile: Yair Lapid, Israel's Yesh Atid party leader,” BBC News, March 14,
2013.
27 Bennett, who is routinely described as a young, charismatic leader helping remake his party, is also a
multimillionaire former businessman and was a former chief of staff to Netanyahu during his time as opposition leader
in 2006-2008 before the two reportedly had a falling out of sorts. Bennett favors Israeli annexation of a large part of the
(continued...)
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agreed to join the government with Likud and Yisrael Beiteinu after agreeing on parameters with
Netanyahu over legislation—since enacted—to gradually remove the general exemption from
mandatory conscription for young ultra-Orthodox men. Isaac Herzog formally leads the
opposition as head of its largest party, Labor. Other elements of the opposition include the ultra-
Orthodox parties Shas and United Torah Judaism. For a breakdown of the electoral lists with
Knesset seats, see Appendix B.
Figure 5. Israeli Knesset
Speculation regularly ensues regarding Israeli governmental stability. It is possible that the
coalition could collapse over disagreements on Palestinian or socioeconomic issues and trigger
another round of elections before they would be required in late 2017. However, assertions
shortly following the 2013 elections that Yair Lapid’s rise might represent a fundamental
reorientation of Israeli politics in favor of his party or centrist parties in general has largely
subsided. Subsequent public opinion polls since mid-2013 indicate that support for his Yesh Atid
party is lagging behind its current Knesset representation, though polls differ on how Likud,
Yisrael Beiteinu, Labor, and Ha’Bayit Ha’Yehudi respectively stand to benefit. As finance
minister, Lapid has become a leading face of unpopular austerity measures.
At the same time, internal struggles within Netanyahu’s Likud party may affect its future
leadership and direction. Tensions reportedly exist between established party veterans and
younger politicians who advocate more nationalistic positions and confrontational tactics on
Palestinian and other civil society issues. Likud’s diminished Knesset and cabinet representation
relative to the previous (2009-2013) government appears to have exacerbated these tensions.
Likud member Reuven Rivlin was elected in June 2014 to succeed Shimon Peres as Israel’s
president—a generally ceremonial and symbolic position. A former Knesset speaker, Rivlin is
less internationally prominent than Peres. Unlike Peres, he does not publicly support an Israeli-
Palestinian two-state solution, but rather favors a confederation of the two peoples.28
(...continued)
West Bank. Jodi Rudoren, “Dynamic Former Netanyahu Aide Shifts Israeli Campaign Rightward,” New York Times,
December 26, 2012.
28 Jeffrey Heller, “Right-winger Reuven Rivlin elected Israel's president,” Reuters, June 10, 2014.
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Political differences in Israel appear to increasingly hinge on domestic socioeconomic issues, a
departure from the Palestinian issue’s traditional predominance in Israeli political discourse.
Despite consistent economic growth and Israel’s stable fiscal position, these issues drove large,
non-violent domestic protests in the summer of 2011.29 Other matters that garner significant
domestic attention include the influence of ultra-Orthodox Jewish communities on gender roles in
the public sphere, as well as tensions between avowed Jewish nationalist elements of society and
Palestinians (including Arab Israelis), non-Jewish religious groups, and some other Jewish
Israelis.30 U.S. officials periodically express concern over these dynamics.
Economy
In General
Israel has an advanced industrial, market economy in which the government plays a substantial
role. Despite limited natural resources, the agricultural and industrial sectors are well developed.
The engine of the economy is an advanced high-tech sector, including aviation, communications,
computer-aided design and manufactures, medical electronics, and fiber optics. Israel still
benefits from loans, contributions, and capital investments from the Jewish diaspora, but its
economic strength has lessened its dependence on external financing.
Israel’s economy appears to be experiencing a moderate slowdown after years of sustained, robust
growth (nearly 5% from 2010 to 2011, for example). The slowdown seems to be largely due to
second-order effects from down economies in Israel’s largest export markets in Europe and North
America. According to the Economist Intelligence Unit, Israel’s growth in real GDP for 2013 was
just above 3%.31 However, growth is expected to steadily climb toward 6% over the next five
years due to the central bank’s relatively expansionary monetary policy, some signs of global
economic recovery, and anticipated new income from recently discovered offshore natural gas
deposits (as discussed below).32
When Prime Minister Netanyahu was finance minister in the early 2000s, the government
attempted to liberalize the economy by controlling government spending, reducing taxes, and
privatizing state enterprises. The chronic budget deficit decreased, while the country’s
international credit rating was raised, enabling a drop in interest rates. However, Netanyahu’s
critics suggest that cuts in social spending widened income inequality and shrank the Israeli
middle class.33 A May 2013 Organisation for Economic Co-operation and Development (OECD)
29 Various factors—including Israel’s communitarian heritage, its tradition of vigorous public debate, and the
consequences of deregulation for a system characterized by some as “crony capitalism”—may have contributed to the
protests.
30 Such tensions include “price tag” attacks and vandalism in retaliation for government action or anticipated action
limiting settlements or countering outposts unsanctioned by Israeli law. Yossi Melman, “A price tag for Jewish terror,”
Jerusalem Report, May 6, 2013.
31 Economist Intelligence Unit, Country Report: Israel, generated July 17, 2014.
32 Ibid.
33 “How Netanyahu Went from Idealism to Pragmatism on Economic Policy” Knowledge@Wharton Blog, October 10,
2012.
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report stated that Israel has the highest poverty rate of any OECD country (slightly more than
20%) and the fifth-highest level of income inequality.34
Table 2. Basic Facts
Population
7.71 million (2013 est.) (includes an estimated 341,400 settlers in
the West Bank (2012 est.), 196,400 in East Jerusalem (2011 est.),
and 18,900 in the Golan Heights (2012 est.))
Jews
75.1% (2012 est.)
Arabs
19%-21%
(2012
est.)
Real Gross Domestic
3.3% (2013 est.)
Product growth rate
GDP per capita (at
$36,200 (2013 est.)
purchasing power parity)
Unemployment rate
5.8% (2013 est.)
Population below
21% (2012 est.)
poverty line
Inflation rate
1.7% (2013 est.)
Defense spending as %
4.4% (2014 proj.)
of GDP
Budget deficit as % of
2.6% (2014 proj.)
GDP
Public Debt as % of GDP 66.2% (2014 proj.)
Foreign exchange and
$80.8 billion (2013 est.)
gold reserves
Current account surplus
as % of GDP
2.7% (2014 proj.)
Exports $60.7
billion (2013 est.)
Export commodities
machinery and equipment, software, cut diamonds, agricultural
products, chemicals, textile and apparel
Export partners
U.S. 27.8%, Hong Kong 7.7%, United Kingdom 5.7%, Belgium
4.6%, China 4.3% (2012 est.)
Imports
$67.0 billion (2013 est.)
Import commodities
raw materials, military equipment, investment goods, rough
diamonds, fuels, grain, consumer goods
Import partners
U.S. 12.9%, China 7.3%, Germany 6.3%, Switzerland 5.5%,
Belgium 4.8% (2012 est.)
Sources: Central Intelligence Agency, The World Factbook; Economist Intelligence Unit; Israel Central Bureau of
Statistics, Jane’s Defence Budgets, OECD.
34 OECD, “Crisis squeezes income and puts pressure on inequality and poverty,” May 15, 2013.
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Natural Gas Resources and Export Possibilities35
In 2010, the U.S. Geological Survey estimated that there are considerable undiscovered oil and
gas resources that may be technically recoverable in the Levant Basin, an area that encompasses
coastal areas of Israel, Syria, Lebanon, Gaza, and Egypt and adjacent offshore waters.36 Natural
gas production from Israel’s first major offshore field, Tamar, began flowing in March 2013,
ushering in a new era of Israel as an energy producer and possibly an exporter. Since Egypt cut its
natural gas exports to Israel in 2012, the Israeli government has been pushing the companies
involved in Tamar to increase production as quickly as possible to make up the shortfall.37 With a
second, larger offshore natural gas field, Leviathan,38 still under development, Israel is facing
questions of how best to utilize its natural gas resources, while other regional countries explore
the possibility of new investment to bring resources in their jurisdictions online.
35 This section was co-authored by Michael Ratner, Specialist in Energy Policy; and Christopher M. Blanchard,
Specialist in Middle Eastern Affairs.
36 USGS, Assessment of Undiscovered Oil and Gas Resources of the Levant Basin Province, Eastern Mediterranean,
March 2010.
37 Production has also been increased at some smaller fields.
38 The Leviathan field, located off Israel’s northern coast, has an estimated resource base of 21.9 trillion cubic feet (tcf)
of natural gas. Tamar holds approximately 10 tcf. Both fields were discovered by U.S.-based company Noble Energy.
See Noble Energy’s “Eastern Mediterranean” portal at
http://www.nobleenergyinc.com/operations/international/eastern-mediterranean-128.html.
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Figure 6. Eastern Mediterranean Energy Resources
Source: U.S. Department of State, Bureau of Intelligence and Research, Office of the Geographer, Geographic
Information Unit.
Notes: Boundaries and locations are approximate and not necessarily authoritative.
Prior to the recent offshore natural gas discoveries, Israel had about 16 years’ worth of natural gas
at its production levels. If only half the estimated natural gas resources from Israel’s new
discoveries were produced and consumed at 2011 levels, Israel would have about a 100-year
supply.39 It is too early to know the rate of natural gas recovery from all the new fields or if
additional discoveries will be made, but it is highly likely that Israel’s energy consumption will
move toward more natural gas by the end of the decade. Initial production from Leviathan is
projected to take place in 2016. According to Noble Energy, the U.S.-based company that is
primarily responsible for the consortiums controlling both Leviathan and Tamar, Tamar is
expected to reach a capacity of almost 1 billion cubic feet per day (bcf/d) in 2014, with a possible
expansion to 1.5 bcf/d by 2015, which represents approximately six times the rate of Israeli
39 When natural gas or oil is referred to as a resource, it implies that the natural gas or oil is technically recoverable, but
may not be economical to produce. This is a less certain classification than a proved reserve, which means the natural
gas or oil can be produced with existing technology and under current market conditions.
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consumption in 2012 (0.25 bcf/d). In 2013, Israel’s Natural Gas Authority projected consumption
to almost triple and to be met exclusively from domestic sources, mainly the Tamar field.40
Whether Israel will become an exporter of natural gas has yet to be determined. If the resource
estimates are correct, the new fields would give Israel the resources to become an exporter. Future
export options include sending natural gas by pipeline and/or producing liquefied natural gas
(LNG) that can be exported more broadly. However, a number of factors raise questions about the
viability of large-scale exports: growing domestic demand (possibly driven by new uses for
natural gas), the expense of liquefying natural gas for transport, competitive projects in other
countries, and the politics of pipeline exports. In October 2013, one of the concerns potential
exporters had harbored was alleviated when Israel’s Supreme Court rejected a lawsuit brought by
various environmental organizations to halt or delay the government's export plans.41
Additionally, if more natural gas and possibly oil resources are to be developed, Israel’s
government will probably need to assuage energy industry concerns about the changing nature of
its regulatory regime. The government’s announcement in June 2013 that it plans to keep more
natural gas than expected (60%) for domestic consumption—leaving only 40% for exports—may
not bode well for future development.42 Industry had apparently been hoping that at least 50% of
the natural gas would be available for export, including through the possible involvement of
Woodside, an Australian company with specialized expertise in LNG. However, in May 2014,
Woodside opted not to join the venture to develop the Leviathan field.43
Possible Israeli Export Destinations and Regional Security and Political
Implications
Noble Energy and its Israeli partners nevertheless plan to move forward with development.
According to Noble Energy’s CEO, the emergence of regional markets accessible by pipeline
“has pushed the need for LNG into a later phase of development versus our earlier plans.”44
There are a number of possible export destinations for offshore Israeli natural gas via pipeline.
However, questions exist regarding Israel’s ability to create and sustain energy ties with Arab and
other Muslim-majority neighbors whose relations with Israel are marked either by ongoing or
intermittent political disputes, and/or by sensitivities based on strong, long-standing anti-Israel
public sentiment. It is unclear to what extent political difficulties with neighbors might be
mitigated by the potential material benefits of energy cooperation or by other considerations, and
40 Email from Israel's Natural Gas Authority with the data showing these projections, June 30, 2013.
41 Hila Raz, “Supreme Court rejects petition to halt Israel’s natural gas exports,” haaretz.com, October 21, 2013.
42 “Israel's top court gives government 15 days to respond to appeal against gas exports,” Platts, June 25, 2013, online.
43 John Reed, “Woodside backs out of $2.7 bn Israel gas project,” Financial Times, May 21, 2014.
44 James Paton, “Woodside Scraps $2.6 Billion Israeli Gas Deal as Talks Fail,” Bloomberg, May 21, 2014. Noble
Energy and its Israeli partners in the Leviathan consortium have explored the possibility of building a liquefaction
facility—possibly in Cyprus—to prepare Cypriot gas and Israeli gas piped to the facility for export to Europe and/or
Asia in a cost effective way. It remains too early to determine the feasibility of such a project, although a recent
downgrade to the gas reserves in Cyprus’s offshore Aphrodite field may have decreased the viability or attractiveness
of a liquefaction facility. In late June 2013, Cyprus and the Leviathan consortium signed a memorandum of
understanding to build natural gas facilities for both domestic consumption and export. However, developments in
early 2014 suggested that talks had not progressed on the initial understanding, perhaps because of expectations for
lower future liquefied natural gas (LNG) prices, and because of possible alternatives for exporting Israeli gas via
pipeline. Elias Hazou, “LNG project teetering on the precipice,” Cyprus Mail, February 19, 2014.
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how satisfactory logistical and transportation frameworks and security measures might be
implemented. In addition to these overarching issues, the most-discussed potential export
destinations each come with specific political considerations, as described below:45
• West Bank and Gaza: The Palestinian Authority (PA) and the Leviathan
consortium led by Noble Energy reached agreement in January 2014 on a 20-year
supply of gas to a proposed power plant in the West Bank city of Jenin when
Leviathan comes online.46 Analysts have speculated on the possibility for Israeli
gas or gas from the PA-administered Marine (sometimes known as “Marine A”)
field to supply the Gaza Strip’s energy-starved power plant.47 Political and
security concerns, particularly Hamas’s presence in Gaza, have complicated this
issue. Depending on a number of variables, potentially reunified PA rule over the
West Bank and Gaza might either present opportunities to make energy
arrangements for the Gaza plant, or lead to further obstacles. Uncertainty
regarding Israeli-Palestinian relations and the PA’s future, particularly given the
July 2014 Israel-Gaza conflict and the unsuccessful end in April 2014 to a
previous round of peace talks, could affect Israeli control over offshore resources
and the shipment of gas from these resources to the West Bank and Gaza.
• Jordan: Jordan and the Tamar consortium led by Noble Energy reached
agreement in February 2014 on a 15-year deal,48 under which gas would flow to
Jordanian potash and bromine factories near the Dead Sea shore after pipeline
construction finishes—projected for 2016. The Leviathan consortium is
reportedly in talks with Jordan for a much bigger, longer-term export
agreement.49 Israel may be at least partly motivated to pursue such a deal in
hopes of optimizing current and future relations with Jordan at a time when
regular sabotage to Egypt’s pipeline has disrupted Jordan’s primary gas source,
and Jordanian leaders are searching for a reliable alternative.50
• Egypt: According to the Financial Times, the Tamar consortium signed a letter of
intent in May 2014 to provide a 15-year supply of gas to an LNG plant on the
Nile Delta run by a joint venture between Spanish and Italian firms, with Noble
Energy expecting to sign a binding agreement within the following six months.51
45 For discussions of these issues, see Michael Hochberg, “Israel’s Natural Gas Sector: A Regional Perspective,”
mei.edu, April 24, 2014; and Simon Henderson, Natural Gas Export Options for Israel and Cyprus, German Marshall
Fund of the United States, September 2013.
46 Tom Pepper, “Partners in Israeli Gas Field Sign Deal With Palestinians,” International Oil Daily, January 7, 2014.
47 A venture led by BG Group (formerly British Gas) discovered the Marine field in 2000. It has an estimated resource
base of 1 tcf. Development of Marine could contribute to greater Palestinian economic and political self-sufficiency,
perhaps freeing up Israeli energy resources for domestic consumption or export to other places. Simon Henderson,
“Natural Gas in the Palestinian Authority: The Potential of the Gaza Marine Offshore Field,” German Marshall Fund of
the United States, March 2014. Reduced Palestinian dependence on Israel could either heighten or reduce Israeli-
Palestinian tensions.
48 “Noble, Partners Sign Jordan Gas Deal,” Oil Daily, February 20, 2014.
49 John Reed, “Israel gas supply deals to Egypt and Jordan draw closer,” Financial Times, May 21, 2014.
50 According to the U.S. Energy Information Administration, “Jordan is pursuing several pipeline deals, notably with
Iraq, to help bolster its energy security. One proposal would send Iraqi oil from the area around Basra to the Jordanian
port of Aqaba on the Red Sea. If constructed, the pipeline would initially carry up to 1 Mb/d of oil, including more than
100,000 Mb/d available for use inside Jordan. The plan also calls for a natural gas pipeline to run along the same route
as the oil pipeline, with up to 100 million cubic feet per day (MMcf/d) being allocated to help meet Jordanian demand.”
