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The existing Sorek Desalination Plant. Photo: Ann Hermes/The Christian Science Monitor via Getty Images

Israel will review the participation of a Hong Kong-based company in a government tender for the construction of a $1.5 billion desalination plant, following pressure from the Trump administration.

Why it matters: The U.S. has linked the issue to potential Chinese influence in Israel. With Pompeo arriving in Jerusalem tomorrow in the midst of an intense campaign against the Chinese government, Israeli officials are wary of getting in the middle of U.S.-China tensions.

How we got here: As I reported last week, the U.S. asked Israel for clarifications regarding the participation of Hutchison Israel, which is controlled by the Hong Kong-based conglomerate CK Hutchison Holdings, in a bid for the “Sorek B” desalination plant.

  • The company is among the entities that have reached the final stages of the process, and Israeli officials say it has a good chance of winning the tender.
  • The new desalination plant is expected to be the largest such facility in the world, producing 200 million cubic meters of water annually — a quarter of Israel's total water consumption.
  • The company that wins the bid to build the plant would operate it for 25 years.

Last week, U.S. ambassador to Israel David Friedman asked Prime Minister Benjamin Netanyahu to weigh in on the issue, sources tell me.

  • Netanyahu then asked the national security council and finance ministry to convene a new government committee which monitors foreign investments in Israel.
  • Israeli officials tell me that while a review will be conducted, they don't expect it to result in Hutchison being banned from the tender.

What’s next: The Israeli ministry of finance is expected to announce the winner of the tender on May 24th.

U.S. officials say Pompeo is likely to raise China during his talks in Jerusalem tomorrow. State Department spokesperson Morgan Ortagus told me:

“As the Secretary has repeatedly stated, the United States strives for trade and investment on fair and reciprocal terms, with reliable partners, for long-term mutual benefit. China’s business dealings, by contrast, are often opaque, transactional, and geared to benefit the Chinese Communist Party.  We speak often to our friends in Israel about these risks, and stand ready to help."

The Israeli ministry of finance and Netanyahu's office declined to comment for this article.

Go deeper: Israeli security cabinet held secret meeting on unusual Iranian cyberattack

Go deeper

Aug 18, 2020 - World

Netanyahu denies Israel-UAE deal included secret clause on F-35s

UAE Crown Prince Mohammed bin Zayed with Trump in 2017. Photo: Chris Kleponis-Pool/Getty Images

Israeli Prime Minister Benjamin Netanyahu has denied reports that he gave the Trump administration a green light to sell F-35 fighter jets to the UAE as part of a normalization deal announced last Thursday.

Why it matters: U.S. law requires the administration to consult with Israel before selling arms to any Arab country to ensure Israel can maintain its qualitative military edge. It must also report to Congress on the matter.

Aug 19, 2020 - World

Scoop: Israel raises concerns with U.S. about new Saudi nuclear facility

Saudi Crown Prince Mohammed bin Salman (L) with Chinese President Xi Jinping. Photo: Pool/Getty Images

Israel has privately expressed concerns to the Trump administration about a new nuclear facility reportedly built in the Saudi desert with Chinese help, Israeli officials said.

Why it matters: This secret development raises concerns that the Saudis are building infrastructure for a future military nuclear program.

Updated Aug 19, 2020 - World

U.S. expected to invoke Iran deal "snapback" on Thursday

Pompeo at the UN. Photo: David Dee Delgado/Getty Images

President Trump confirmed on Wednesday that he had asked Secretary of State Mike Pompeo to notify the UN Security Council that the U.S. intends to initiate "snapback" sanctions on Iran. The formal request is expected on Thursday, Israeli officials told Axios.

The backdrop: This move could create a diplomatic and legal crisis unlike any seen before at the Security Council. It comes days after the U.S. failed to mobilize support at the council to extend an international arms embargo on Iran.