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Defense Minister Gantz (L), Foreign MInister Lapid (C) and Prime Minister Bennett. Photo: Ilia Yefimovich/picture alliance via Getty

The Israeli government is forming a special team to manage the fallout from reports that software developed by Israeli firm NSO was used by governments around the world to spy on journalists, human rights activists and possibly world leaders, two Israeli officials tell me.

Why it matters: So far, this is primarily a media crisis for Israel. But senior Israeli officials are concerned it could morph into a diplomatic crisis.

Driving the news: An international consortium of investigative journalists reported on Sunday that NSO's "Pegasus" software — designed to track terrorists and criminals — had become a valuable tool for governments to spy on journalists and critics. Among the countries listed in the reports as NSO clients are Hungary, India and Saudi Arabia.

  • The Israeli officials told Axios that NSO's export license included terms about the misuse of spyware, the reports would likely influence future deals involving NSO and other Israeli companies.
  • “It is a very substantial crisis," a senior Israeli official told me. "We are trying to fully understand its ramifications. We will have to check whether the reports about NSO warrant a change in our policy regarding the export of offensive cyber technology to other countries."

What they're saying: A hint of the possible diplomatic fallout was provided Wednesday by the U.K.’s cyber czar, Lindy Cameron.

  • “We now see states that cannot build high end capability being able to buy it," Cameron said at a cyber conference in Tel Aviv, adding that it was "vital that all cyber actors use capabilities in a way that is legal, responsible and proportionate to ensure cyberspace remains a safe and prosperous place for everyone. And we will work with allies to achieve this."

Israeli Minister of Defense Benny Gantz spoke at the same conference and said Israel was "studying" reports about the alleged use of the Pegasus software in violation of the terms of its export license. 

  • “We approve the export of cyber products only to governments and only for lawful use in order to prevent crime and terrorism. Countries who purchase those systems must adhere to the conditions of use," Gantz said.
  • NSO continues to deny the reports and claim to have taken all possible steps to ensure its software wasn't used for anything other than fighting crime and terrorism.  

Details: The interagency team includes representatives from the Ministry of Defense, which is in charge of defense export licenses, the Foreign Ministry, the Ministry of Justice, the Mossad spy agency, military intelligence and other agencies.

What's next: The team plans to start a discussion with NSO about the reports while also performing damage control over the diplomatic, security and legal ramifications, the Israeli officials said.

Go deeper

Sep 22, 2021 - World

Scoop: Russia seeks trilateral talks with U.S. and Israel on Syria

Secretaries Blinken (left) and Lavrov. Photo: Russian Foreign Ministry\TASS via Getty

Russia has asked Israel to encourage the U.S. to agree to hold high-level trilateral talks on Syria, two senior Israeli officials tell me.

Why it matters: Israel's main focus in Syria is getting Iran out, and that would likely only be possible through U.S.-Russian cooperation. 

Senate Republicans sink short-term government funding, debt limit bill

Senate Minority Leader Mitch McConnell. Photo: Drew Angerer/Getty Images

Senate Republicans on Monday voted down the House-passed bill to fund the government through Dec. 3 and raise the debt limit.

Why it matters: Congress is just 72 hours away from a potential shutdown, so now comes Democrats' Plan B. Democratic leadership is expected strip the short-term funding bill of language about raising the debt limit — the part that Republicans' reject — in order to pass a bill before federal agencies close down on Friday.

Mike Allen, author of AM
3 hours ago - Energy & Environment

Laurene Powell Jobs' $3.5 billion climate campaign

Laurene Powell Jobs, president of Emerson Collective, is investing $3.5 billion in her new climate-action group, the Waverley Street Foundation — all to be spent in 10 years, as a way to show urgency on the issue.

  • Then the group will sunset.

The big picture: The foundation "will focus on initiatives and ideas that will aid underserved communities who are most impacted by climate change," an official tells Axios.