51 Reed, “Israel gas supply deals to Egypt and Jordan draw closer,” op. cit.
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Reportedly, the Leviathan consortium signed a June 2014 memorandum of
understanding with Britain’s BG Group to supply gas that would restore
operations at another LNG plant in Egypt.52 Egypt is reportedly willing to
approve the potential deal “if the parties involved agree to help meet the
country’s domestic demand at a reasonable price.”53 Although Egypt has its own
natural gas reserves, subsidy-driven domestic demand and political instability
have reduced its export capacity and prevented the foreign-owned LNG plants
from meeting their export obligations.54 In addition to possibly importing natural
gas from Israel, Egypt has made plans for a floating LNG import terminal that
could receive gas from other exporters, such as Qatar (the world’s largest LNG
exporter).
• Turkey: A potential Israeli energy pipeline to Turkey could be extremely
lucrative by feeding Turkey’s increasing energy demand. It could also be
geopolitically advantageous for Europe by possibly increasing Turkey’s value as
an energy transport hub that could provide an alternative to Russian-origin gas.
Turkish leaders have openly anticipated normalizing diplomatic relations with
Israel sometime in 2014,55 which could remove obstacles to potential energy
deals.56 However, Israel-Turkey relations may continue to face difficulties. This
may be partly due to possible divergences in the two countries’ interests amid
regional tension and unpredictability, and partly due to recurring anti-Israel (and
arguably anti-Semitic) pronouncements from Turkish Prime Minister Recep
Tayyip Erdogan and his circle of advisors and media supporters.57 Additionally,
because technical factors may require that a pipeline from Israel’s offshore fields
to Turkey traverses Cyprus’s territorial waters, any Israel-Turkey deal might be
contingent on substantial progress toward resolving or mitigating the decades-
long dispute between Cyprus’s ethnic Greek and ethnic Turkish communities.
Israel-Lebanon Maritime Boundary Disagreement and Its Implications
In addition to the overarching regional political and security issues discussed above that may
affect prospects for producing and exporting natural gas,58 another complication to energy
development activities in the Eastern Mediterranean is Israel’s disagreement with Lebanon over
how to demarcate the maritime boundary between the two countries. This disagreement also has
hampered Lebanon’s efforts to develop potential offshore energy resources.
U.S. officials are working with Lebanese and Israeli leaders to resolve the dispute.59 Lebanon
objects to a 2010 Israel-Cyprus agreement that draws a specific maritime border delineation point
52 Summer Said, “Egypt Would Approve BG’s Israel Gas Deal If Local Demand is Met,” wsj.com, July 7, 2014.
53 Ibid.
54 “Fuelling Unhappiness,” Economist, May 24-30, 2014.
55 Aron Donzis, “Turkish PM: Rapprochement with Israel coming in weeks,” Times of Israel, April 29, 2014.
56 Turkey downgraded its diplomatic relations with Israel in the aftermath of the so-called Gaza flotilla incident of May
2010. For more information, see footnote 119.
57 See CRS Report R41368, Turkey: Background and U.S. Relations, by Jim Zanotti. See also, e.g., Günther Jileki and
Kemal Silay, “‘Spawn of Israel’: Erdogan’s anti-Semitic obsessions,” Ha’aretz, May 22, 2014.
58 Tia Goldenberg, “Israel faces geopolitical tangle with natural gas,” Daily Star (Lebanon), March 29, 2013.
59 The armistice line is not the final agreed border between Lebanon and Israel, but coastal points on the line appear
likely to be incorporated into any future Lebanon-Israel border agreement.
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relative to the 1949 armistice line that serves as their de facto border, and claims roughly 330
square miles of waters that overlap with areas claimed by Israel (see Figure 6 above).60
In seeking to help Israel and Lebanon resolve their differences on this question, the United States
appears to be interested in facilitating a more hospitable commercial environment for all parties
involved (including U.S. energy companies), and in preventing the dispute from exacerbating
long-standing animosities between the two countries. It is unclear to what extent U.S. diplomacy
on this issue can facilitate changes in the current Israeli and Lebanese stances.
For more information, see CRS Report R42816, Lebanon: Background and U.S. Policy, by
Christopher M. Blanchard.
Israel’s Security Concerns
General Threat Perceptions
Prime Minister Netanyahu and his government are occupied with a range of regional security
concerns stemming from Iran, turmoil in neighboring Arab states (especially Syria, Iraq,
Lebanon, and Egypt), and Israel’s decades-long conflict with the Palestinians. Although Israel
maintains conventional military superiority relative to its neighbors and the Palestinians, it is
unclear how shifts in regional order and evolving asymmetric threats may affect Israel’s
capabilities to project military strength, deter attack, and defend its population and borders. Israeli
officials closely monitor U.S. actions and consult with U.S. counterparts in apparent efforts to
gauge and influence the nature and scope of future U.S. engagement on and commitment to
regional issues with significant implications for Israel’s security.
Israelis and other observers debate the extent of Israel’s vulnerability. In discussing Israel’s
strategic situation, its previous ambassador to the United States, Michael Oren, has been quoted
as saying:
It’s hard for me to point to any moment in our history when we faced so many threats
simultaneously. The upheavals in Egypt, the question of Jordan’s stability, Syria, 70,000
Hezbollah rockets, Hamas’ long-range rockets, terrorists in the Sinai Peninsula—and above
all that, the colossal Himalaya of the Iranian nuclear threat that casts a shadow over
everything. But geopolitically … our situation is better than it has been at any point in
history. The alliance with the United States, the membership in the OECD [Organisation for
Economic Co-operation and Development], our relations with China and India, relations
with the former Warsaw Pact nations, the state of our economy and our military.61
Even in light of the July 2014 Israel-Gaza conflict, some unconventional threats to Israel are seen
to have been reduced because of factors such as heightened security measures vis-à-vis
60 For additional information, see CRS Report R42816, Lebanon: Background and U.S. Policy, by Christopher M.
Blanchard. See also James Stocker, “No EEZ Solution: The Politics of Oil and Gas in the Eastern Mediterranean,”
Middle East Journal, vol. 66, no. 4 (autumn 2012), pp. 579-597.
61 Ambassador Michael Oren, quoted in Ari Shavit, “Michael Oren: ‘Obama is a true friend, Israelis misunderstood his
outreach to Arab world,’” Ha’aretz, July 11, 2013. Since late 2013, Israel’s ambassador to the United States has been
Ron Dermer, who was born in the United States and previously served as a close advisor to Prime Minister Netanyahu.
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Palestinians; missile defense systems; and reported cyber capabilities. From a physical security
standpoint, Israel is nearing completion of a national border fence network of steel barricades
(accompanied by watch towers, patrol roads, intelligence centers, and military brigades), which is
presumably designed to minimize militant infiltration, illegal immigration, and smuggling from
Egypt, Syria, Lebanon, and parts of Jordan.62
U.S. pursuit of diplomacy with Iran appears to exacerbate Israel’s anxiety over the extent to
which it can rely on its geographically distant superpower partner to actively thwart potential
threats Israel faces, and to do so in the manner Israel’s government prefers. This is especially the
case given that some observers question the level and nature of influence the United States
continues to have in the Middle East, due to a number of political and economic factors, even
though substantial U.S. military assets remain deployed in the region and U.S. officials reiterate
commitments to Israel (and other regional allies) that are reinforced through tangible means such
as aid, arms sales, and missile defense cooperation. It remains to be seen whether this uncertainty
and Israel’s apparent anxiety presage changes to the U.S.-Israel relationship. Debate continues
among Israelis over the urgency of a political resolution to Israel’s disputes with the Palestinians,
as well as the potential regional and international consequences—including possibly increased
“isolation”—if no resolution occurs.
Despite efforts by the United States, European countries, and other actors to encourage Israel to
approach ongoing Palestinian talks more urgently, Israeli leaders may be reluctant to accept major
initiatives pertaining to these talks until they have greater clarity on the likely outcome of
intentional diplomacy regarding the Iranian nuclear issue.63
Challenges from Iran and Arab Neighbors
Over the 41 years since the last major Arab-Israeli War in 1973, Israel has relied on the following
three advantages—all either explicitly or implicitly backed by the United States—to remove or
minimize potential threats to its security and existence:
• Overwhelming conventional military superiority;
• Formally ambiguous but universally presumed regional nuclear weapons
exclusivity;64 and
• De jure or de facto arrangements or relations with the authoritarian leaders of its
Arab state neighbors aimed at preventing interstate conflict.
62 William Booth, “With Golan fence, Israel closer to surrounding itself with barriers,” Washington Post, June 6, 2013.
Israeli commentators have questioned the effectiveness of existing fences and security mechanisms Israel maintains in
places at its border with Jordan and at the line dividing the West Bank from Jordan. See, e.g., Yoav Zitun, “Israel's
most unsecured border?” Ynetnews, August 24, 2012.
63 Former Israeli peace process negotiator Yossi Alpher, quoted in Joshua Mitnick, “World News: Issues of Iran,
Middle East Converge Before Kerry Trip,” Wall Street Journal, December 4, 2013.
64 Israel is not a party to the Nuclear Non-Proliferation Treaty (NPT) and maintains a policy of “nuclear opacity” or
amimut. A consensus among media and analysts’ reports is that Israel possesses an arsenal of 80 to 200 nuclear
weapons. See, e.g., Timothy McDonnell, “Nuclear pursuits: Non-P-5 nuclear-armed states, 2013,” Bulletin of the
Atomic Scientists, vol. 69(1), 2013.
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Although, as stated above, Israel’s conventional military advantages are clear, the other two
advantages listed above could face threats from the following strategic challenges. They are
therefore subjects of serious concern among Israelis:
• Iranian Nuclear Challenge. Iran’s possible achievement of a nuclear weapons
capability, either for direct use or to exercise indirect but decisive influence on
the region, could worsen security dilemmas. Israeli leaders have asserted that
even if Iran does not use, intend to use, or even manufacture a nuclear weapon,
its mere capacity to do so will increase its deterrence by raising the potential
costs Israel and others would incur by acting against it or its allies (i.e.,
Hezbollah and various Palestinian militant groups). The resulting intimidation
could lead Arab Gulf states in proximity to Iran to adopt more quiescent or pro-
Iranian policies or to pursue nuclear capabilities of their own. In turn, this could
open the way for increased Iranian influence and/or nuclear proliferation
throughout the region. Prime Minister Netanyahu reportedly fears that such
intimidation could lead to a “mass exodus of Jews from an Israel under nuclear
threat, weakening the state and compromising the Zionist dream.”65
• Instability and Terrorism from Ungoverned Spaces. Ungoverned or minimally
governed spaces are proliferating near Israel’s borders in Syria, Lebanon, Egypt’s
Sinai Peninsula, and Libya. These areas attract or could attract terrorists,
weapons traffickers, criminal networks, refugees, and migrants, and contribute to
trends that appear to threaten Israeli security.66 Such concerns appear to be
motivating the construction of border fences with accompanying security
measures, as mentioned above.67
• Islamist-Led or -Influenced Arab States. Sunni Islamist-led or -influenced Arab
states may actively or tacitly support increased political pressure against Israel,
particularly on the Palestinian issue, and/or increased military mobilization at or
near its borders. Anti-Israel sentiments are widespread in other Middle Eastern
states. These sentiments are not exclusive to Islamists, but country-specific and
region-wide Islamist narratives, political constructs, and media platforms offer
possible channels for coordinating their impact. This trend is reflected in a
number of Arab countries where political change and turmoil has empowered
Islamist movements and militias. The trend was countered somewhat by the
Egyptian military’s ouster of Muslim Brotherhood figure Muhammad Morsi as
president in July 2013, but may gain new momentum in light of inroads made in
2013 and 2014 by the Islamic State (IS, also known as Islamic State of Iraq and
the Levant) in Syria and Iraq.
Israeli planners and decision makers have scrambled to determine how to properly address these
potential threats by recalibrating resource allocations, military postures, and regional and
international political activities.
65 Leslie Susser, “Spy vs. Spy,” Jerusalem Report, March 26, 2012.
66 Leslie Susser, “Strategic dilemmas,” Jerusalem Report, May 20, 2013.
67 Booth, op. cit.
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Iran68
For several years, Israeli leaders have described Iran and its reported pursuit of a nuclear weapons
capability69 as an imminent threat to Israeli security. Moreover, it appears that Israel, in the words
of one U.S. commentator, is concerned that the United States “will accept a nuclear agreement
that leaves Iran closer to a bomb than the Israelis would like to see them, sacrificing Israeli
security interests as understood in Jerusalem in order to keep the US out of a war.”70 Iranian
leaders insist that Iran’s nuclear program is solely for civilian purposes and does not pose a threat
to Israel.
Israel has sought increasingly stringent measures from the international community to compel
Iran to accept limitations that would ensure that its nuclear program could exclusively be used for
peaceful purposes. Prime Minister Binyamin Netanyahu labeled as a “historic mistake” a
November 2013 interim agreement between the “P5+1” nations (United States, United Kingdom,
France, China, Russia, and Germany) and Iran that went into effect in January 2014, vociferously
warning of the alleged perils of a deal that would in any way ease the international sanctions
regime against Iran and would accept Iran’s retention of enriched uranium or of infrastructure
potentially usable for the generation of fissile material. In December 2013, Netanyahu set forth
demands for a potential final deal:
The greatest threat to stability in the Middle East is Iran’s pursuit of nuclear weapons. It’s
therefore critical that the final deal with Iran prevent that from happening…. That means no
enrichment (of uranium), no centrifuges, no heavy water reactor, no weapons program, no
ballistic missiles and a change in Iran’s policies: no genocide against Israel, no terrorist
support, no undermining of regimes in the Middle East.71
A number of other Israeli leaders and former officials were more welcoming toward the interim
agreement, with some disagreeing with Netanyahu’s open criticism of U.S. diplomatic stances.
Nevertheless, many of these Israelis asserted that their support for the interim deal was ultimately
linked to expectations that a final deal would place credible and verifiable limits on Iran’s nuclear
program to their satisfaction.72
Much of Netanyahu’s diplomatic effort on this issue in 2014 has appeared to focus on holding
discreet consultations with the United States, other P5+1 members, and key energy importers
such as Japan.73 Presumably, this has been done at least partly in order to help shape negotiating
positions in contemplation of a possible comprehensive agreement, as well as to maintain the
sanctions regime. Despite Israeli concerns that various countries would lessen their compliance
with multilateral and U.S. sanctions, particularly on Iranian oil exports, former Israeli intelligence
68 For background information on Iran and its nuclear program, see CRS Report RL32048, Iran: U.S. Concerns and
Policy Responses, by Kenneth Katzman; CRS Report R40094, Iran’s Nuclear Program: Tehran’s Compliance with
International Obligations, by Paul K. Kerr; CRS Report R43333, Interim Agreement on Iran’s Nuclear Program, by
Kenneth Katzman and Paul K. Kerr; and archived CRS Report R42443, Israel: Possible Military Strike Against Iran’s
Nuclear Facilities, coordinated by Jim Zanotti.
69 A nuclear weapons capability below the threshold of actual weapons production would entail an ability to combine,
in a very short period of time, fissile material with a nuclear warhead and an appropriate delivery vehicle.
70 Walter Russell Mead, “Threading the Needle,” blogs.the-american-interest.com, October 25, 2013.
71 “Netanyahu outlines Israeli demands for final nuclear agreement with Iran,” Xinhua, December 10, 2013.
72 See, e.g., “Unlike Netanyahu, retired generals go along with Iran deal,” UPI, November 26, 2013.
73 See, e.g., “Iran Seen on Agenda as Netanyahu Visits Japan,” Israel National News (Arutz Sheva), May 11, 2014.
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chief Amos Yadlin was quoted as saying in May 2014 that “What we are seeing now that the
sanctions very much like President Obama and Secretary Kerry predicted, are still holding.”74
Israeli officials are likely to continue to emphasize to the Obama Administration and other
countries the importance of continued compliance and to vigorously discourage or deter potential
“workarounds.”75
However, in March 2014, Israeli Defense Minister Moshe Ya’alon, who had previously expressed
skepticism about the advisability of unilateral Israeli military action against Iranian nuclear sites,
publicly stated that he was no longer confident that Israel could rely on the United States to
address its concerns regarding Iran’s nuclear program.76 The timing of Ya’alon’s remarks may
have been at least partly calculated to influence the negotiations. Most analysts express
skepticism that Israel would take military action while international hopes remain for a
diplomatic solution,77 and it is unclear whether Israel is militarily capable and politically willing
to undertake a unilateral strike in any event given questions about a potential strike’s likely
effectiveness at setting back Iran’s program and its possible consequences for Israeli, regional,
and global security.
