The Biden administration has been privately pressuring the Israeli government to show restraint ahead of a key decision on settlement-building in the West Bank, Israeli and U.S. officials tell me.

Why it matters: Both sides want to keep this from becoming a point of tension between President Biden, who considers the settlements a threat to the two-state solution, and Prime Minister Naftali Bennett, who leads a pro-settler party and is under political pressure on the issue.

• Most of the international community views the West Bank settlements as illegal, and the Palestinians argue that Israel is claiming more and more land that should be part of their future state.

How it happened: Biden told Bennett in their Aug. 27 meeting at the White House that he expected Israel to show restraint on the settlements issue, and Bennett replied that Israel would build only according to needs arising from “natural growth."

• But when he returned from Washington, Bennett told settler leaders that when Biden pressed him on settlements, he told him "no," according to a report last week from the Times of Israel.
• Soon after that report, the U.S. chargé d’affaires in Jerusalem, Michael Ratney, reiterated Biden's call for restraint to senior officials in the Prime Minister's Office. He also raised particular concerns about possible construction in the sensitive E1 area near Jerusalem, which could prevent territorial contiguity between north and south in the West Bank.

The backstory: Bennett had wanted to get one big step on settlements out of the way before traveling to Washington: the approval of 2,000 new housing units in the Israeli settlements and about 1,000 new housing units in Palestinian villages.

• Instead, a strike by the workers union of one of the departments in the Ministry of Defense postponed the move.
• Between the lines: It would have been much easier to approve the new units before Biden explicitly pressed Bennett on this issue. In the six weeks since the visit, the meeting to approve the housing units hasn't been rescheduled.

What they're saying: "There is great sensitivity right now with the Americans about settlements. This is the reason the approval of new planning and building in the settlements is held up for now," a senior Israeli official tells me.

• A senior U.S. official told me the Biden administration has been engaged with the Israeli government regarding settlements on a weekly basis since the meeting between Bennett and the president.
• A U.S. Embassy spokesperson declined to comment on private conversations but reiterated a call for "all parties to refrain from unilateral steps that exacerbate tensions and undercut efforts to advance a negotiated two-state solution. That includes settlement activity."
• The Prime Minister's Office also said it wouldn't comment on private conversations with U.S. officials.

The issue also requires a balancing act from Biden, who is committed to a two-state solution but will also want to avoid a public fight on the issue like the one between Barack Obama and Benjamin Netanyahu — particularly as Bennett's government remains unstable and Netanyahu is waiting in the wings as opposition leader.

What to watch: It's unclear when the committee that approves settlement building will be convened or whether Bennett will decrease the number of housing units up for approval.

Israeli Foreign Minister Yair Lapid will travel to Washington next week for talks with senior Biden administration officials on Iran, Lapid’s office said.

• Lapid is expected to meet with Secretary of State Tony Blinken, national security adviser Jake Sullivan and Vice President Kamala Harris between Oct. 12-14.

Why it matters: Israel is pressing the Biden administration to develop a “Plan B” in case nuclear talks with Iran fail.

• State of play: Talks aimed at a mutual return to the 2015 nuclear deal have been frozen since hardliner Ebrahim Raisi was elected as Iran's president in June, and optimism about a potential deal has been waning in Washington and in European capitals.
• Israeli officials say Lapid wants to pass on Israel’s messages about Iran at the highest level before the Vienna talks resume.

Driving the news: U.S. and Israeli officials led by Sullivan and his Israeli counterpart, Eyal Hulata, met on Tuesday at the White House for strategic talks on Iran's nuclear program, regional activities and deployment of attack drones.

• Meanwhile, Iranian Foreign Minister Hossein Amir-Abdollahian discussed the nuclear talks on Wednesday in Moscow with Russian Foreign Minister Sergey Lavrov.
• Shortly before the meeting, Lavrov had spoken to Blinken about the effort to resume talks with Iran, the Russian Foreign Ministry said.
• After the meeting, Amir-Abdollahian said talks would resume "soon."

What they're saying: After the U.S.-Israel meeting, the White House emphasized that the administration believes diplomacy is the best way to prevent Iran from obtaining a nuclear weapon, but "if diplomacy fails, the United States is prepared to turn to other options."

Behind the scenes: Israeli officials have been making the case to their U.S. counterparts that the Biden administration should prepare a new package of sanctions on Iran while also making clear that the U.S. has a credible military threat, an Israeli official told me.

• “We told the Americans that without those two things, the Iranians won’t have any incentive to go back to the 2015 nuclear deal," the official said.

What’s next: The Israeli government expects the nuclear talks in Vienna to resume in a few weeks.

The bombshell “Pandora papers” disclosures about King Abdullah II's multimillion-dollar real-estate holdings don't currently look like a major blow to the king's domestic standing, journalist Daoud Kuttab writes for Axios from Amman.

Driving the news: The International Consortium of Investigative Journalists (ICIJ) reported that King Abdullah had purchased several houses worth more than $106 million in the U.S. and U.K. during his reign, using offshore companies.

