Axios from Tel Aviv

Israeli Prime Minister Naftali Bennett urged President Biden during a phone call on Sunday not to return to the 2015 nuclear deal with Iran, saying "nothing will happen if you don't sign it," an Israeli official told me.

Why it matters: A possible U.S. return to the nuclear deal is the biggest point of tension between the Israeli government and the Biden administration.

• The initial agreement in 2015 led to a deep rift between the Obama administration and the Netanyahu government.

The big picture: Talks that resumed yesterday in Vienna over a return to the deal — one of Biden's key campaign promises — have reached a critical point, with U.S. officials saying Iran must make "tough" decisions now or face an escalating crisis.

• Israel, meanwhile, believes that a nuclear deal with Iran, according to terms that are being discussed in Vienna, will give more to the Iranians than Tehran will give to the world powers.

Behind the scenes: During Sunday's call, Bennett told Biden the U.S. doesn’t have to go back to the Iran deal, Israeli and U.S. officials told me.

• Bennett said that without a deal, there would not necessarily be an escalation in Iran's nuclear program.
• He also said the financial benefits Tehran will gain from a renewed deal will far outweigh any non-proliferation benefits. Bennett said that with a deal, Iran will gain billions of dollars that Israel believes will fuel malign activities in the region, Israeli officials said.

Biden told Bennett it is still unclear if there is going to be a deal, according to a U.S. official briefed on the call. The president said the U.S. won’t compromise on its basic demands regarding the limitations on Iran’s nuclear program.

• A White House National Security Council spokesperson said Biden discussed a range of issues with Bennett including the threat posed by Iran and its proxies.
• “The United States and Israel share a common interest: seeing to it that Iran never acquires a nuclear weapon," the spokesperson said.

Between the lines: Israeli and U.S. officials said the 30-minute call between Biden and Bennett on Sunday was very friendly and warm.

• They said it struck a different tone from the tense conversations between former President Obama and former Prime Minister Netanyahu more than seven years ago. Nevertheless, the officials said, the disagreements were clear.
• While Bennett opposes a U.S. return to the nuclear deal, he is also careful not to repeat Netanyahu’s mistakes and will maintain a good relationship with the Biden administration regardless of their differences.
• Some Israeli defense officials have recently signaled that Israel will be better off if the Iran nuclear talks lead to a deal rather than collapsing without one.

What to watch: Bennett’s national security adviser Eyal Hulata arrived in Washington yesterday for meetings with his U.S. counterpart Jake Sullivan and other Biden administration officials.

Israeli government experts believe that a U.S. return to the 2015 nuclear deal with Iran will set the amount of time Tehran needs to produce the amount of highly enriched uranium needed for a nuclear bomb to four to six months, a senior Israeli official told me.

Why it matters: This assessment is shorter than the six to nine month breakout time the Biden administration experts calculated, per two Israeli officials familiar with strategic consultations between the U.S. and Israel.

The big picture: The standard set by the 2015 nuclear deal was one year breakout time.

• But Iran’s nuclear advances since the Trump administration withdrew from the deal made this standard irrelevant.
• U.S. and Israeli officials say that Iran’s current breakout time — without a deal in place — is only about five weeks.

Behind the scenes: The six to nine month breakout time assessment by the Biden administration was relayed to Israeli officials during video strategic consultations two weeks ago, Israeli officials told me.

• During the consultations with the U.S., Israeli officials learned that a renewed nuclear deal will not include destroying Iranian advanced centrifuges, which they were not allowed to use according to the 2015 agreement.
• A senior Israeli official said a renewed deal will only include the storage of these advanced centrifuges in Iran under an International Atomic Energy Agency seal. Israeli officials fear this will allow Iran to resume using those centrifuges on a very short order.

A White House National Security Council spokesperson declined to detail the strategic consultations between the U.S. and Israel, which he said were meant to exchange views and trade ideas confidentially.

• “We will not negotiate in the press or comment on specific claims about the negotiations," a State Department spokesperson said.

The Israeli government recently notified the State Department it wouldn’t oppose a U.S. return to the UN Educational, Scientific and Cultural Organization, Israeli and U.S. officials told me.

Why it matters: The new Israeli position paves the way for Congress to vote on the allocation of the more than $500 million needed to pay the U.S. debt to UNSECO and return as a full member.

Flashback: After Palestine became a full member of UNESCO in 2011, the Obama administration stopped providing funding to the organization because it was barred to do so by U.S. law.

• In October 2017, the Trump administration announced it was leaving UNESCO over what it described as anti-Israel bias. Israel announced that it would leave the organization not long after.

Behind the scenes: Israeli officials said the Biden administration asked Israel several times in recent months not to oppose a U.S. return to UNESCO.

• The Biden administration stressed to Israeli officials it wants to return to the organization to counter the growing influence of the Chinese government on the UN agency's agenda, Israeli officials said.