As P5+1-Iran negotiations for a potential comprehensive deal intensify, with the original July
2014 end date extended until November 2014, Netanyahu has become more publicly vocal in
warning about what he characterizes as the dangers of a deal that does not meet Israel’s demands.
In a May 2014 interview, Netanyahu said:
I think this is a setup for the same mistake that was done with North Korea. You leave Iran
with a breakout capability—let’s say a year. During that year, you have two problems. Will
you muster the political will and capability to deal with this in a year? What if there is
another unfolding crisis somewhere? Second, on the matter of inspections that are
promised—they built their underground bunkers when they were under inspection!
Look at what Iran does without nuclear weapons. They’re in Syria; they’re in Gaza, sending
ships with weapons.78 They’re in Yemen, in Bahrain, Iraq, everywhere. So if [Ayatollah Ali]
Khamenei’s Iran becomes a threshold nuclear power, what do you think will happen? Is this
going to move Iran into greater moderation, when he has greater force, or is he going to be
even less moderate?79
Netanyahu may see his efforts as instrumental in giving Israel a voice in a negotiating process in
which it does not directly participate. It is possible, though not certain, that Netanyahu’s
outspoken criticism of parameters announced in early November 2013—along with French
objections—contributed to a toughening of the ultimate interim agreement with regard to freezing
74 Ben Armbruster, “Ex-Israeli Military Intel Chief Says Tough Iran Sanctions ‘Are Still Holding,’” thinkprogress.org,
May 28, 2014.
75 See, e.g., Dennis Ross, “How to Think About Obama’s Deal with Iran,” Politico, November 25, 2013.
76 Barak Ravid, “Defense minister leans toward Israeli operation in Iran, as Obama portrays ‘weakness,’” Ha’aretz,
March 18, 2014.
77 See, e.g., Amos Harel, “With Iran deal sealed, don’t expect Israel to send out the air force,” Ha’aretz, November 25,
2013.
78 This is a reference to a March 2014 Israeli naval seizure of weapons from a ship in the Red Sea that was reportedly
stocked by Iran in Syria and was possibly en route to militants in the Gaza Strip of Egypt’s Sinai Peninsula (via a
Sudanese port and overland route).
79 Jeffrey Goldberg, “Netanyahu Says Obama Got Syria Right,” Bloomberg View, May 22, 2014.
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activities connected with Iran’s heavy water reactor at Arak.80 Also, Netanyahu may view
outspokenness as essential both in holding Iran accountable to its part of the deal, and in
cultivating public support within Israel and from other key audiences such as Congress and
broader U.S. public opinion—particularly in connection with legislative initiatives or potential
initiatives relating to the imposition and/or lifting of sanctions (see, for example, “U.S.-Israel
Strategic Partnership Act of 2014”).81
Syria and Iraq82
The Syrian civil war has increasingly become a security challenge for Israel. Israel became
militarily involved to a limited extent starting in early 2013. This involvement began with some
strikes to retaliate against instances of artillery fire on its positions in the Golan Heights.83
Subsequently, since January 2013, Israel has allegedly conducted a number of airstrikes to
prevent the transfer of sophisticated missiles or anti-aircraft weapons from the Asad regime to
Hezbollah.84 In late February 2014, reports indicated that Israeli planes may have struck
Hezbollah targets on the Lebanese side of the Syria-Lebanon border.85 Since then, Israel has
engaged in periodic exchanges of fire with Syrian government and rebel forces near the Syria-
Golan Heights border area, including June 2014 air strikes against Syrian military positions in
retaliation for an attack that killed an Israeli teenager.86 Israel has also fired in retaliation for
cross-border mortar or rocket attacks from Syria and Lebanon during the July 2014 Israel-Gaza
conflict.
Israel reportedly shared intelligence with the United States regarding the Asad regime’s alleged
use of chemical weapons.87 Following the apparent August 21, 2013, chemical weapons attack in
greater Damascus, Israeli officials apparently viewed the question of potential international
intervention as having implications for the credibility of the United States and U.S. allies in the
region.88 Yet, some accounts indicated that Israeli officials had “little desire to see [Asad]
80 “Israeli PM urges France to resist pressure, hold to conditions on Iran’s uranium and plutonium progress,”
theisraelproject.org, November 2013.
81 In early 2014, many Members of Congress supported a bill (Nuclear Weapon Free Iran Act of 2013, S. 1881, with at
least 59 co-sponsors) that might have imposed additional sanctions on Iran absent specific diplomatic outcomes, but a
number of factors reportedly kept the bill from being brought to a vote. These factors included Obama Administration
arguments that the bill had the potential to preclude the opportunity for serious negotiations to take place—possibly
increasing the prospects for military conflict with Iran—as well as the differing stances that various self-described pro-
Israel and American Jewish individuals and organizations took regarding the bill. See, e.g., Sara Sorcher and Elahe
Izadi, “How a Weaker AIPAC Makes It Easier to Vote Against Iran Sanctions,” National Journal, January 22, 2014.
For more information on sanctions generally, see CRS Report RS20871, Iran Sanctions, by Kenneth Katzman.
82 For background information on Syria and Iraq, see CRS Report RL33487, Armed Conflict in Syria: Overview and
U.S. Response, coordinated by Christopher M. Blanchard; and CRS Report RS21968, Iraq: Politics, Governance, and
Human Rights, by Kenneth Katzman.
83 Israeli officials have expressed concern about spillover threats to the Golan Heights border area. For basic
information on the U.N. Disengagement Observer Force (UNDOF) that has monitored this area since the Israel-Syria
cease-fire in 1974, see http://www.un.org/en/peacekeeping/missions/undof/facts.shtml.
84 Amos Harel and Gili Cohen, “Israel attacked Syrian base in Latakia, Lebanese media reports,” haaretz.com, January
27, 2014; Tom Vanden Brook, “Officials: Israeli airstrike inside Syria,” USA Today, October 31, 2013.
85 Liz Sly and Susan Haidamous, “Hezbollah warns Israel of retaliation for attack,” Washington Post, February 26,
2014.
86 “Israel launches airstrikes in Syria after teen is killed,” Associated Press, June 22, 2014.
87 See, e.g., Ronen Bergman, “The Spies Inside Damascus,” Foreign Policy, September 19, 2013.
88 Josef Federman, “With Eye on Iran, Israelis Seek US Action in Syria,” Associated Press, September 2, 2013.
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toppled,” given what could follow, and were “wary of creating any perception that they [were]
meddling in either American politics or the civil war in neighboring Syria.”89 After prospects of
an imminent U.S.-led military intervention faded in September 2013 with a Russian proposal for
Syria to give up its chemical weapons under international auspices—an arrangement reportedly
welcomed by Israeli officials—indications of Israel’s public ambivalence regarding the outcome
of Syria’s civil war continued.90
In an October 2013 briefing to the Knesset Foreign Affairs and Defense Committee, Israeli
Defense Minister Moshe Ya’alon reportedly enunciated the following “red lines” regarding Syria:
We will not allow the transfer of high-quality weapons from Syria to hostile forces,
particularly Hezbollah. We will not allow the transfer of chemical weapons, which there has
been no attempt so far to transfer. And certainly we will not tolerate any disruption of our
sovereignty in the Golan Heights.91
The inroads made by IS into Syria and Iraq in recent months have raised additional Israeli
security concerns. One concern is that Islamist-controlled areas of Syria are becoming safe
havens for international terrorists. According to French authorities, the French-Algerian suspect
in the May 2014 shooting deaths of an Israeli couple and two other people at the Jewish Museum
of Belgium (in Brussels) had spent over a year in Syria and had links with “radical Islamists.”92
Another concern is that IS might ultimately seek to undermine order and monarchical rule in
Jordan. In November 2005, militants from IS’s precursor organization, Al Qaeda in Iraq, carried
out a series of hotel bombings in Jordan’s capital, Amman.
Egypt93
During and since Egypt’s July 2013 military-backed ouster of formerly elected president
Muhammad Morsi—a Muslim Brotherhood figure—Egyptian forces have reportedly been very
active in countering heightened militant activity in Sinai and along its border with the Gaza Strip,
and in targeting Sinai-Gaza smuggling tunnels.94 Significant deployments of manpower and
weaponry, which have reportedly been approved by and coordinated with Israel pursuant to key
provisions in the two countries’ 1979 peace treaty, seem to have been part of larger Egyptian
military efforts to counter militant Islamist and tribal groups.95 Israel has sought continued U.S.
and international support for Egypt under its leadership since the July 2013 change of power, and
89 Ibid.
90 Barak Ravid, “Netanyahu’s office denies Ambassador Oren’s claim that Israel favors rebels in Syrian civil war,”
haaretz.com, September 17, 2013.
91 “‘Israel will not accept deal that allows Iran to enrich uranium,’” israelhayom.com, October 23, 2013.
92 “Brussels Jewish Museum killings: Suspect ‘admitted attack,’” BBC News, June 1, 2014.
93 For background information on Egypt, see CRS Report RL33003, Egypt: Background and U.S. Relations, by Jeremy
M. Sharp.
94 Egypt’s task appears to be complicated by Hamas’s possible harboring in Gaza of some militants who operate in
Sinai. See, e.g., Avi Issacharoff, “Egypt’s ire raised as Hamas harbors Sinai jihadists,” Times of Israel, August 22,
2013.
95 Ehud Yaari, “The New Triangle of Egypt, Israel, and Hamas,” Washington Institute for Near East Policy,
PolicyWatch 2193, January 17, 2014; Yossi Melman, “The Sinai Imbroglio,” Jerusalem Report, August 12, 2013.
These efforts have also disrupted aspects of Hamas’s activities in Gaza, though whether Egypt is willing or able to
decisively affect political and economic outcomes in Gaza is unclear. For more information, see CRS Report RL34074,
The Palestinians: Background and U.S. Relations, by Jim Zanotti.
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Egypt continues to play a key role in mediating between Israel, Hamas, and other Palestinian
militants when conflict breaks out.
A core Israeli dilemma is how to support a more robust Egyptian security presence in Sinai to
improve order and counter terrorism, while ensuring that Egypt adheres to the limitations on
military deployment that underpin its peace treaty with Israel. Addressing this dilemma appears to
have relevance to the treaty’s long-term durability. Sinai-based attacks across the border into
Israeli territory in 2011 and 2012 highlighted the threat posed by various terrorist groups,
including those with links to Palestinian Islamists and global jihadists.96 Additional border
incursions have subsequently occurred, and rockets have been fired from Sinai against Israel
during the July 2014 Israel-Gaza conflict.
Rocket Threat from Lebanon and Gaza
Israel continues to face a rocket threat from the Gaza Strip/Sinai Peninsula (via Hamas and other
militant groups) and Lebanon (via Hezbollah) that has expanded in geographical range in the past
few years.97 The July 2014 Israel-Gaza conflict demonstrates that despite a long period of calm
since the previous major conflict in November 2012, there has been little or no lasting progress in
arresting the rocket threat or in negotiating an easing of Israel’s perimeter of control in and
around Gaza. Meanwhile, Israel continues to deploy and develop programs to defend against a
wide variety of ranges of rockets and missiles.
The Palestinian Issue
At the same time, immediate prospects of a negotiated settlement of the Israeli-Palestinian
conflict seem dim. The most recent U.S.-backed round of peace talks ended unsuccessfully in
April 2014 after differences between the parties on long-standing core issues of Israeli-Palestinian
dispute were exacerbated by the parties’ respective actions during the negotiating process.98
Neither Israeli leaders, nor Fatah or Hamas leaders preoccupied with maintaining their domestic
credibility and respective indicia of control in the West Bank and Gaza, appear disposed to make
substantive compromises with one another. The Palestinian Authority government formed via
Fatah-Hamas consensus in June 2014 appears not to have meaningfully changed Hamas’s sway
over Gaza or its willingness to use violence against Israel, as evidenced by the July 2014 Israel-
Gaza conflict.
It is unclear to what extent diplomatic stalemate on the Palestinian issue could worsen regional
tensions and anti-Israel sentiment, or motivate greater international action seeking to establish
Israeli legal and moral culpability for its treatment of Palestinians.99 Risks inherent in periodically
recurring incidents of violence and vandalism involving Israelis (including West Bank settlers)
96 Melman, “The Sinai Imbroglio,” op. cit.
97 For more information on this and other potential threats to Israel from Palestinians in the West Bank and Gaza, see
CRS Report RL34074, The Palestinians: Background and U.S. Relations, by Jim Zanotti.
98 Edward Isaac-Dovere, “How the Obama peace process went ‘poof,’” Politico, April 13, 2014.
99 Jodi Rudoren, “With Peace Talks Off, Netanyahu Looks at Unilateral Moves,” New York Times, April 30, 2014,
featuring the following quote from Mustafa Barghouti, a member of the Palestine Liberation Organization (PLO)
Central Council, which voted in April 2014 to approve future international initiatives PLO Chairman Mahmoud Abbas
may choose to follow: “We will proceed with the U.N. treaties and gradually into U.N. agencies, the last of which will
be the International Criminal Court. There will be a moment when Israel will be brought to justice.”
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who live and travel in close proximity to Palestinians appear to have been demonstrated in the
prelude to the July 2014 Israel-Gaza conflict. The June 2014 killings of three Israeli teenagers and
the apparent retaliatory killing in July 2014 of a Palestinian teenager seem to have contributed to
the larger outbreak of violence. Israeli authorities face difficulty in the daily task of restraining
and protecting Israelis from such potentially inflammatory encounters.
Political figures from the Israeli left and center, as well as some U.S. and international
commentators, continue to stress what they characterize as an urgent need for Israel to resolve its
disputes with the Palestinians. Some analysts assert that Israeli leaders face a dilemma between
democracy and demography.100 Past prime ministers, including Yitzhak Rabin and Ehud Olmert,
claimed that coming to an arrangement with the Palestinians on the West Bank and Gaza would
be necessary in order to avoid the situation—otherwise probable within the next decade or two
based on demographic trends—of Jews ruling as a numerical minority over a numerical majority
of Arabs in historic Palestine. The concerns they enunciated focus on possible domestic and
international pressure associated with these demographics, and a choice between giving up
Jewish primacy or facing intensified accusations that Jewish rule in the areas of historic Palestine
is undemocratic and contrary to the principle of self-determination. Some demographers have
disputed the data underlying these concerns.101
During the most recent round of negotiations with the Palestine Liberation Organization, Israeli
Prime Minister Binyamin Netanyahu increasingly endorsed a two-state solution in public on
demographic grounds, but such concerns appear to be less of a motivating factor for key members
of the government such as Defense Minister Moshe Ya’alon102 and Economy Minister Naftali
Bennett.103 In the absence of negotiations, Israeli leaders could face domestic pressure to devise
other possible ways to reduce its responsibilities for West Bank Palestinians without
compromising national security.104 Some prominent Israelis are seeking to return “unilateral
disengagement” to the forefront of the country’s options for dealing with the Palestinian issue.105
Unilateral disengagement could involve Israeli withdrawal from significant parts of the West
Bank, particularly those outside of the existing and planned sections of an Israeli-conceived and -
constructed separation barrier106 on West Bank territory that in some places corresponds with the
100 Akiva Eldar, “Israel’s New Politics and the Fate of Palestine,” The National Interest, July/August 2012; Peter
Beinart, The Crisis of Zionism, New York: Times Books, 2012.
101 Considerable public debate in Israel takes place regarding Jewish-Arab demographics in Israel-West Bank-Gaza
Strip; their potential domestic, regional, and international implications; and possible Israeli options. See, e.g., Leslie
Susser, “The Right Touts a One-State Solution,” Jerusalem Report, July 29, 2013.
102 In a June 2012 interview, Ya’alon said, “We can live like this for another 100 years, too.... The demographic
argument is a lie.” Ari Shavit, “IDF chief of staff-turned-vice premier: ‘We are not bluffing,’” Ha’aretz Magazine, June
14, 2012.
103 Bennett, who heads the religious nationalist HaBayit HaYehudi (Jewish Home) party, prefers that Israel formally
annex areas of the West Bank under current Israeli security and administrative control—known as “Area C” in
reference to a 1995 Israel-PLO agreement and comprising approximately 60% of the West Bank’s territory. “Bennett
calls to annex 60 percent of West Bank,” Times of Israel, April 27, 2014. See map in CRS Report RL34074, The
Palestinians: Background and U.S. Relations, by Jim Zanotti.
104 Rudoren, “With Peace Talks Off, Netanyahu Looks at Unilateral Moves,” op. cit.
105 Raphael Ahren, “If peace talks fail: Michael Oren’s Plan B,” Times of Israel, February 26, 2014. This option first
gained popularity under late Prime Minister Ariel Sharon in the mid-2000s, and was the basis for Israel’s 2005
withdrawal from the Gaza Strip, but was sidetracked after Sharon’s debilitating stroke in 2006 and a number of
subsequent security-related and political developments.
106 Israelis and Palestinians generally use very different terminology to describe the barrier. Many Israelis call it the
“security barrier” or “security fence,” while most Palestinians refer to it as the “wall” or “apartheid wall.”