• The palace admitted that the country’s fourth monarch does in fact own real estate in the U.S. and Europe, and it claimed the purchases had been kept outside the public eye for security reasons, to protect the royal family.
• The statement seemed to help to defuse the situation domestically.

Between the lines: The story has hardly appeared in local media in Jordan, with most publishers practicing self-censorship and one online outlet that did publish the reports, Ammannet.net, being asked to take them down three hours later.

• The director of the government's media commission, Tareq Abu Ragheb, claimed the media had not been pressured.
• Instead, he told Axios, outlets had been careful “not to fall in the trap of publishing information that is considered a breach of the personal information of His Majesty the King and his need for security and thus allow themselves to be a gun in the hands of those who wish to harm the King.”
• Some Jordanians say the disclosures are hardly a surprise. Others rationalized to Axios that the king had used his private money, not funds from international donors or the country's coffers.

“It is a serious crisis, but people are afraid of instability and therefore it will not make a big difference," says Lamis Andoni, a political analyst and former lecturer at UC Berkeley.

• “It will increase distrust in the government and the palace, and the only way to deal with this problem is to have accountability and transparency," Andoni said, suggesting that the palace start by publishing details of its budget.

Worth noting: The Pandora Papers reports were published the same day that King Abdullah took the dramatic step of speaking to Syrian President Bashar al-Assad for the first time in a decade.

• The call is part of a realization by the Jordanian government that it shouldn't wait for the U.S. or other parties to bring about a solution in Syria, and it should instead bring relations with its neighbor back to normal, Abdel Majid Dandies of the left-wing Popular Unity party told Axios.

An escalating crisis between neighbors Iran and Azerbaijan was sparked by a trade dispute, but it's also been fueled by Azerbaijan's close ties to Israel.

The big picture: Israel and Azerbaijan have had a strategic alliance for many years, with Israel buying Azerbaijan's oil and Azerbaijan buying Israeli weapons, mainly attack drones. Iran now fears a growing Israeli presence just across its border.

Driving the news: The tensions started last week when Azerbaijan’s military stopped Iranian trucks that were transferring Iranian goods to Armenia, Azerbaijan's longtime enemy.

• The trucks were using a highway through the Zangezur region in Armenia, which is Iran’s main land route to Europe and thus an important export corridor.
• After the recent war between Azerbaijan and Armenia, a small part of that highway fell under Azerbaijan’s control. Now the Azerbaijanis want to force the Iranians to pay taxes to use it.
• As tensions rose, Iran's foreign minister warned Azerbaijan not to take any steps on the border that affect Iran, and he took two urgent trips to Armenia and Russia.

Iran also began a military drill near its borders with Azerbaijan and Armenia.

• Azerbaijan then held a drill of its own alongside Turkish forces, and President Ilham Aliyev went to the border and drove around in a military jeep while wearing an army uniform.
• Matters continued to escalate as Iran closed its airspace to some (mainly military) flights from Azerbaijan, and Azerbaijan shut down an Iranian institute in Baku under the pretext of COVID-19 restrictions.

The Iranians also claimed Azerbaijan was allowing Israeli forces to be stationed on its side of the border to prepare attacks against Iran — warning in public and private that they would not tolerate it.

• Aliyev and other Azerbaijani officials denied that, as did the Israeli ambassadors in Moscow and Baku, who mocked the Iranian claims.
• Yes, but: While there's no evidence of Israeli troops in Azerbaijan, there have been several media reports in recent years claiming that Israel uses the country as a base for collecting intelligence on Iran.

The bottom line: The current crisis underscores the growing concerns in Tehran of a tightening regional siege around the country, also amid international sanctions and the Taliban takeover of Afghanistan.

The commander of the U.S. Navy's 5th Fleet, Vice Adm. Brad Cooper, arrived in Israel on Wednesday for a visit aimed at boosting cooperation with the Israeli navy in the Red Sea and other parts in the region, Israeli officials say.

Why it matters: This is the first visit to Israel by a commander of the 5th Fleet, and it comes after Israel became part of the U.S. Central Command’s area of responsibility, transferring from the U.S. European Command.

Cooper met Lapid, Defense Minister Benny Gantz and the leadership of the Israel Defense Forces.

• Israeli officials see the visit as a signal to Iran amid the heightened tensions resulting from recent attacks on Iranian ships in the Red Sea and Israeli ships in the Gulf.
• It comes after Lapid visited the 5th Fleet headquarters in Manama, Bahrain, last week.
• Cooper, Bahrain’s foreign minister, and the chargé d’affaires at the U.S. Embassy were on hand for Lapid's visit. They did a photo-op and offered press statements with a U.S. Navy ship in the background.

What’s next: Israeli officials hope the combination between the Abraham Accords and Israel's shift to CENTCOM could lead to unprecedented military cooperation in the Red Sea and the Gulf.