The big picture: The Biden administration needs Israel to not oppose the move in order to convince members of Congress to vote in favor of a bill that will allow Biden to waive the law that stopped U.S. funding.

• UNESCO director-general Audrey Azoulay worked behind the scenes for months to lobby members of Congress and reassure Israel she won’t allow anti-Israeli bias.
• Israeli officials told me they have recently briefed several lawmakers about the new Israeli position.

State of play: Legislation introduced in the Senate includes a snap-back clause that states that if the Palestinians obtain a member state status in a UN agency, the U.S. will stop its funding again.

• The bill will sunset on Sept. 30, 2025, when the current director general of UNESCO leaves office but could be extended further.

What they're saying: "It is very important to the Biden administration and it is not the same UNESCO. We received assurances that Israel will not be treated as it used to be treated," a senior Israeli official said.

• A State Department spokesperson said it has nothing to announce about UNESCO at this time. 

A series of stories in an Israeli newspaper about alleged systematic illegal cyber spying by the police against innocent citizens has rattled the Israeli political system.

Why it matters: The police denied almost all of the press reports, but the public uproar could lead to the establishment of an independent national committee of inquiry headed by a Supreme Court judge.

Driving the news: A series of articles recently published by the daily financial newspaper Calcalist claimed the Israeli police intelligence department was using NSO’s Pegasus cyber spying software to hack citizens' cellphones without a warrant.

• The police initially denied the allegations that it was acting illegally, but then revised its comment when further investigation found police analysts breached the terms of a warrant in a case involving a state witness in the ongoing corruption trial of former Prime Minister Benjamin Netanyahu.
• When the police revised its comment, it tarnished the very little credibility it had and convinced many people the stories are accurate.

Details: According to the reports, there was a systematic procedure of hacking phones to gather intelligence on suspects. Sometimes it was pure “fishing” against people who were not even suspects.

• Only after intelligence on alleged criminal activity came up would the police ask for a warrant, Calcalist reported.

The newspaper claimed the police used Pegasus not only against crime organizations or terrorists but also against mayors, political activists, Netanyahu's son and allies, and director generals of major government ministries.

• On Monday, the newspaper published a list of more than two dozen people who were allegedly hacked by the police.
• Calcalist published the stories without attributing them to any source and without giving any proof or documents to back them up. Other Israeli media outlets haven't been able to confirm the reports.
• The police confirmed it was using Pegasus and other spying software but denied it was done illegally or without a warrant.

State of play: Netanyahu’s trial was supposed to resume this week but the judges decided to postpone it by several days until the attorney general determines whether there was any intentional illegal cyber spying against the state witness or other witnesses.

• Netanyahu and his lawyers jumped on the case to support their claim that the investigation, indictment and trial against the former prime minister were part of a “witch hunt” by the “deep state."
• The press reports rattled the Israeli political system and many politicians from left and right said they didn’t believe the police denials and demanded an independent investigation.

Bennett on Tuesday was presented with an initial report by the police and the attorney general, which found only three of the names published on Monday were targets of cyber spying by the police and it was done with a warrant, officials in the Prime Minister’s Office said.

• In a statement, Bennett said he decided to ask technical experts from the Mossad and Shin Bet intelligence agencies to do another independent examination of the logs of the police cyber spying system.

What’s next: Bennett's aides told me he wants to get the results of the intelligence agencies' examination before deciding whether to form an independent inquiry headed by a Supreme Court judge.

• But senior Cabinet ministers told me that regardless of the conclusions of the examination, a committee of inquiry may need to be in order to avoid claims of political interference and to reestablish public confidence in the law enforcement agencies.

The White House last Friday held an interagency meeting to discuss the possibility of redesignating the Houthis as a foreign terrorist organization, two sources briefed on the issue told me.

The big picture: Less than a month after he assumed office, Biden rolled back the Trump administration’s designation of the Houthi rebels, arguing it hampered humanitarian assistance to the Yemeni people.

• In recent weeks, the Houthis carried out several missile and drone attacks targeting the UAE, a member of the Saudi-led coalition that has waged an aerial campaign against the Iran-backed rebels in Yemen since 2015.
• Following the first attack in which three people were killed, the Emiratis asked the Biden administration to redesignate the Houthis as a terror group.

Behind the scenes: The White House National Security Council is more open to redesignate the Houthis, while the State Department supports targeting specific Houthi leaders with sanctions, but not the Houthis as an organization, according to the sources.

What they're saying: State Department spokesperson Ned Price said last Thursday that the Biden administration won’t relent in using sanctions and designations against Houthi leaders or entities who are involved in military attacks against civilians or commit human rights abuses.

• At the same time, Price said, the U.S. remains committed to addressing the humanitarian emergency in Yemen.
• An NSC spokesperson said Biden has already said the redesignation of the Houthis was under consideration.