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Green Line (the armistice line that divided Israel from the West Bank prior to the 1967 Arab-
Israeli War) but in others goes significantly beyond it. Those Israelis touting this course of action
as a potential alternative to either the status quo or a negotiated solution with the Palestinians
emphasize that it would keep Israel in control of security in the Jordan Valley and other areas of
potential concern, and perhaps allow Israel to mitigate possible threats of international isolation
by courting U.S. and European support for the plan.107 The political feasibility of this alternative
in Israel is unclear, particularly in light of popular arguments largely blaming threats from the
Gaza Strip and southern Lebanon on past Israeli military withdrawals from those areas.
In addition to the apparent contemplation of unilateral action, Netanyahu has pledged that any
peace deal involving possible military withdrawals would be subject to a popular referendum.
Additionally, in March 2014, the Knesset unanimously voted to create a new constitutionally-
equivalent Basic Law requiring a popular referendum to approve any peace plan that would
relinquish control over East Jerusalem or the Golan Heights.
See “Peace Process Diplomacy” below for information and analysis on recent developments
regarding the peace process.
Concerns Regarding International Isolation and Economic Effects
Israel and many of its supporters have expressed concern about a sense of international
isolation.108 Israel’s willingness to show flexibility regarding its security practices, negotiating
demands, or diplomatic tactics may depend on whether its leaders believe that changes in their
policies can change attitudes toward them. Some Israelis argue or imply that efforts to isolate
them are led by implacable enemies determined to spread anti-Israel and anti-Semitic attitudes,
and thus bear little or no relationship to Israel’s policies.109 Other Israelis assert a more direct
relationship between Israeli policies, such as the construction of Jewish communities or
“settlements” (the term used most commonly internationally) in the West Bank and East
Jerusalem, and international attitudes toward Israel. This latter set routinely laments what they
characterize as uncompromising approaches by their leaders toward charged issues like the
Israeli-Palestinian conflict.110
107 See, e.g., Gili Cohen, “Top Israeli think tank: If talks fail, Israel should withdraw from 85% of West Bank,”
haaretz.com, January 28, 2014; Toby Greene, “Can Disengagement Secure Legitimacy? The European Angle,”
Strategic Assessment, vol. 16, no. 4, January 2014, pp. 47-58.
108 Israel’s president, Shimon Peres, and former prime ministers Ehud Olmert and Ehud Barak have reportedly warned
that “unless the occupation of the bulk of the West Bank ends, or Palestinians in the West Bank are given full voting
rights in Israel, the country will lose its claim to be a democracy. It will, says Mr. Peres, become a ‘pariah’, just as
South Africa did. The BDS [boycott, divestment, and sanctions] campaign may thus, he implies, become unstoppable.
Even the Americans might find it hard to go on backing Israel come hell or high water.” “Could two become one?”
Economist, March 16, 2013.
109 See, e.g., Barry Rubin, “The Region: Is Israel losing support?” jpost.com, January 6, 2013.
110 For example, in response to Israel’s announcement of plans to expand settlement construction in the West Bank and
East Jerusalem following the United Nations General Assembly vote in November 2012 to change the observer status
of “Palestine” (the PLO) within the U.N. system from that of an entity to a “non-member state,” former Israeli prime
minister Ehud Olmert was quoted as saying, “Netanyahu is isolating the State of Israel from [the] entire world in an
unprecedented way, and we are going to pay a difficult price for this in every aspect of our lives.” “Former PM Olmert:
Netanyahu is isolating Israel from the rest of the world,” haaretz.com, December 8, 2012.
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The possibility of international “isolation” of Israel has been increasingly discussed in
international media. Palestinian leaders might in the future pursue international initiatives
patterned after those in 2011 and 2012 in the United Nations and the U.N. Educational, Scientific
and Cultural Organization (UNESCO) (see “Peace Process Diplomacy” below). In addition, a
“BDS” (boycott, divestment, and sanctions) movement against Israel—ostensibly linked to its
treatment of Palestinians—has gained support among civil society organizations in a range of
countries.111 Some divestment from and boycotts of Israel or Israeli goods have resulted. For
example, the American Studies Association, a scholarly organization devoted to the
interdisciplinary study of American culture and history, voted for an academic boycott of Israeli
institutions in December 2013, raising attention and controversy with U.S. higher education
institutions and lawmakers. In June 2014, the U.S. Presbyterian Church voted to divest its
financial holdings from three U.S.-based companies that do business with Israeli parties in the
West Bank.112 Additionally, some European countries’ pension funds and companies have
withdrawn investments or canceled contracts. However, some reports question whether such
developments are properly characterized as constituting a boycott or even a significant threat to
Israeli economic activity.113
Prospects of reduced European Union (EU)-Israel economic cooperation have fueled statements
of concern by Israeli Finance Minister Yair Lapid, given that the EU is Israel’s largest trading
partner.114 The EU issued guidelines in July 2013 prohibiting funding to Israeli organizations in
West Bank, East Jerusalem, or Golan Heights settlements, and only permitted Israel’s inclusion in
its Horizon 2020 research and innovation program in late 2013 after Israel agreed that funding
would not go to organizations operating in settlements. Following the unsuccessful end of the
most recent round of talks, the EU has informed Israel that it does not allow the import of poultry
products produced in Israeli West Bank settlements, apparently due to EU directives that became
effective in January 2014 that do not recognize the jurisdiction of Israeli veterinarians supervising
poultry production in the West Bank.115 It is also possible that the EU might consider labeling
Israeli products in a way distinguishing those produced in the settlements from those within
Israel’s pre-1967 lines.116 Nevertheless, some analysts assert that EU member states are divided
over how to deal with Israel and unlikely to take measures substantially harming its economy. At
a March 5, 2014, congressional hearing, one witness testified that “no European government
supports any type of boycott against Israel.”117 Various reports indicate that the EU may be
111 See Sean F. McMahon, “The Boycott, Divestment, Sanctions Campaign: Contradictions and Challenges,” Race &
Class, vol. 55, issue 4, July-September 2014.
112 Mike Eckel, “US Presbyterian Church to Divest from Israeli-Linked Investments,” Voice of America, June 21, 2014.
113 See, e.g., David Rosenberg, “Don’t Buy the Boycott Hype,” Wall Street Journal Europe, February 28, 2014;
Crispian Balmer, “The threat of Israel boycotts more bark than bite,” Reuters, February 23, 2014.
114 “A campaign that is gathering weight,” Economist, February 8, 2014. See footnote 202 for information on Israel-EU
trade as a percentage of Israel’s total trade volume.
115 “Europe Bans Eggs and Chicken From Settlements,” JTA, May 23, 2014.
116 EU foreign policy chief Catherine Ashton has asserted that such labeling guidelines would represent “effective
implementation of existing EU legislation.” Text of July 8, 2013, letter from Ashton to European Commission
President Jose Manuel Barroso and seven commissioners, quoted in Stuart Winer, “Full text of EU foreign policy
chief’s letter on settlement labeling,” Times of Israel, July 23, 2013.
117 Prepared testimony of David Pollock, Washington Institute for Near East Policy, “Threats to Israel: Terrorist
Funding and Trade Boycotts,” House Committee on Foreign Affairs, Subcommittee on Terrorism, Trade, and
Nonproliferation, March 5, 2014.
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willing to provide financial incentives and even an upgrade in ties to both Israel and the
Palestinians in the event of a successful peace agreement.118
Some Members of Congress argue that the BDS movement is discriminatory and are seeking
legislative options to limit its influence. For example, H.R. 4009 (The Protect Academic Freedom
Act), would prohibit institutions of higher education from receiving federal funds if they
participate in boycotts of Israeli institutions or scholars.
Israel is likely to need U.S. help in improving or mitigating the damage done to various regional
and international relationships, though even with this help, any repairing of relationships may be
halting and reversible. U.S.-aided efforts by Israel to repair deteriorated relations with Turkey
provide an example. During President Barack Obama’s March 2013 visit to Israel, Prime Minister
Netanyahu apologized via telephone to Turkish Prime Minister Recep Tayyip Erdogan for any
operational mistakes by Israel during the Gaza flotilla incident of May 2010 “that might have led
to the loss of life or injury,” and also agreed to conclude an agreement on
“compensation/nonliability.”119 However, subsequent difficulties in concluding such an agreement
have been compounded by a number of developments, including statements from Erdogan
blaming Egypt’s July 2013 military takeover on Israel, and media reports that surfaced in October
2013 alleging that in 2012 Turkey revealed to Iran the names of sources used by Israel’s Mossad
intelligence agency.120 Though there have been indications from Erdogan that Israel-Turkey
relations could be normalized some time in 2014, debate persists on the extent to which
rapprochement is likely, and how it might take place.
Key U.S. Policy Issues
Overview
On May 14, 1948, the United States became the first country to extend de facto recognition to the
state of Israel. Over the years, despite occasional policy differences, the United States and Israel
have maintained close bilateral ties based on common democratic values, religious affinities, and
security interests. Relations have evolved through legislation; memoranda of understanding;
economic, scientific, and military agreements; and trade. Congress provides military assistance to
Israel and has enacted other legislation in explicit support of its security. Many analysts view
these forms of support as pillars of a regional security order—largely based on varying types and
118 Raphael Ahren, “EU Offers ‘Unprecedented’ Aid to Israelis, Palestinians for Peace Deal,” Times of Israel,
December 16, 2013.
119 Summary of conversation between Netanyahu and Erdogan from Israeli Prime Minister’s Office website, March 22,
2013. The May 2010 Gaza flotilla incident involved the boarding in international waters by Israeli commandos of a
ship that was commissioned by a Turkish Islamist non-governmental organization to carry goods to the Israeli-
blockaded Gaza Strip. Under disputed circumstances, the commandos reportedly killed eight Turks and an American of
Turkish ancestry and injured several others. To normalize relations, Turkey demanded that Israel apologize for its role
in the incident, provide agreeable compensation to the victims’ families, and lift its closure regime on the movement of
goods and people in and out of Gaza. Negotiations are ongoing regarding compensation, and Turkish officials are
indicating that they might interpret Israel’s allowance of Turkish humanitarian aid shipments to Gaza as a lifting of the
closure regime.
120 David Ignatius, “Turkey blows Israel’s cover for Iranian spy ring,” Washington Post, October 16, 2013.
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levels of U.S. arms sales to Israel and Arab countries—that have discouraged the outbreak of
major Arab-Israeli interstate conflict for more than 40 years.121
Israeli officials closely monitor U.S. actions and consult with U.S. counterparts in apparent efforts
to gauge and influence the nature and scope of future U.S. engagement on and commitment to
regional issues that implicate Israel’s security. In consequence of possible Israeli concerns about
these issues and about potential changes in levels of U.S. interest and influence in the region,
Israeli leaders and their supporters may actively try to persuade U.S. decision makers both that
• Israel’s security and the broader stability of the region continue to be critically
important for U.S. interests; and
• Israel has substantial and multifaceted worth as a U.S. ally beyond temporary
geopolitical considerations and shared ideals and values.122
These efforts would seek to perpetuate and bolster the already strong popular and official U.S.
commitment to Israel’s security. According to one U.S. commentator, American Israel Public
Affairs Committee (AIPAC) president Michael Kassen has deplored what he describes as “the
‘growing allure of isolationism’ in America, which is another way of saying that Israel, among
other nations, may command less deference and interest among a new and younger generation of
legislators.”123
Israel-sponsored efforts to emphasize its importance to the United States also may aim to
minimize possible demands by U.S. policy makers for Israel to compensate the United States for
a potentially greater commitment to Israel in response to regional challenges.124 Expectations
among some U.S. officials could include greater Israeli deference to and coordination with the
United States on regional military action and on diplomacy with Palestinians. This could fuel or
intensify U.S.-Israel disagreement over how Israel might continue its traditional prerogative of
“defending itself, by itself,” while also receiving external assistance.
Security Cooperation125
Background
Strong bilateral relations have fueled and reinforced significant U.S.-Israel cooperation on
defense, including military aid, arms sales, joint exercises, and information sharing. It has also
121 Malka, op. cit., pp. 93-94.
122 See, e.g., Michael Eisenstadt and David Pollock, Asset Test: How the United States Benefits from Its Alliance with
Israel, Washington Institute for Near East Policy, September 2012.
123 Jacob Heilbrunn, “Israel’s Fraying Image,” National Interest, May/June 2013.
124 According to one report, some U.S. military officers and analysts, including “senior Pentagon officials, generals and
independent defense strategists,” weigh the “direct military benefits the United States receives from its partnership with
Israel … against the geopolitical costs the relationship imposes on Washington in its dealings with the broader Arab
and Muslim world; some suggest a net negative outcome for Washington in the equation.” Nathan Guttman, “Israel Is
Strategic Asset After All,” Jewish Daily Forward, November 18, 2011.
125 The Jewish Virtual Library maintains a page that contains hyperlinked documents, speeches, and reports under the
heading “U.S.-Israel Relations: Strategic & Military Cooperation,” available at http://www.jewishvirtuallibrary.org/
jsource/US-Israel/strattoc.html.
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included periodic U.S.-Israel governmental and industrial cooperation in developing military
technology.
U.S. military aid has helped transform Israel’s armed forces into one of the most technologically
sophisticated militaries in the world. This aid for Israel has been designed to maintain Israel’s
“qualitative military edge” (QME) over neighboring militaries, since Israel must rely on better
equipment and training to compensate for a manpower deficit in any potential regional conflict.
U.S. military aid, a portion of which may be spent on procurement from Israeli defense
companies, also has helped Israel build a domestic defense industry, and Israel in turn ranks as
one of the top 10 exporters of arms worldwide.
On November 30, 1981, then U.S. Secretary of Defense Caspar Weinberger and Israeli Defense
Minister Ariel Sharon signed a memorandum of understanding (MOU) establishing a framework
for consultation and cooperation to enhance the national security of both countries. In November
1983, the two sides formed a Joint Political Military Group (JPMG) to implement provisions of
the MOU. Joint air and sea military exercises began in June 1984, and the United States has
constructed facilities to stockpile military equipment in Israel. In 1987, Israel was designated a
“major non-NATO ally” by the Reagan Administration, and in 1996, under the terms of Section
517 of the Foreign Assistance Act of 1961, as amended, Congress codified this status, affording
Israel preferential treatment in bidding for U.S. defense contracts and expanding its access to
weapons systems at lower prices. In 2001, an annual interagency strategic dialogue, including
representatives of diplomatic, defense, and intelligence establishments, was created to discuss
long-term issues. This dialogue was halted in 2003 over bilateral tensions related to Israeli arms
sales to China (see “Israeli Arms Sales to Other Countries” below), but resumed in 2005.
On May 6, 1986, Israel and the United States signed an MOU—the contents of which are
classified—for Israeli participation in the Strategic Defense Initiative (SDI/“Star Wars”), under
which U.S.-Israel co-development of the Arrow ballistic missile defense system has proceeded, as
discussed below. In 1998, another U.S.-Israel MOU referred to growing regional threats from
ballistic missiles. This MOU said that “In the event of such a threat, the United States
Government would consult promptly with the Government of Israel with respect to what support,
diplomatic or otherwise, or assistance, it can lend to Israel.”
Security cooperation extends to cooperation in countering terrorism. The Implementing
Recommendations of the 9/11 Commission Act of 2007 (P.L. 110-53, enacted on August 3, 2007)
recognizes Israel as a potential research partner for the Department of Homeland Security.
Congress and the President enacted the U.S.-Israel Enhanced Security Cooperation Act (P.L. 112-
150) in July 2012. The act contains non-binding “sense of Congress” language focusing largely
on several possible avenues of cooperation discussed below, including providing Excess Defense
Articles; boosting operational, intelligence, and political-military coordination; expediting
specific types of arms sales (such as F-35 fighter aircraft, refueling tankers, and “bunker buster”
munitions); and additional aid for Israel’s Iron Dome anti-rocket system and U.S.-Israel
cooperative missile defense programs. The act also extended deadlines for Israel to access U.S.
military stockpiles.
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U.S.-Israel Strategic Partnership Act of 2014
In early March 2013, slightly differing versions of a U.S.-Israel Strategic Partnership Act of 2013
were introduced in the House (H.R. 938) and the Senate (S. 462) with bipartisan co-sponsors.126
Both versions refer to Israel as a “major strategic partner” of the United States—a designation
whose meaning has not been further defined in U.S. law or by the executive branch—and contain
various other provisions that encourage continued and expanded U.S.-Israel cooperation in a
number of areas. Both versions also would extend the war reserves stockpile authority127 for
Israel through FY2015, and would seek to have the executive branch give Israel the same
Strategic Trade Authorization (STA) licensing exception for certain munitions and dual-use items
that 36 other countries currently have.128
On March 5, 2014, the House passed H.R. 938 (now known as the United States-Israel Strategic
Partnership Act of 2014) after the following amendments were added:
• A passage from a House-passed bill (H.R. 1992)129 that would require the
President to report to Congress on Israel’s QME every two years instead of the
current requirement of every four years.
