Axios from Tel Aviv

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November 10, 2021

Welcome back to Axios from Tel Aviv.

  • Each week we bring you my best scoops and the latest in Israeli politics.
  • Today’s edition (1,898 words, 7 minutes)

1 big thing: Biden's Jerusalem dilemma

 US consulate in Jerusalem
The U.S. Consulate in Jerusalem, Oct. 27. Photo: Ahmad Gharabli/AFP via Getty Images

The Biden administration finds itself stuck between its pledge to the Palestinians to reopen the U.S. Consulate in Jerusalem and strong Israeli government opposition to this move.

Why it matters: Any decision by the Biden administration on this issue is likely to anger either Israel or the Palestinians and lead to tensions.

  • It's also almost certain to create political blowback for Biden — either from Republicans who oppose the move or from Democrats who want to see it happen.

Catch up quick: The consulate was for 25 years the U.S. diplomatic mission to the Palestinian Authority, but it was shut down by former President Trump in 2019. During the election campaign, Biden promised to reopen it if he is elected.

  • When Secretary of State Tony Blinken visited Israel last May, he gave a private and public commitment to Palestinian President Mahmoud Abbas that the Biden administration is moving ahead with reopening the consulate.
  • The administration agreed to a request from the Israeli government that the issue not be pursued before the government's budget was passed in order to keep from destabilizing the fragile coalition. The Palestinians accepted this situation and agreed to wait.
  • During Israeli Foreign Minister Yair Lapid’s visit to Washington last month, he told Blinken that Israel is opposed to reopening the consulate regardless of the budget. They agreed to form a team to discuss the issue.

Driving the news: The issue of the consulate came up during the visit of three Senate and House delegations to Jerusalem and Ramallah this week.

  • Palestinian Prime Minister Mohammad Shtayyeh told a delegation led by Sen. Ben Cardin (D-Md.) that the Palestinians demand the U.S. reopen the consulate as it had promised.
  • Abbas said in a speech on Tuesday that the Biden administration committed to him more than once it will reopen the consulate and he expects that to happen.
  • Israeli Prime Minister Naftali Bennett told a Democratic congressional delegation on Tuesday that he understands the consulate was a Biden campaign promise and he's aware of the domestic political sensitivities in the Democratic party, but he wouldn’t allow the reopening of the diplomatic mission that serves the Palestinians in Israel’s capital, an Israeli official said.
  • “I am not going to make a campaign or try to score political points over this issue, but the government position is that reopening the consulate is unacceptable," Bennett told the delegation.

What they're saying: Former U.S. peace negotiator Aaron David Miller wrote in an op-ed this week that the last thing Biden wants or needs now is a fight with Israelis, Republicans and maybe even a few Democrats over Jerusalem. Biden, he wrote, might decide to renege on his promise.

  • Former U.S. Middle East envoy Martin Indyk tweeted that the Israeli government should make a gesture to Biden and allow the reopening of the consulate in exchange for a statement reiterating recognition of Jerusalem as Israel’s capital.

What’s next: The Biden administration has not raised the issue again with the Israelis since the budget was passed. But it is likely to happen soon.

2. Iran works the room ahead of nuclear talks

A November 10, 2019 photo of an Iranian flag in Iran's Bushehr nuclear power plant
An Iranian flag in front of Iran's Bushehr nuclear power plant, Nov. 10, 2019. Photo: Atta Kenare/AFP via Getty Images

Less than three weeks before indirect negotiations are set to resume between the U.S. and Iran about a possible return to the 2015 nuclear deal, Iran is holding talks with other signatories to the agreement to try to set the stage for the new round of negotiations.

Why it matters: The talks on Nov. 29 in Vienna will be the seventh round of negotiations since Biden assumed office and the first round since Ebrahim Raisi was inaugurated as president of Iran.

  • It comes after more than three months of suspension and amid skepticism in Washington and European capitals about Iran’s willingness to return to full compliance with the nuclear deal.

Driving the news: Iran’s chief nuclear negotiator Ali Bagheri is traveling to Paris, Berlin and London this week for preparatory talks ahead of the Vienna negotiations.

  • Iran’s Foreign Minister Hossein Amir-Abdollahian has been working the phones in recent days talking to his Russian, Chinese, British, German and French counterparts.
  • In a call with his French counterpart, the Iranian foreign minister criticized the Biden administration’s decision to impose sanctions on Iran's Islamic Revolutionary Guard Corps drone units and called the move unconstructive. But he said Iran is going to come to the talks seeking “a good deal."
  • Abdollahian told his Chinese counterpart Iran hopes the U.S. and its European allies will come to Vienna with a realistic approach “so that an agreement could be reached quickly."
  • When he spoke to his Russian counterpart, the Iranian foreign minister said Iran is "skeptical of the U.S. intentions" but added if the Biden administration fully implements its commitments and doesn’t make more demands, Iran will return to full compliance with the deal.

Details: The Iranian Foreign Ministry laid out several conditions ahead of the next round of talks...

  • The U.S. must accept responsibility for withdrawing from the nuclear deal during the Trump administration.
  • The U.S. must lift all sanctions imposed by the Trump administration.
  • The U.S. must give a guarantee that the next administration won't withdraw from the agreement in the future.

What to watch: The U.K. has been actively pressing the U.S., France and Germany to move ahead with a censure resolution by the International Atomic Energy Agency against Iran over the limitations it puts on UN inspectors.

  • But European diplomats briefed on the issue said after Iran’s announcement of resuming the nuclear negotiations, it is unlikely that such a move will take place.

Read the entire story.