• A passage from H.R. 1992 that would require the Secretary of State to report on
“the range of cyber and asymmetric threats posed to Israel by state and non-state
actors” and “the joint efforts of the United States and Israel to address the
threats.”
• A passage that would authorize $3 million to be spent on research pilot programs
between Israel and the Department of Homeland Security.
In May 2014, S. 462 was reportedly suspended from consideration by the Senate Foreign
Relations Committee after Senator Bob Corker added an amendment.130 The amendment, which
the Obama Administration strongly opposed, would have required the Administration to submit
any subsequent agreement with Iran on its nuclear program to Congress within three days for
scrutiny and possible disapproval.131
Preserving Israel’s Qualitative Military Edge (QME)
Since the late 1970s, successive Administrations have argued that U.S. arms sales are an
important mechanism for addressing the security concerns of Israel and other regional countries.
During this period, some Members of Congress have argued that sales of sophisticated weaponry
126 To date, S. 462 has at least 63 co-sponsors.
127 For information on the war reserves stockpile authority, under which the United States maintains munitions
stockpiles for its own use and for Israel’s use in emergency situations with U.S. permission, see CRS Report RL33222,
U.S. Foreign Aid to Israel, by Jeremy M. Sharp
128 For information on the STA licensing exception, see Export Control Reform Initiative Factsheet #4: License
Exception “Strategic Trade Authorization” (STA). Available at:
http://new.export.gov/cms_files/ECR%20Factsheet%204%20-%20STA_Latest_eg_main_047475.pdf. Israel, along
with seven other countries, currently has a more limited form of the STA licensing exception.
129 H.R. 1992, the Israel QME Enhancement Act, passed the House by a vote of 399-0 on December 11, 2013.
130 Chemi Shalev, “Obama administration blasts Corker Amendment: We can’t have 535 negotiators with Iran,”
Ha’aretz, May 21, 2014. Text of the amendment is available at http://www.scribd.com/doc/224546275/Dav-14623.
131 Josh Rogin, “Key Senator Wants to Force Vote on Iran Deal,” Daily Beast, May 16, 2014.
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to Arab countries may erode Israel’s QME over its neighbors. However, successive
Administrations have maintained that Arab countries are too dependent on U.S. training, spare
parts, and support to be in a position to use sophisticated U.S.-made arms against the United
States, Israel, or any other U.S. ally in a sustained campaign. Arab critics routinely charge that
Israeli officials exaggerate the threat they pose. Ironically, the threat of a nuclear-armed Iran,
though it has partially aligned Israeli and Sunni Arab interests in deterring a shared rival, may be
exacerbating Israeli fears of a deteriorated QME, as Saudi Arabia and other Gulf states
dramatically increase defense procurements from U.S. and other foreign suppliers.
In 2008, Congress enacted legislation requiring that any proposed U.S. arms sale to “any country
in the Middle East other than Israel” must include a notification to Congress with a
“determination that the sale or export of such would not adversely affect Israel’s qualitative
military edge over military threats to Israel.”132 In parallel with this legal requirement, U.S. and
Israeli officials continually signal their shared understanding of the U.S. commitment to
maintaining Israel’s QME. However, the codified definition focuses on preventing arms sales to
potential regional Israeli adversaries based on a calculation of conventional military threats. It is
unclear whether calls for revisiting this definition or rethinking its implementation may arise in
light of the evolving nature of potential regional threats to Israel’s security. As mentioned above,
H.R. 1992 and H.R. 938 would require a report on cyber and asymmetric threats to Israel and
U.S.-Israel efforts to address these threats.
Additionally, what might constitute a legally defined adverse effect to QME is not clarified in
U.S. legislation. After the passage of the 2008 legislation, a bilateral QME working group was
created allowing Israel to argue its case against proposed U.S. arms sales in the region.133 Former
Secretary of Defense Robert Gates wrote that, in 2010, the Obama Administration addressed
concerns that Israel’s leaders had about the possible effect on QME of a large U.S. sale of F-15
aircraft to Saudi Arabia by agreeing to sell Israel additional F-35 aircraft.134
However, absent legislative clarification, the legality of future U.S. arms sales to other regional
aid recipients, partners, or allies—including Egypt, Saudi Arabia, Jordan, Lebanon, and Iraq—
could become increasingly subject to challenge both by Israeli officials feeling heightened
sensitivity to regional threats and by sympathetic U.S. policy makers.
132 §36(h) of the Arms Export Control Act, which contains the “qualitative military edge” requirement, was added by
§201(d) of the Naval Vessel Transfer Act of 2008 (P.L. 110-429). The act defines QME as “the ability to counter and
defeat any credible conventional military threat from any individual state or possible coalition of states or from non-
state actors, while sustaining minimal damages and casualties, through the use of superior military means, possessed in
sufficient quantity, including weapons, command, control, communication, intelligence, surveillance, and
reconnaissance capabilities that in their technical characteristics are superior in capability to those of such other
individual or possible coalition of states or non-state actors.” The details of official U.S. assessments of QME are
generally classified.
133 Barbara Opall-Rome, “Israeli Brass Decry U.S. Arms Sales to Arab States,” DefenseNews, January 23, 2012.
According to this article, the U.S. side of the working group is led by the Undersecretary of Defense for Policy and
Assistant Secretary of State for Political-Military Affairs, while the Israeli side is led by the Defense Ministry’s policy
chief and the Israel Defense Forces director of planning.
134 Eli Lake (citing Duty by Robert Gates), “In Gates Book, Details of Israel’s Hard Bargaining Over Saudi Arms,”
Daily Beast, January 10, 2014. Gates recounted that he told Prime Minister Netanyahu and then Defense Minister Ehud
Barak that they should welcome the sale to Saudi Arabia because of a common Israeli-Saudi interest in countering Iran,
and that if the Saudis did not purchase U.S. arms, they would purchase arms from countries (such as France or Russia)
that would not include Israel’s QME in their calculations. A former senior Pentagon official was cited as saying that
Israel’s concerns were based on “worries about what might happen if the House of Saud lost power to a more radical
regime.” Ibid.
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U.S. Security Guarantees?
Although the United States and Israel do not have a mutual defense treaty or agreement that
provides formal U.S. security guarantees,135 successive Administrations have either stated or
implied that the United States would help provide for Israel’s defense in the context of discussing
specific threats, such as from Iran.136 Both houses of Congress routinely introduce and pass
resolutions supporting Israel’s right to defend itself and U.S. efforts to bolster Israel’s capacity for
self-defense. Some resolutions have included language that could imply support for more active
U.S. measures to defend Israel. For example, H.Res. 523 and H.Con.Res. 21, both of which
overwhelmingly passed the House (in 2005 and 2007, respectively) and addressed a possible
Iranian threat, also both reasserted the “commitment of the United States to defend the right of
Israel to exist as a free and democratic state.”137 Additionally, as mentioned above, S.Res. 65,
which the Senate passed in May 2013, stated that the United States should provide “diplomatic,
military, and economic support to the Government of Israel in its defense of its territory, people,
and existence” in connection with certain specified contingencies relating to Iran’s nuclear
program.
A former Israeli deputy national security advisor has written about potential benefits and
drawbacks for Israel of more formal U.S. security guarantees for Israel, including a possible
“nuclear umbrella.” A 2006 article that this former official co-authored on a potential Iranian
threat said:
Such an arrangement would seem to be a “no-brainer” for Israel. Yet Jerusalem might in fact
be quite reluctant to conclude one. This, for three primary reasons, each deeply entrenched in
Israel’s national security thinking. First, it would fear a loss of freedom of action, due to the
contractual requirement to consult on the means of addressing the threat. Second, it would be
concerned lest the US demand that Israel divulge and even forego its independent
capabilities. And third, it might worry that the US would not live up to its nuclear
commitments, much as NATO allies feared during the Cold War.138
Perhaps at least partly due to some of the reasons this former Israeli official outlines, U.S.
Administrations and Congress have supported Israel’s ability to defend itself by embracing and
135 The United States and Israel do, however, have a Mutual Defense Assistance Agreement (TIAS 2675, dated July 23,
1952) in effect regarding the provision of U.S. military equipment to Israel (see “End-Use Monitoring”), and have
entered into a range of stand-alone agreements, memoranda of understanding, and other arrangements varying in their
formality.
136 President Obama, in a February 5, 2012, NBC interview, said while responding to questions regarding a possible
Israeli military strike against Iranian nuclear facilities: “I will say that we have closer military and intelligence
consultation between our two countries than we ever have. And my number one priority continues to be the security of
the United States, but also the security of Israel.” In a March 2006 speech against the backdrop of Iran’s hostile rhetoric
toward Israel and pursuit of a nuclear program, President George W. Bush said, “I made it clear, I’ll make it clear
again, that we will use military might to protect our ally Israel.” Seymour M. Hersh, “The Iran Plans,” New Yorker,
April 17, 2006.
137 Additionally, in response to Iraqi Scud missile attacks on Israel during the 1991 Gulf War, both the House
(H.Con.Res. 41) and Senate (S.Con.Res. 4) unanimously passed January 1991 resolutions “reaffirming America’s
continued commitment” to provide Israel with the means to maintain its freedom and security.
138 Richard N. Rosecrance and Chuck Freilich, “Confronting Iran: A US Security Guarantee for Israel?” bitterlemons-
international.org, July 6, 2006. See also Chuck Freilich, Speaking About the Unspeakable: U.S.-Israeli Dialogue on
Iran’s Nuclear Program, Washington Institute for Near East Policy, PolicyFocus #77, December 2007; Malka, op. cit.,
pp. 84-89.
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even codifying the concept of helping maintain Israel’s “qualitative military edge” (QME) over
regional threats, as discussed above.
U.S. Aid and Arms Sales to Israel
Specific figures and comprehensive detail regarding various aspects of U.S. aid and arms sales to
Israel are discussed in CRS Report RL33222, U.S. Foreign Aid to Israel, by Jeremy M. Sharp.
This includes information on conditions that generally allow Israel to use its military aid earlier
and more flexibly than other countries.
Israel is the largest cumulative recipient of U.S. foreign assistance since World War II. From 1976
to 2004, Israel was the largest annual recipient of U.S. foreign assistance, but has since been
supplanted—first by Iraq, then by Afghanistan. Since 1985, the United States has provided
approximately $3 billion in grants annually to Israel. In the past, Israel received significant
economic assistance, but now almost all U.S. bilateral aid to Israel is in the form of Foreign
Military Financing (FMF). U.S. FMF to Israel represents approximately one half of total FMF
and 20% of Israel’s defense budget. The remaining four years of a 10-year bilateral memorandum
of understanding commits the United States to $3.1 billion annually from FY2015 to FY2018,
subject to congressional appropriations. Israel uses approximately 75% of its FMF to purchase
arms from the United States, in addition to receiving U.S. Excess Defense Articles (EDA).
During an April 2013 visit to Israel, Secretary of Defense Chuck Hagel confirmed arms sales
worth a total of $10 billion to Israel, Saudi Arabia, and the United Arab Emirates.139 The deal,
which most observers assert is intended to counter Iranian regional influence, would reportedly
include new-generation KC-135 refueling tankers that could increase Israeli long-range strike
capabilities, such as for military action against Iranian nuclear facilities.140 It would also include
the sale to Israel of the advanced tilt-rotor V-22 Osprey aircraft, which had not previously been
sold to foreign countries. In a report before the deal’s official announcement, a New York Times
article stated that “Congressional officials said members were seeking assurances that the
package was in keeping with American policy to guarantee Israel’s ‘qualitative military edge’
while not recklessly emboldening Israeli hawks.”141
The United States also generally provides some annual American Schools and Hospitals Abroad
(ASHA) funding and funding to Israel for migration assistance. Loan guarantees, arguably a form
of indirect aid, also remain available to Israel through FY2015 under the U.S.-Israel Enhanced
Security Cooperation Act (P.L. 112-150).
Table 3. U.S. Bilateral Aid to Israel
(historical $ in millions)
Military
Economic
Immig.
Year Total Grant
Grant
Grant ASHA
All
other
1949-1996 68,030.9 29,014.9
23,122.4
868.9
121.4 14,903.3
139 David Alexander, “Arms deal with Middle East allies signal to Iran: Hagel,” Reuters, April 21, 2013.
140 Thom Shanker, “Arms Deal with Israel and 2 Arab Nations Is Near,” New York Times, April 19, 2013.
141 Ibid.
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Military
Economic
Immig.
Year Total Grant
Grant
Grant ASHA
All
other
1997 3,132.1
1,800.0 1,200.0
80.0
2.1 50.0
1998 3,080.0
1,800.0 1,200.0
80.0 —
—
1999 3,010.0
1,860.0 1,080.0
70.0 —
—
2000 4,131.85
3,120.0 949.1
60.0
2.75 —
2001 2,876.05
1,975.6 838.2
60.0
2.25 —
2002 2,850.65
2,040.0 720.0
60.0
2.65 28.0
2003 3,745.15
3,086.4 596.1
59.6
3.05 —
2004 2,687.25
2,147.3 477.2
49.7
3.15 9.9
2005 2,612.15
2,202.2 357.0
50.0
2.95 —
2006 2,534.5
2,257.0 237.0
40.0 —
0.5
2007 2,503.15
2,340.0 120.0
40.0
2.95 0.2
2008 2,423.9
2,380.0
—
40.0 3.90
—
2009 2,583.9
2,550.0
—
30.0 3.90
—
2010 2,803.8
2,775.0
—
25.0 3.80
—
2011 3,029.22
3,000.0
—
25.0 4.225
—
2012 3,098.0
3,075.0
—
20.0 3.00
—
2013 2.943.2
2.793.2
—
15.0 — —
2014
3,115.0
3,100.0
—
15.0 — —
2015
3,110.0 3,100.0
—
10.0 — —
Request
Total 121,357.57 73,623.4
30,897.0
1,698.2
162.075 14,991.9
Notes: FY2000 military grants include $1.2 billion for the Wye agreement and $1.92 billion in annual military
aid. The figure for FY2013 military grant aid was calculated after factoring in budget sequestration. For
information on U.S. loan guarantees to Israel, see CRS Report RL33222, U.S. Foreign Aid to Israel, by Jeremy M.
Sharp.
Iron Dome and Missile Defense Cooperation
Congress routinely provides hundreds of millions of dollars in additional annual assistance for
Israel’s Iron Dome anti-rocket system142 and joint U.S.-Israel missile defense programs such as
Arrow and David’s Sling.143
142 Reports based on Israeli military sources indicate that initial uses of Iron Dome in 2011 and 2012, including during
the November 2012 Israel-Gaza conflict, showed a high rate of success—possibly around 80%—in intercepting short-
range rockets fired from Gaza. It is unknown if the United States or another third party has independently verified
Israeli claims, and analysts have debated the claims’ validity. Although Iron Dome is costly in comparison with the
Gaza-based rockets it has intercepted, analysts debate whether the system’s cost-effectiveness is better measured by
armament attrition or by comparing the system’s costs with estimates of damage that would likely occur in its absence.
See, e.g., Philip Giraldi, “Is Iron Dome the Maginot Line?” theamericanconservative.com, December 3, 2012; Matthew
Fargo, “Iron Dome – A Watershed for Missile Defense?” csis.org/blog, December 3, 2012. For more information, see
CRS Report RL33222, U.S. Foreign Aid to Israel, by Jeremy M. Sharp.
143 For one analysis of Iron Dome and its possible implications for U.S. and Israeli missile defense efforts, see Peter
(continued...)
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Table 4. Defense Budget Appropriations for U.S.-Israeli Missile Defense:
FY2006-FY2014
(historical $ in millions)
Arrow III
(High
David’s Sling
Iron
Fiscal Year
Arrow II
Altitude)
(Short-Range)
Dome
Total
FY2006 122.866 —
10.0
— 132.866
FY2007 117.494 —
20.4
— 137.894
FY2008 98.572 20.0
37.0
— 155.572
FY2009 74.342 30.0
72.895
— 177.237
FY2010 72.306 50.036 80.092
— 202.434
FY2011 66.427 58.966 84.722
205.0
415.115
FY2012 58.955 66.220 110.525
70.0a
305.700
FY2013b
40.800
74.700
137.500
194.0
479.736
FY2014 44.363 74.707 149.712
235.309
504.091
FY2015
(Part of total)
(Part of total)
(Part of total)
175.972
272.775c
Request
a. These funds were not appropriated by Congress, but reprogrammed by the Obama Administration from
other Department of Defense accounts.
b. Figures for FY2013 calculated after factoring in budget sequestration.
c. The Missile Defense Agency(MDA)’s FY2015 request includes $96.803 million for all three Israeli
Cooperative Programs (Arrow II, Arrow III, and David’s Sling) and a separate request for $175.9 million for
Iron Dome. The MDA forecasts Israeli Cooperative spending over several fiscal years in advance. Congress
has appropriated funding for these various programs exceeding MDA’s request over the past several fiscal
years. MDA requests for Israeli Cooperative programs (not including Iron Dome) from FY2011 to FY2014
have been $122 million (FY2011), $106.1 million (FY2012), $99.83 mil ion (FY2013), and $95.78 million
(FY2014). Based on reports from the House (H.Rept. 113-473) and Senate (S.Rept. 113-211)
Appropriations Committees in June and July 2014, respectively, accompanying the Department of Defense
Appropriations Act, 2015 (H.R. 4870), Congress appears set to appropriate the fol owing amounts for
FY2015 on top of the FY2015 Administration request: $175 million for Iron Dome (subject to reporting
requirements relating to U.S. co-production), and $172.039-173.8 mil ion for Israeli Cooperative programs.
That would result in total FY2015 appropriations of $56.201 million for Arrow II, $74.707-76.468 million
for Arrow III, $137.934 million for David’s Sling, and $350.972 million for Iron Dome.
Israeli-Palestinian Issues
For historical background on these issues, see CRS Report RL34074, The Palestinians:
Background and U.S. Relations, by Jim Zanotti.
(...continued)
Dombrowski, et al., “Demystifying Iron Dome,” National Interest, July-August 2013.
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Peace Process Diplomacy
Overview
The internationally mandated land-for-peace framework that has undergirded U.S. policy since
the June 1967 Arab-Israeli War presupposes broad Arab acceptance of any final-status Israeli-
Palestinian agreement, and, more fundamentally, Arab acceptance of Israel. Israelis insist that
their security needs must be met for them to be willing to relinquish West Bank land in a
negotiated two-state solution with the Palestinians. However, Israeli leaders appear to have
become increasingly concerned—given ongoing Arab political change—that they are much less
able to count on future positive ties even with states such as Egypt and Jordan, given uncertainty
regarding the mid- to long-term stability of their regimes.144 This assessment has likely led Israel
to perceive greater risks in a potential land-for-peace deal, perhaps due to a calculation that
continued possession of territory may be a more reliable guarantor of security than an agreement
with one or more Arab entities.
For their part, Palestinian leaders and Arab state rulers may find it harder to move toward formal
peace with Israel if they become more accountable to public opinion focused on Israel and its
indicia of control in the West Bank, Gaza, and Jerusalem. Formally, the Arab League remains
committed to “land for peace,” as reflected in the 2002 Arab Peace Initiative.145
The United States, together with the other members of the international Quartet (the European
Union, the United Nations Secretary-General’s office, and Russia), continues to advocate for
Israeli-Palestinian talks aimed at a peace deal under the framework initially established by the
Oslo agreements of the 1990s. During the first two years of President Obama’s and Prime
Minister Netanyahu’s time in office, attempts by the United States to get Israel to freeze
settlement construction beyond the Green Line were only partially successful (see “Settlements”
below) and did not lead to a meaningful resumption of negotiations.146
During the next two years, PLO Chairman Mahmoud Abbas opted to pursue initiatives outside of
the negotiating process at the United Nations and U.N.-related agencies. These initiatives were
aimed at increasing the international legitimacy of Palestinian claims of statehood in the West
Bank and Gaza. On November 29, 2012, the U.N. General Assembly (UNGA) adopted
Resolution 67/19, changing the permanent observer status of the PLO (recognized as “Palestine”
144 Egypt and Jordan were routinely held out as examples showing that even if making peace with Israel was unpopular
with the countries’ populations, their autocratic or monarchical leaders could normalize and maintain relations with
Israel without significantly losing their capacity or legitimacy to rule.
145 The Arab Peace Initiative offers a comprehensive Arab peace with Israel if Israel were to withdraw fully from the
territories it occupied in 1967, agree to the establishment of a Palestinian state with a capital in East Jerusalem, and
provide for the “[a]chievement of a just solution to the Palestinian Refugee problem in accordance with UN General
Assembly Resolution 194.” The initiative was proposed by then Crown Prince (now King) Abdullah of Saudi Arabia,
adopted by the 22-member Arab League (which includes the PLO), and later accepted by the 56-member Organization
of the Islamic Conference (now the Organization of Islamic Cooperation) at its 2005 Mecca summit. The text of the
initiative is available at http://www.bitterlemons.org/docs/summit.html.
146 Netanyahu accepted the idea of a two-state solution in principle, but insisted that any Palestinian state would need to
be demilitarized and remain subject to indefinite Israeli control of its airspace, the electromagnetic spectrum used for
telecommunications, and the Jordan Valley. President Obama’s May 2011 speeches calling for renewed Israeli-
Palestinian negotiations focused on the issues of borders and security parameters. Netanyahu complained that Obama’s
proposal to use the Green Line as the reference point for border negotiations did not properly take into account
historical Israeli security concerns regarding defensibility of territory.
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within the U.N. system) from an “entity” to a “non-member state.”147 This took place a year after
the PLO gained admission in November 2011 to the U.N. Educational, Scientific and Cultural
Organization (UNESCO).148 The change that Resolution 67/19 made to the PLO’s U.N.
permanent observer status is largely symbolic. However, it may increase the probability of
Palestinians and other international actors taking future steps—particularly in the International
Criminal Court (ICC)—toward legal action against Israelis for alleged violations of international
laws and norms regarding the treatment of people and property in the West Bank and Gaza.149
The Issues
Media reports indicate that substantive differences divide Israeli and Palestinian negotiators on
core issues of dispute. PLO Chairman Mahmoud Abbas is reportedly reluctant to explicitly
recognize Israel as “the nation-state of the Jewish people” because of the potential repercussions
for Palestinian refugees’ claim to a right of return and for Israeli Arabs’ rights.150 Other Arab
foreign ministers reportedly informed Secretary of State John Kerry that they will “not accept
Israel as a Jewish state nor compromise on Palestinian sovereignty in Jerusalem.”151 Prime
147 138 member states voted in favor of Resolution 67/19, nine voted against (including the United States and Israel),
and 41 abstained. The PLO has had permanent observer status at the United Nations since 1974. “Palestine” maintains
many of the capacities it had as an observer entity—including participation in General Assembly debates and the ability
to co-sponsor draft resolutions and decisions related to proceedings on Palestinian and Middle East issues. However, it
is not a member of the United Nations, and does not have the right to vote or to call for a vote in the General Assembly.
148 However, the PLO’s fall 2011 application to obtain membership in the United Nations has not cleared the U.N.
Security Council’s membership committee. U.N. Security Council, “Report of the Committee on the Admission of
New Members concerning the application of Palestine for admission to membership in the United Nations,”
S/2011/705, November 11, 2011.
149 An April 2012 opinion by the ICC’s Office of the Prosecutor (OTP), which determined that there was no basis for it
to consider a 2009 declaration of consent by “Palestine” to ICC jurisdiction in the West Bank and Gaza, appeared to
rule that guidance from the U.N. General Assembly might help determine whether the PLO or Palestinian Authority
had competence as a state to consent to ICC jurisdiction. International Criminal Court, Office of the Prosecutor,
“Situation in Palestine,” April 3, 2012. In a November 2013 report, the OTP stated that Resolution 67/19 did not make
the 2009 Palestinian declaration of consent valid for purposes of ICC jurisdiction, and that the OTP could not open a
new preliminary examination of the situation. The OTP explained, however, that the status of Palestine as a non-
member observer state in the General Assembly “is of direct relevance to the issue of the Court’s jurisdiction.”
International Criminal Court, Office of the Prosecutor, Report on Preliminary Examination Activities, 2013, November
2013, pp. 53-54. Since the General Assembly’s resolution, no Palestinian representative has lodged a new ad hoc
declaration accepting the ICC’s jurisdiction in the West Bank and Gaza. For more information on the ICC, see CRS
Report R41116, The International Criminal Court (ICC): Jurisdiction, Extradition, and U.S. Policy, by Matthew C.
Weed.
150 Israel’s insistence on this explicit recognition has reportedly gained in emphasis over time, and Palestinian officials
claim that the demand is a “new addition” to negotiations that was not included at the time the Oslo process began in
the 1990s. See, e.g., Dan Perry, “Israeli demand sparks ‘Jewish state’ debate,” Associated Press, February 21, 2014;
Jodi Rudoren, “Sticking Point in Peace Talks: Recognition of a Jewish State,” New York Times, January 1, 2014. In
May 8, 2014, remarks, then U.S. Special Envoy for Israeli-Palestinian Negotiations Martin Indyk said that Israeli
insistence on recognition of Israel as the nation-state of the Jewish people was introduced into an Israeli-Palestinian
negotiating context by Tzipi Livni when she was Israeli foreign minister during the 2007-2008 Annapolis process. The
Pursuit of Middle East Peace: A Status Report, Ambassador Martin Indyk, Washington Institute for Near East Policy,
May 8, 2014.
151 Elhanan Miller, “Arab ministers back Abbas in rejecting ‘Jewish’ Israel,” Times of Israel, January 13, 2014. The
United States sometimes seeks regional Arab support on certain positions that are domestically unpopular with
Palestinians, probably in order to create political space for PLO leaders to more seriously consider accepting these
positions or to apply pressure on them to do so. In April 2013, representatives of the Arab League agreed that land
swaps could be an element of a conflict-ending agreement between Israel and the PLO. For information on the Arab
Peace Initiative, see footnote 145.
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Minister Netanyahu has repeatedly raised the issue of Jewish refugees from predominantly
Muslim Middle Eastern countries, though it is unclear to what extent Israel plans to insist that the
issue be considered in the negotiations alongside that of Palestinian refugees.152
Additionally, despite efforts in 2013 by Kerry and a team of U.S. experts headed by retired
Marine General John R. Allen153 to bridge the divide on security arrangements in the Jordan
Valley border area of the West Bank, reports asserted that neither side embraced the proposals.
PLO negotiators publicly reject an indefinite Israeli military presence within what they assert
would be sovereign Palestinian territory,154 while Israel may not be willing to agree to phase out
its presence155—largely owing to recent historical instances in which Israeli military withdrawal
from southern Lebanon (2000) and the Gaza Strip (2005) led to the entrenchment of adversarial
Islamist militants armed with rockets that have hit Israeli population centers and remain capable
of doing so. Contention has also persisted between the parties over possible land swaps156 and
mutual allegations of incitement and provocation.157
July 2013-April 2014 Israeli-Palestinian Talks
President Obama endorsed the July 2013 resumption of direct talks—facilitated under the
auspices of Secretary of State Kerry—between Israeli and Palestine Liberation Organization
negotiators in Washington, DC. The parties agreed on a nine-month timeline for the talks. After
some seemingly conflicting statements by Secretary Kerry in late 2013 regarding whether
negotiations would focus on all major issues of dispute158 or give priority to borders and security,
he reportedly sought a framework document that would clarify the parameters for final
negotiations on several issues. Presumably in response to widespread observations that such a
framework revisited the pattern of prior U.S.-backed formulas in using interim agreements as
152 See, e.g., “Don’t forget what we lost, too,” Economist, February 15, 2014. In the 112th Congress, Representative
Jerrold Nadler sponsored H.R. 6242 (“To direct the President to submit to Congress a report on actions the executive
branch has taken relating to the resolution of the issue of Jewish refugees from Arab countries.”). The bill garnered 10
co-sponsors.
153 General Allen commanded all U.S. and U.S.-allied forces in Afghanistan from 2011 to 2013.
154 In a January 2014 interview for a conference held by Israel’s Institute for National Security Studies, Abbas said that
he could accept a “transitional period” (presumably applying to Jordan Valley security) of no more than three years for
Israel to gradually withdraw, at which point a third party—Abbas proposed NATO—could take Israel’s place as a
security guarantor. Footage with English translation available at
http://www.youtube.com/watch?v=Cx9tY8JU1kQ&list=PLCapdZwzDpNlwSoHcbkXL9sMVbQcQMaQ-.
155 Shimon Shiffer, “Ya’alon: Kerry should win his Nobel and leave us alone,” Ynetnews, January 14, 2014. Israeli
Defense Minister Ya’alon has reportedly responded to proposals by the Kerry-Allen team as follows: “You presented
us with a plan that is based on sophisticated technology, on satellites, sensors, war rooms with television screens—
without a presence of our troops on the ground. And I ask you—how will technology respond when a Salafist or
Islamic Jihad cell tries to commit a terror attack against Israeli targets? ... Which satellites will handle the rocket
industry developing today ... that will be fired at Tel Aviv and central Israel?” Josef Federman, “Israeli defense chief
comments spark spat with US,” Associated Press, January 14, 2014.
156 Foreign Minister Avigdor Lieberman advocates the idea of exchanging an area of Israeli territory that has large Arab
population concentrations (est. 300,000, known as the “Arab Triangle”) and is adjacent to the northern West Bank for
Jewish settlement blocs in the West Bank. Such an exchange, which appears to be objectionable to most Palestinians
and Israeli Arabs, would decrease Israel’s Arab population and apparently involve revoking the Israeli citizenship of
the Triangle’s residents.
157 William Booth, “Israel says Palestinians push a ‘culture of hate’ that could undermine talks,” Washington Post,
January 7, 2014.
158 These include questions of security parameters, borders, Jewish settlements, water rights, Palestinian refugees, and
the status of Jerusalem.
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initial steps toward an elusive final resolution, on January 5, 2014, Kerry made the following
statement in Jerusalem:
I want to reiterate—we are not working on an interim agreement. We are working on a
framework for negotiations that will guide and create the clear, detailed, accepted roadmap
for the guidelines for the permanent status negotiations, and can help those negotiations
move faster and more effectively.159
Media reports during the talks revealed apparent disagreements between U.S. and Israeli officials
regarding Secretary Kerry’s approach,160 as well as possible differences of opinion within the
Obama Administration.161
As the nine-month timeline neared its end, long-standing Israeli-Palestinian differences on core
issues of dispute were exacerbated by the parties’ respective actions during the negotiating
process.162 After successive visits in March 2014 to Washington by Israeli Prime Minister
Binyamin Netanyahu and PLO Chairman Mahmoud Abbas failed to forge consensus on a
framework document, Kerry sought to have the parties agree to simply extend the negotiating
timeframe. However, in late March, a previously agreed timetable for Israel’s release of 26
Palestinian prisoners (which would have been the fourth such prisoner release since the
resumption of talks) came and went without the release occurring, followed by an Israeli
announcement related to plans for additional residential construction in East Jerusalem. On April
1, Abbas signed documents aimed at having “Palestine” accede to 15 multilateral treaties and
conventions.163 These actions led to mutual recriminations, countermoves, and increased tension
in the West Bank and Jerusalem. Congressional testimony and additional leaked remarks by
Secretary Kerry fueled Israeli public debate over whether Kerry was blaming or—intentionally or
not—inviting opprobrium upon Israel or some of its leaders for the talks’ difficulties and the lack
of a conflict-ending resolution, though Kerry and Israel’s Ambassador to the United States Ron
Dermer indicated that this was not the case.164 Neither Israel nor the PLO was willing to accept
the other’s demands in exchange for a last-minute extension of the talks.
159 State Department transcript of remarks by Secretary of State John Kerry, “Remarks at Solo Press Availability,”
David Citadel Hotel, Jerusalem, January 5, 2014.
160 Shiffer, op. cit.; Dan Williams, “Israel minister apologizes to Kerry over scorn for peace drive,” Reuters, January
14, 2014.
161 Michal Shmulovich, “‘Kerry fails to get Obama backing to confront Israel on peace terms,’” Times of Israel,
February 9, 2014; Michael Wilner, “White House reaffirms Obama support for Kerry peace push,” jpost.com, February
10, 2014.
162 Isaac-Dovere, op. cit.
163 PLO Negotiations Affairs Department, “Q&A: Palestine’s Accession to International Treaties,” April 2, 2014,
available at http://nad-plo.org/userfiles/file/fact%20sheets/Q&A%20Accession.pdf. The PLO claims that the status of
the “State of Palestine” as a non-member observer state of the United Nations—a status it received pursuant to U.N.
General Assembly Resolution 67/19 in November 2012—entitles it to join a total of 63 treaties, conventions, and
agencies, and that it “will do so in the best interests of its people, as and when it sees fit.” For more information on this
resolution and various Palestinian international initiatives, see CRS Report RL34074, The Palestinians: Background
and U.S. Relations, by Jim Zanotti; CRS Report R43614, Membership in the United Nations and Its Specialized
Agencies, by Luisa Blanchfield and Marjorie Ann Browne; and CRS Report R42999, The United Nations Educational,
Scientific, and Cultural Organization (UNESCO), by Luisa Blanchfield and Marjorie Ann Browne.
164 Barak Ravid, “Lieberman: Kerry says didn't blame Israel for crisis in talks,” Ha’aretz, April 9, 2014; Michael
Gordon, “Kerry Apologizes for Remark That Israel Risks Apartheid,” New York Times, April 28, 2014; Rebecca
Shabad, “Israeli ambassador: Kerry has not threatened us,” thehill.com, May 1, 2014.