3. U.S. pushes for progress on Israel-Lebanon border dispute

Border-marking buoys in the Mediterranean waters off the coast of Rosh Hanikra, an area at the between Israel and Lebanon (Ras al-Naqura) on May 4, 2021.
Border-marking buoys in the Mediterranean waters off the coast of Rosh Hanikra, an area between Israel and Lebanon, May 4. Photo: Jack Guez/AFP via Getty Images

The U.S. mediator in the maritime border dispute between Israel and Lebanon told the parties if they can’t get an agreement before the March 2022 parliamentary election in Lebanon, he will stop dealing with the issue, Israeli officials said.

Why it matters: The direct message from U.S. energy envoy Amos Hochstein seems to be aimed at making it clear to the parties they will have to make compromises.

  • Hochstein is one of Biden’s closest confidants, which signals this issue is a relatively high priority for the Biden administration.

The backstory: There have been major natural gas discoveries off the coasts of both countries during the last decade, and the border dispute has halted gas exploration in an area that has attracted the interest of U.S. energy companies.

  • The talks are an attempt to resolve the dispute so gas exploration can begin. The revenues at stake could reach the tens of billions of dollars, which could be critical for Lebanon's imperiled economy.
  • U.S.-brokered talks began in October 2020 and were the first direct political negotiations between Israeli and Lebanese officials in 30 years, but they stalled after several rounds.

Driving the news: Hochstein visited Beirut for talks on the issue two weeks ago. He met with Lebanese President Michel Aoun and Prime Minister Najib Mikati.

  • On Sunday, he arrived in Israel and met Bennett, Minister of Energy Karine Elharrar and other senior officials.
  • Hochstein told his Israeli interlocutors he isn’t going to resume direct talks between Israel and Lebanon at the UN base on the border between the countries, Israeli officials said. Instead, he is going to make separate visits to Beirut and Jerusalem in order to hear the parties and in the end present a U.S. bridging proposal.
  • According to Israeli officials, Hochstein stressed that he thinks the period until the Lebanese parliamentary elections in March 2022 is a window of opportunity to get a deal, especially when Lebanon needs to save its economy and attract any investment it can.

Go deeper.

4. Egypt-U.S. talks take on friction over human rights

 Sameh Shoukry, Foreign Minister of Egypt on January 13, 2016 in Berlin, Germany.
Egyptian Foreign Minister Sameh Shoukry on Jan. 13, 2016 in Berlin, Germany. Photo: Thomas Trutschel/Photothek via Getty Images

Egypt and the U.S. are working to decrease friction between the countries around human rights issues, Egyptian Foreign Minister Sameh Shoukry told a group of representatives from several American Jewish organizations in a closed meeting in Washington on Tuesday, people who attended the meeting told me.

Why it matters: U.S. criticism of Egypt's human rights record cooled relations between the two countries early in the Biden administration.

  • Egypt played a key role in establishing a ceasefire in the Gaza strip in May, but human rights remains a sticking point in the strategic partnership between Egypt and the U.S.
  • Criticism of the human rights situation led the Biden administration to freeze $130 million in military aid to Egypt in September.

Driving the news: The U.S. and Egypt held this week the first strategic dialogue since the Biden administration assumed office. Human rights were a main issue in the discussions, State Department spokesperson Ned Price said.

  • Shoukry told the Jewish leaders group the dialogue also discussed the suspension of U.S. military aid. He called it “an internal American decision” but stressed U.S. military aid is beneficial to the U.S. both for strategic reasons and because it creates jobs in America, according to people in the meeting.
  • In an event at the Wilson Center in Washington on Tuesday, Shoukry said he told Blinken during the dialogue the human rights situation in Egypt needs to evolve. But he stressed discussion about this between the U.S. and Egypt should be done in private and not through “public shaming that only creates negative attitudes in Egypt."

What they're saying: In a joint statement published at the end of the dialogue, the parties stressed the two sides held a “constructive dialogue” on civil and political rights, freedom of expression, fighting racism, women’s empowerment, and economic, social, and cultural rights.

5. Bennett barometer: The day after the budget

Photo illustration of a barometer with Prime Minister Naftali Bennett on it
Photo illustration: Sarah Grillo/Axios. Photos: Kobi Wolf/Bloomberg via Getty Images

Passing the budget last week was Bennett’s biggest political achievement since assuming office last June.

Why it matters: The budget's approval dramatically strengthens Bennett, stabilizes his coalition, and makes it almost impossible for the opposition to take down the government before the end of 2022.

State of play: Bennett’s coalition has a majority of only one member of Knesset over the opposition. Any member of the coalition could have prevented the budget from passing and therefore had a lot of leverage.

  • If the budget hadn’t passed, it would have sent Israel to a new election.
  • Its approval decreased the ability of individual members of Knesset to destabilize the coalition.
  • The only way for the opposition to bring down the government before the end of 2022 is if Former Prime Minister Netanyahu manages to get 61 votes to swear in a new government. This is almost an impossible scenario because he has only 53 votes.

What’s next: During the effort to pass the budget, the Israeli government avoided tackling many politically charged issues and the ministers were restrained in their actions. This is now likely to change.

  • Bennett’s challenge will be to navigate the government and prevent it from breaking up from the inside over ideological differences between his coalition parties.
  • Bennett’s asset will be the fact that Netanyahu is still the head of the opposition and is perceived by the coalition parties as a threat that deters them from destabilizing it.
  • The passing of the budget also brings back to the table many foreign policy issues, including some of the disagreements with the Biden administration, among them the possible return of the U.S. to the Iran nuclear deal.

Flashback: The last time the Israeli government passed a budget was three and a half years ago.

  • Netanyahu didn’t pass a budget in order to bring down the government and avoid implementing the agreement with his coalition partner Benny Gantz, who was meant to rotate with Netanyahu as prime minister.
  • Ironically, this led to the last election in which Netanyahu lost and he was ousted from the prime minister’s job as a result.