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On April 23, rival Palestinian factions Fatah (the leading group in the PLO, whose leaders in the
Palestinian Authority [PA] administer portions of the West Bank) and Hamas165 (a non-PLO
group that had and still has some de facto control of the Gaza Strip) announced a deal aimed at
unifying PA rule over the West Bank and Gaza and holding PA elections. This was followed by an
April 24 Israeli security cabinet decision to suspend talks and not to conduct negotiations with
any government formed in consensus with Hamas. In the ensuing days, President Obama and
Secretary Kerry acknowledged that the talks had stalled for the time being, and expressed hope
that circumstances would facilitate their continuation in the near future. Martin Indyk, a former
U.S. Ambassador to Israel who had been appointed as U.S. Special Envoy for Israeli-Palestinian
Negotiations in July 2013, resigned his post in June 2014.166
The Path Ahead
A number of questions surround the future of the Israeli-Palestinian peace process, including:
• How will the July 2014 Israel-Gaza conflict and its aftermath affect prospects for
future negotiations and a two-state solution?
• Can the PA government formed in June 2014 via consensus between Fatah and
Hamas last,167 and if it does, can it help the PLO become a more credible
representative of its Palestinian constituency with Israel and other international
actors?
• Will the United States put forward parameters or a framework on core issues of
conflict meant to advance the process, and if so, when?
Jerusalem
Israel annexed East Jerusalem (which includes the walled Old City, with its Temple
Mount/Haram al Sharif and Western Wall, and most of the surrounding “historic basin”) and some
of its immediate West Bank vicinity in 1967—shortly after occupying these areas militarily in the
June 1967 Arab-Israeli War. In doing so, Israel joined these newly occupied areas,168 which
featured a predominantly Arab population, to the predominantly Jewish western part of the city it
had controlled since 1948. Israel proclaimed this entire area to be Israel’s eternal, undivided
capital.169 Polls indicate that a large majority of Israelis believe that a united Jerusalem is their
capital and support Jewish residential construction of neighborhoods (the Israeli term) or
settlements (the general internationally used term) within that part of Jerusalem that is east of the
165 Hamas is an Islamist group designated by the U.S. government and many other Western governments as a terrorist
organization.
166 Rebecca Shabad, “Middle East envoy resigns after peace talks collapse in Israel,” thehill.com, June 27, 2014.
167 For more information on the consensus PA government, see CRS Report RS22967, U.S. Foreign Aid to the
Palestinians, by Jim Zanotti.
168 Jordan had occupied these areas militarily since 1948, and unilaterally annexed them and the entire West Bank in
1950. It only ceded its claims to the PLO in 1988.
169 In 1980, under the first Likud Party government, the Israeli Knesset passed the Basic Law: Jerusalem—Capital of
Israel, which declares “Jerusalem, complete and united, is the capital of Israel.” See http://www.mfa.gov.il for the
complete text of the Basic Law. Israel had first declared Jerusalem to be its capital in 1950.
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Green Line and within the Israeli-drawn municipal borders.170 Israel’s annexation of areas beyond
the Green Line is generally not internationally recognized.
Successive U.S. Administrations of both political parties since 1948 have maintained that the fate
of Jerusalem is to be decided by negotiations and have discouraged the parties from taking
actions that could prejudice the final outcome of those negotiations. Moreover, the Palestinians
envisage East Jerusalem as the capital of their future state. However, the House of
Representatives passed H.Con.Res. 60 in June 1997, and the Senate passed S.Con.Res. 21 in May
1997. Both resolutions called on the Clinton Administration to affirm that Jerusalem must remain
the undivided capital of Israel.
A related issue is the possible future relocation of the U.S. embassy from Tel Aviv to Jerusalem.
Proponents argue that Israel is the only country where a U.S. embassy is not in the capital
identified by the host country, that Israel’s claim to West Jerusalem—proposed site of an
embassy—is unquestioned, and/or that Palestinians must be disabused of their hope for a capital
in Jerusalem. Opponents say such a move would undermine prospects for Israeli-Palestinian
peace and U.S. credibility with Palestinians and in the Muslim world, and could prejudge the final
status of the city. The Jerusalem Embassy Act of 1995 (P.L. 104-45) provided for the embassy’s
relocation by May 31, 1999, but granted the President authority, in the national security interest,
to suspend limitations on State Department expenditures that would be imposed if the embassy
did not open. Presidents Clinton, Bush, and Obama have consistently suspended these spending
limitations, and the embassy’s status has remained unchanged.
The State Department Authorization Act for FY2002-FY2003 (P.L. 107-228) urged the President
to begin relocating the U.S. embassy “immediately.” The act also sought to (1) prohibit the use of
appropriated funds for the operation of U.S. diplomatic facilities in Jerusalem unless such
facilities were overseen by the U.S. ambassador to Israel; and (2) allow Israel to be recorded as
the place of birth of U.S. citizens born in Jerusalem. When signing the act into law, President
George W. Bush wrote in an accompanying “signing statement” that the various provisions on
Jerusalem would, “if construed as mandatory … impermissibly interfere with the president’s
constitutional authority to conduct the nation’s foreign affairs.” The State Department declared,
“our view of Jerusalem is unchanged. Jerusalem is a permanent status issue to be negotiated
between the parties.”
The case of Zivotofsky v. Clinton,171 remanded by the Supreme Court in March 2012 for further
action in lower federal courts, could decide or have implications for Congress’s constitutional
authority on questions relating to the status of Jerusalem and could influence its future ability to
direct the executive branch in its conduct of foreign affairs more broadly. The case involves a
U.S. citizen who was born in Jerusalem, and whose parents are suing on his behalf to have the
State Department reflect Israel as his birthplace on his passport pursuant to P.L. 107-228. On
remand, the U.S. Court of Appeals for the District of Columbia Circuit found in July 2013 that the
“President’s power to recognize foreign nations is exclusive and trumps Congress’s authority to
regulate passports.”172 The Supreme Court will reconsider the case, probably in the fall of 2014.
170 “Poll: Most Israelis Support East Jerusalem Construction,” Ynetnews.com, March 22, 2010.
171 Zivotofsky v. Clinton, U.S. Supreme Court Docket No. 10-699, March 26, 2012.
172 CRS Legal Sidebar, Jennifer K. Elsea, Legislative Attorney, “Congress Can’t Dictate Jerusalem Policy,” August 12,
2013, available at http://www.crs.gov/LegalSidebar/details.aspx?ID=612&Source=search. The D.C. Circuit’s July 2013
opinion is available at
(continued...)
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Over successive Congresses, including the 113th, various Members have periodically introduced
substantially similar versions of a Jerusalem Embassy and Recognition Act (e.g., H.R. 104, H.R.
252, and S. 604) or thematically related bills or resolutions (e.g., H.R. 2846, H.R. 3629, and
H.Con.Res. 48). Such bills and resolutions seek the embassy’s relocation and would remove or
advocate for the removal of the President’s authority to suspend the State Department expenditure
limitations cited above.
Settlements
Israel has approximately 139 residential communities (known internationally and by significant
segments of Israeli society as “settlements”), approximately 105 additional settlement outposts
unauthorized under Israeli law, and other military and civilian land-use sites in the West Bank. In
addition, depending on how one defines what constitutes a separate neighborhood or settlement in
East Jerusalem, Israeli authorities and Jewish Israeli citizens have established roughly between 14
and 17 main residential areas there. Approximately 300,000 Israelis live in West Bank
settlements, with roughly 200,000 more in East Jerusalem.173 All of these residential communities
are located in areas that the Palestinians view as part of their future state. The first settlements
were constructed following the 1967 war, and were initially justified as directly associated with
Israel’s military occupation of the West Bank. Major residential settlement building began in the
late 1970s with the advent of the pro-settler Gush Emunim (“Bloc of the Faithful”) movement
and the 1977 electoral victory of Menachem Begin and the Likud Party. Existing settlements were
expanded and new ones established throughout the 1990s and 2000s despite the advent of the
Madrid-Oslo peace process with the Palestinians. Israelis who defend the settlements’ legitimacy
generally use some combination of legal, historical, strategic, nationalistic, or religious
justifications.174
The international community generally considers Israeli construction on territory beyond the
Green Line to be illegal.175 Israel retains military control over the West Bank and has largely
completed the separation barrier mentioned above. The barrier is intended to separate Israelis and
Palestinians and prevent terrorists from entering Israel. Palestinians object to the barrier being
built on their territory because it cuts Palestinians off from East Jerusalem and, in some places,
bisects their landholdings and communities. It also is seen by many as an Israeli device to
unilaterally determine borders between Israel and a future Palestinian state.
(...continued)
http://www.cadc.uscourts.gov/internet/opinions.nsf/C8DC59BCC7D10E6D85257BB10051786D/$file/07-5347-
1447974.pdf.
173 These figures and additional data on settlements and outposts are available at http://www.fmep.org/settlement_info.
174 For more information on the history of the settlements and their impact on Israeli society, see Idith Zertal and Akiva
Eldar, Lords of the Land: The War for Israel’s Settlements in the Occupied Territories, 1967-2007, New York: Nation
Books, 2007; Gershom Gorenberg, The Accidental Empire: Israel and the Birth of the Settlements, 1967-1977, New
York: Times Books, 2006.
175 The most cited international law pertaining to Israeli settlements is the Fourth Geneva Convention, Part III, Section
III, Article 49 Relative to the Protection of Civilian Persons in Time of War, August 12, 1949, which states in its last
sentence, “The Occupying Power shall not deport or transfer parts of its own civilian population into the territory it
occupies.” Israel insists that the West Bank does not fall under the international law definition of “occupied territory,”
but is rather “disputed territory” because the previous occupying power (Jordan) did not have an internationally
recognized claim to it, and given the demise of the Ottoman Empire at the end of World War I and the end of the
British Mandate in 1948, no international actor has superior legal claim to it.
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U.S. policy on settlements has varied since 1967. Until the 1980s, multiple Administrations either
stated or implied that settlements were “contrary to international law,” with President Carter’s
Secretary of State Cyrus Vance stating explicitly that settlements were “illegal” in 1980.176
President Reagan later stated that settlements were “not illegal,” but “ill-advised” and
“unnecessarily provocative.” Since then, the executive branch has generally refrained from
pronouncements on the settlements’ legality.177 A common U.S. stance has been that settlements
are an “obstacle to peace.” Loan guarantees to Israel currently authorized by U.S. law are subject
to possible reduction by an amount equal to the amount Israel spends on settlements in the
occupied territories. The executive branch made its most recent reduction in FY2005.178
An April 2004 letter from President George W. Bush to then Israeli Prime Minister Ariel Sharon
explicitly acknowledged that “in light of new realities on the ground, including already existing
major Israeli populations (sic) centers, it is unrealistic to expect that the outcome of final status
negotiations will be a full and complete return to the armistice lines of 1949.” Partly because of
such statements from U.S. policy makers, Arab critics routinely charge that U.S. support of Israel
indirectly supports settlement activity.
Upon taking office, in the context of its attempts to restart the peace process between Israelis and
Palestinians, the Obama Administration called for Israel to totally freeze all settlement activity,
including in East Jerusalem. In his speech in Cairo in May 2009, President Obama said, “The
United States does not accept the legitimacy of continued Israeli settlements. This construction
violates previous agreements and undermines efforts to achieve peace. It is time for these
settlements to stop.”179 PLO leaders followed suit and made a settlement freeze a precondition for
their return to the peace talks. Israel responded with a partial 10-month moratorium, but tentative
efforts to restart negotiations did not take hold during that time. In February 2011, the United
States vetoed a draft U.N. Security Council resolution that would have characterized Israeli
settlements in the West Bank and East Jerusalem as illegal. All other 14 members of the Council,
including the United Kingdom, France, and Germany, voted for the draft resolution. Susan Rice,
then the U.S. Permanent Representative to the United Nations, clarified that the Administration
still opposed settlement construction as illegitimate and at cross-purposes with peace efforts.180
Given the structure of Israeli society and politics, it may be difficult to impose an external
restraint on settlement activity. Settlers affect the political and diplomatic calculus through the
following means:
176 Daniel Kurtzer, “Do Settlements Matter? An American Perspective,” Middle East Policy, vol. 16, issue 3, fall 2009.
177 Nicholas Rostow, “Are the Settlements Illegal?” The American Interest, March/April 2010.
178 For more information on this issue, see CRS Report RL33222, U.S. Foreign Aid to Israel, by Jeremy M. Sharp.
179 U.S. and Israeli leaders publicly differed on whether Obama’s expectations of Israel contradicted statements that the
George W. Bush Administration had made. Some Israeli officials and former Bush Administration officials said that
the United States and Israel had reached an unwritten understanding that “Israel could add homes in settlements it
expected to keep [once a final resolution with the Palestinians was reached], as long as the construction was dictated by
market demand, not subsidies.” Glenn Kessler and Howard Schneider, “U.S. Presses Israel to End Expansion,”
Washington Post, May 24, 2009. This article quotes former Bush Administration deputy national security advisor
Elliott Abrams as saying that the United States and Israel reached “something of an understanding.” The accounts of
former Bush Administration officials diverge in their characterization of U.S.-Israel talks on the subject, but the Obama
Administration has insisted that if understandings ever existed, it is not bound by them. Ethan Bronner, “Israelis Say
Bush Agreed to West Bank Growth,” New York Times, June 3, 2009.
180 “United States vetoes Security Council resolution on Israeli settlements,” UN News Centre, February 18, 2011.
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(1) influence over key voting blocs in Israel’s coalition-based parliamentary system
(although they do not all share the same ideology or interests, settlers constitute about 6%
of the Israeli population);
(2) renegade actions to foment public protest and even violence;181 and
(3) what they represent for some symbolically, emotionally, and even spiritually as guardians
of the last frontier for a country whose founding and initial survival depended on
pioneering spirit in the face of adversity.
The Netanyahu government’s periodic announcements of new plans for settlement construction,
possible consideration of legalizing some settlement outposts, approval of subsidies and loans for
some settlers, and repeated insistence that outside actors will not dictate Israeli policy on this
subject appears to demonstrate the government’s sensitivity to these domestic concerns.182 Some
Israelis caution that the demand to provide security to settlers and their infrastructure and
transportation links to Israel could perpetuate Israeli military control in the West Bank even if
other rationales for maintaining such control eventually recede. Protecting settlers is made more
difficult and manpower-intensive by some settlers’ provocations of Palestinian West Bank
residents and Israeli military authorities. The government complied in 2012 with rulings by
Israel’s Supreme Court requiring it to dismantle two outposts. It sought to placate settler
opposition to dismantlement by relocating the displaced outpost residents within the boundaries
of settlements permitted under Israeli law.183
Sensitive Defense Technology and Intelligence Issues
Arms sales, information sharing, and co-development of technology between the United States
and Israel raises questions about what Israel might do with capabilities or information it acquires.
The sale of U.S. defense articles or services to Israel and all other foreign countries is authorized
subject to the provisions of the Arms Export Control Act (AECA) (see §40A of P.L. 90-629, as
amended)184 and the regulations promulgated to implement it. Section 3 of the AECA stipulates
that in order to remain eligible to purchase U.S. defense articles, training, and services, foreign
governments must agree not to use purchased items and/or training for purposes other than those
permitted by the act, or to transfer them to third-party countries (except under certain specifically
enunciated conditions), without the prior consent of the President.
Israeli Arms Sales to Other Countries
Israel is a major arms exporter—with India, China, and Russia among its customers or past
customers.185 The United States and Israel have regularly discussed Israel’s sale of sensitive
181 Mark Weiss, “Settlers Destroy Trees on West Bank,” Irish Times, July 22, 2009: “Militant settlers, who often act
independently, in defiance of the official settler leadership, confirmed that a ‘price tag’ policy exists under which
revenge attacks will be carried out against Palestinians every time the government acts to remove outposts.”
182 Joel Greenberg, “Netanyahu strengthens his base within Likud,” Washington Post, February 2, 2011.
183 Joel Greenberg, “Israeli settlers evacuated from West Bank outpost following court order,” Washington Post,
September 2, 2012.
184 22 U.S.C. §2785.
185 Other customers for Israeli arms include Germany, Spain, France, Canada, Australia, Turkey, Singapore, Brazil,
Italy, the Netherlands, Poland, Finland, Azerbaijan, and Romania. Israel is also reportedly seeking to expand arms
(continued...)
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security equipment and technology to various countries, especially China.186 In 2003, Israel’s
agreement to upgrade radar-seeking Harpy Killer drones that it sold to China in 1999 dismayed
the Department of Defense (DOD). DOD retaliated by suspending its joint strategic dialogue with
Israel and its technological cooperation with the Israel Air Force on the F-35 Joint Strike Fighter
(JSF) aircraft and several other programs, among other measures.
On August 17, 2005, DOD and the Israeli Ministry of Defense issued a joint press statement
reporting that they had signed an understanding “designed to remedy problems of the past that
seriously affected the technology security relationship and to restore confidence in the technology
security area.”187 Thereafter, the U.S.-Israel joint strategic dialogue resumed. Sources have
reported that this understanding has given the United States de facto veto power over Israeli third-
party arms sales that the United States deems harmful to its national security interests.188 In
December 2013, the then head of Israel’s Defense Export Control Agency (DECA), Meir Shalit,
resigned after a joint U.S.-Israel investigation concluded that an Israeli miniature cooling system
that can be used for missiles, and that had been licensed for sale to a French company, had been
retransferred to China.189 In the months prior to this development, the Israeli state comptroller had
reportedly published a report indicating that DECA was inadequately enforcing proper defense
export controls.190
With regard to Israel-India defense industrial cooperation, in February 2014, DefenseNews cited
representatives from Israel’s Rafael Advanced Defense Systems and India’s Defence Research
and Development Organisation in stating that the two countries plan to collaborate on an
integrated anti-missile system, with a contract expected to be signed by mid-2014.191
(...continued)
exports to Latin America.
186 Office of Naval Intelligence, Worldwide Challenges to Naval Strike Warfare, 1996. The 1997 edition of this report
said that the design for China’s J-10 fighter (also known as the F-10—the designation used in the report) “had been
undertaken with substantial direct assistance, primarily from Israel and Russia, and with indirect assistance through
access to U.S. technologies.” ONI, Worldwide Challenges to Naval Strike Warfare, 1997. See also Robert Hewson,
“Chinese J-10 ‘benefited from the Lavi project,’” Jane’s Defence Weekly, May 16, 2008; Duncan L. Clarke and Robert
J. Johnston, “U.S. Dual-Use Exports to China, Chinese Behavior, and the Israel Factor: Effective Controls?” Asian
Survey, Vol. 39, No. 2, March-April 1999. The Lavi fighter (roughly comparable to the U.S. F-16) was developed in
Israel during the 1980s with approximately $1.5 billion in U.S. assistance, but did not get past the prototype stage.
187 “U.S. Israel Agree to Consult on Future Israeli Weapons Sales -Nations Affirm Joint Commitment to Address
Global Security Challenges,” U.S. State Department Press Release, August 17, 2005.
188 Barbara Opall-Rome, “U.S. OKs Israel-China Spy Sat Deal,” DefenseNews.com, October 12, 2007. This article
quotes a U.S. official as saying, “We don't officially acknowledge our supervisory role or our de facto veto right over
their exports.... It’s a matter of courtesy to our Israeli friends, who are very serious about their sovereignty and in
guarding their reputation on the world market.”
189 Barbara Opall-Rome, “Israel Replaces Export Control Chief After Tech Transfer to China,” DefenseNews, January
3, 2014.
190 Yaakov Lappin, “Report finds failings in defense export supervision,” Jerusalem Post, July 18, 2013.
191 Vivek Raghuvanshi, “India, Israel to Build Anti-Missile System,” DefenseNews, February 6, 2014. India faces
potential missile threats from Pakistan and China. Frank O’Donnell and Yogesh Joshi, “India’s Missile Defense: Is the
Game Worth the Candle,” Diplomat, August 2, 2013.
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End-Use Monitoring
Sales of U.S. defense articles and services to Israel are made subject to the terms of both the
AECA and the July 23, 1952, Mutual Defense Assistance Agreement between the United States
and Israel (TIAS 2675). The 1952 agreement states:
The Government of Israel assures the United States Government that such equipment,
materials, or services as may be acquired from the United States ... are required for and will
be used solely to maintain its internal security, its legitimate self-defense ... and that it will
not undertake any act of aggression against any other state.
Past Administrations have acknowledged that some Israeli uses of U.S. defense articles may have
gone beyond the requirements under the AECA and the 1952 agreement that Israel use such
articles for self-defense and internal security purposes. These past Administrations have
transmitted reports to Congress stating that “substantial violations” of agreements between the
United States and Israel regarding arms sales “may have occurred.” The most recent report of this
type was transmitted in January 2007 in relation to concerns about Israel’s use of U.S.-supplied
cluster munitions during military operations against Hezbollah in Lebanon during 2006.192 Other
examples include findings issued in 1978, 1979, and 1982 with regard to Israel’s military
operations in Lebanon and Israel’s air strike on Iraq’s nuclear reactor complex at Osirak in 1981.
The Reagan Administration suspended the delivery of cluster munitions to Israel from 1982 to
1988 based on concerns about their use in Lebanon. The Reagan Administration also briefly
delayed a scheduled shipment of F-15 and F-16 aircraft to Israel following Israel’s 1981 strike on
Iraq. If Israel takes future action with U.S. defense articles to preempt perceived security threats,
allegations of AECA violations could follow, depending on specific circumstances.193
Espionage-Related Cases
In the past 25 years, there have been at least three cases in which U.S. government employees
were convicted of disclosing classified information to Israel or of conspiracy to act as an Israeli
agent. The most prominent is that of Jonathan Pollard, who pled guilty in 1986 with his then wife
Anne to selling classified documents to Israel. Israel granted Pollard—who is serving a life
sentence in U.S. federal prison—citizenship in 1996 and, in 1998, acknowledged that Pollard had
been its agent. Prime Minister Netanyahu and several of his predecessors have unsuccessfully
petitioned various Presidents to pardon Pollard.194 In early April 2014, some reports indicated that
192 Sean McCormack, U.S. Department of State Spokesman, Daily Press Briefing, Washington, DC, January 29, 2007.
The Consolidated Appropriations Act, 2008 (P.L. 110-161) significantly restricted the export of U.S.-manufactured
cluster munitions. Restrictions on cluster munitions exports have been carried forward to apply to appropriations in
subsequent years as well. Since 2008, Israel has been acquiring domestically manufactured cluster munitions.
193 Some Palestinian groups and other Arab and international governments, along with at least one Member of
Congress, have characterized Israeli military operations against Palestinians (such as Israel’s 2008-2009 Operation Cast
Lead, which was directed against Hamas in the Gaza Strip) as acts of aggression. During the 111th Congress, the Senate
and the House overwhelmingly passed resolutions during the week of January 5, 2009, in connection with Operation
Cast Lead that supported Israel’s right to defend itself (S.Res. 10 and H.Res. 34). Representative Dennis Kucinich,
however, submitted a letter to then Secretary of State Condoleezza Rice arguing that “Israel’s most recent attacks
neither further internal security nor do they constitute ‘legitimate’ acts of self-defense.” Office of Representative
Dennis J. Kucinich, “Press Release: Israel May Be in Violation of Arms Export Control Act,” January 6, 2009.
194 The second case is that of Department of Defense analyst Lawrence Franklin, who pled guilty in 2006 to disclosing
classified information to an Israeli diplomat and to two lobbyists from the American Israel Public Affairs Committee
(AIPAC). The third case is that of Ben-Ami Kadish, who had worked at the U.S. Army’s Armament Research,
(continued...)
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the United States might be willing to release Pollard as part of an arrangement to extend or restart
Israeli-Palestinian talks. The prospect of Pollard’s release under these circumstances generated
mixed reactions from Members of Congress, including opposition from the chairs of both
intelligence committees, among strong views on the case within U.S. government circles and
society at large.195
Israel’s Nuclear Status and Non-Proliferation196
Consensus among media and expert reports is that Israel possesses an arsenal of 80 to 200 nuclear
weapons.197 The United States has countenanced Israel’s nuclear ambiguity since September
1969, when Israeli Prime Minister Golda Meir and U.S. President Richard Nixon reportedly
reached an accord whereby both sides agreed never to acknowledge Israel’s nuclear arsenal in
public.198
Israel’s ambiguous nuclear status is viewed by some members of the international community as
an obstacle to advancing non-proliferation objectives. The 1995 Non-Proliferation Treaty (NPT)
Review Conference adopted a resolution that called for “all States in the Middle East to take
practical steps” toward establishing “an effectively verifiable Middle East zone free of weapons
of mass destruction, nuclear, chemical and biological, and their delivery systems.” The Obama
Administration has stated its support for the goal of a nuclear-weapon-free zone in the Middle
East. Israel is not an NPT state, nor has it ratified the Chemical Weapons Convention (CWC),
though it signed the CWC in 1993.
Recent events concerning Iran and Syria have re-focused international attention on Israel’s
presumed but undeclared nuclear and chemical weapons arsenals.199 On September 26, 2013,
Iranian President Hassan Rouhani called for Israel to become a signatory to the Nuclear Non-
Proliferation Treaty (NPT) under the rationale that no exceptions to nuclear nonproliferation in
the Middle East should be countenanced by the international community.200 Media reports in late
October 2013 indicated that Israeli officials may be discreetly discussing with Arab and Iranian
representatives the possibility of participating in a committee to discuss demilitarizing weapons
of mass destruction throughout the region.201
(...continued)
Development, and Engineering Center in Dover, New Jersey. Kadish pled guilty in 2009 to one count of conspiracy to
act as an unregistered agent of Israel.
195 Tom Cohen, “27 years later, Jonathan Pollard case remains a diplomatic thorn,” cnn.com, April 1, 2014.
196 For information on Israel’s nuclear activities, see CRS Report R40439, Nuclear Weapons R&D Organizations in
Nine Nations, coordinated by Jonathan E. Medalia.
197 See footnote 64.
198 Eli Lake, “Secret U.S.-Israel Nuclear Accord in Jeopardy,” Washington Times, May 6, 2009.
199 Barak Ravid, “Israel opts to stay vague on chemical arms policy in wake of Syria disarmament,” haaretz.com,
October 31, 2013.
200 Matthew Lee and Lara Jakes, “Iran’s Rouhani Calls On Israel To Sign 1979 Nuclear Non-Proliferation Treaty,”
Associated Press, September 26, 2013.
201 Sarah Leah Lawrent and M. Miskin, “Israeli, Arab Reps Meet to Discuss WMD-Free Middle East,”
israelnationalnews.com, October 31, 2013.
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Bilateral Trade Issues
The United States is Israel’s largest single-country trading partner,202 and—according to data from
the U.S. International Trade Commission—Israel is the United States’s 26th-largest trading
partner.203 The two countries concluded a Free Trade Agreement (FTA) in 1985, and all customs
duties between the two trading partners have since been eliminated. The FTA includes provisions
that protect both countries’ more sensitive agricultural sub-sectors with non-tariff barriers,
including import bans, quotas, and fees. Israeli exports to the United States have grown since the
FTA became effective. Qualified Industrial Zones (QIZs) in Jordan and Egypt are considered part
of the U.S.-Israel free trade area. In 2013, Israel imported $13.7 billion in goods from and
exported $22.7 billion in goods to the United States.204 The United States and Israel have
launched several programs to stimulate Israeli industrial and scientific research, for which
Congress has authorized and appropriated funds on several occasions.205
The “Special 301” provisions of the Trade Act of 1974, as amended, require the U.S. Trade
Representative (USTR) to identify countries which deny adequate and effective protection of
intellectual property rights (IPR). In April 2005, the USTR elevated Israel from its “Watch List”
to its “Priority Watch List” because it had an “inadequate data protection regime” and intended to
pass legislation to reduce patent term extensions. The USTR has retained Israel on the Priority
Watch List in subsequent years, including in 2012, when it was one of 13 countries on the list.206
Pending Visa Waiver Legislation
Both the House and the Senate versions of the U.S.-Israel Strategic Partnership Act (H.R. 938 and
S. 462, respectively) would encourage Israel’s inclusion in the U.S. visa waiver program.207 The
Senate version would amend the Immigration and Nationality Act (8 U.S.C. §1187(c)(2)) to
exempt Israel from a requirement that links program country eligibility to a specific maximum
rate of past nonimmigrant visa refusals. S. 462 also might provide an exemption for Israel from
the general legal requirement that a country provide reciprocal visa-free travel privileges to U.S.
citizens if the Secretary of Homeland Security (after consultation with the Secretary of State)
202 According to a document entitled “Israel: EU Bilateral Trade and Trade with the World” generated by the European
Commission’s Directorate General for Trade on May 23, 2013, the countries of the European Union account for 31.6%
of Israel’s total trade volume, while the United States accounts for 20.1%.
203 Statistics on Israel’s status relative to other U.S. trading partners compiled by the U.S. International Trade
Commission, available at http://dataweb.usitc.gov/SCRIPTS/cy_m3_run.asp.
204 Statistics compiled by Foreign Trade Division, U.S. Census Bureau, available at http://www.census.gov/foreign-
trade/balance/c5081.html.
205 CRS Report RL33222, U.S. Foreign Aid to Israel, by Jeremy M. Sharp.
206 The other 12 are Algeria, Argentina, Canada, Chile, China, India, Indonesia, Pakistan, Russia, Thailand, Ukraine,
and Venezuela. 2012 Special 301 Report, available at http://www.ustr.gov. According to this report, the United States
and Israel reached an Understanding on Intellectual Property Rights, “which concerns several longstanding issues
regarding Israel’s regime for pharmaceutical products, on February 18, 2010. As part of the Understanding, Israel
committed to strengthen its laws on protection of pharmaceutical test data and patent term extension, and to publish
patent applications promptly after the expiration of a period of eighteen months from the time an application is filed.
The Understanding provided, among other things, that Israel would submit legislation regarding these matters within
180 days of the conclusion of the Understanding. The United States agreed to move Israel to the Watch List once Israel
submitted appropriate legislation to the Knesset, and to remove Israel from the Special 301 Watch List once the
Government enacted legislation implemented Israel’s obligations fully.”
207 For more information, see CRS Report RL32221, Visa Waiver Program, by Alison Siskin.
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certifies that Israel has made “every reasonable effort, without jeopardizing the security of the
State of Israel, to ensure that reciprocal travel privileges are extended to all United States
citizens.”
The possibility of an exemption for Israel on the reciprocity requirement has reportedly “drawn
criticism from lawmakers, Arab-American groups and some Jewish critics, who say it would
validate Israel’s practice of profiling U.S. citizens of Arab, Muslim and Palestinian extraction and
often denying them entry to the country on unspecified security grounds.”208 Senator Barbara
Boxer, the bill’s sponsor, has been cited as arguing that the provision in question would “give the
United States leverage to pressure Israel” to stop the reported differential treatment of U.S.
citizens based on ethnic background.209
Additionally, the intelligence community and officials from the State and Homeland Security
departments have reportedly communicated concerns to Members and committees of Congress
that allowing Israel into the visa waiver program could make the United States more vulnerable to
Israeli espionage, particularly industrial espionage.210 In response to these reported concerns,
Israeli officials have flatly denied that Israel conducts espionage in the United States.211
H.R. 938 would not provide visa waiver exemptions for Israel, but would instead simply state that
Israel should be designated a visa waiver program country when it satisfies the requirements for
inclusion. The visa waiver provision in S. 462 is substantially similar to stand-alone legislation on
possible Israeli participation in the visa waiver program that was introduced earlier in 2013 in
both the House (H.R. 300) and the Senate (S. 266).
208 Jonathan Broder, “AIPAC-Backed Israel Bill Stalls Over Visa Waiver Provision,” cq.com, April 29, 2013. See also
Yousef Munayyer, “A Lopsided U.S. Visa-Waiver,” New York Times, October 28, 2013.
209 Broder, op. cit.
210 Jonathan Broder, “Fears of Israeli Spying Underlie Reluctance on Visa Waiver Program,” Roll Call, April 24, 2014;
Jeff Stein, “Israel Won’t Stop Spying on the U.S.,” Newsweek, May 6, 2014; Calev Ben-David, “Israel Visa Flap With
U.S. Stirs Up Spy Charges, Profiling Claim,” Bloomberg, May 8, 2014.
211 Stein, op. cit.; Ben-David, op. cit.
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Appendix A. U.S.-Based Interest Groups Relating
to Israel
Selected groups actively interested in Israel and the peace process are noted below with links to
their websites for information on their policy positions.
American Israel Public Affairs Committee: http://www.aipac.org
American-Israeli Cooperative Enterprise/Jewish Virtual Library:
http://www.jewishvirtuallibrary.org
American Jewish Committee: http://www.ajc.org
American Jewish Congress: http://www.ajcongress.org
Americans for Peace Now: http://www.peacenow.org
Anti-Defamation League: http://www.adl.org
Conference of Presidents of Major Jewish Organizations: http://www.conferenceofpresidents.org
Foundation for Middle East Peace: http://www.fmep.org
Hadassah (The Women’s Zionist Organization of America, Inc.): http://www.hadassah.org
Israel Bonds: http://www.israelbonds.com
Israel Institute: http://www.israelinstitute.org
The Israel Project: http://www.theisraelproject.org
Israel Policy Forum: http://www.israelpolicyforum.org
J Street: http://jstreet.org
Jewish Federations of North America: http://www.jewishfederations.org
Jewish National Fund: http://www.jnf.org
Jewish Policy Center: http://www.jewishpolicycenter.org
New Israel Fund: http://www.nif.org
S. Daniel Abraham Center for Middle East Peace: http://www.centerpeace.org
Zionist Organization of America: http://www.zoa.org
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Appendix B. Electoral Lists Represented in Knesset
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Author Contact Information
Jim Zanotti
Specialist in Middle Eastern Affairs
jzanotti@crs.loc.gov, 7-1441
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