Oct 21, 2020

Axios from Tel Aviv

Welcome to the inaugural edition of Axios from Tel Aviv, and thank you so much for subscribing. Please tell your friends to sign up!

  • Each week, we will bring you my best scoops, analysis from contributors from around the region, and our "Bibi Barometer" on the latest in Israeli politics.
  • Today's edition (1,770 words, 6½ minutes) centers on Israel's shifting relations with Arab countries and begins inside a secret Israeli mission in Bahrain.
1 big thing: Israel's secret embassy in Bahrain

Illustration: Annelise Capossela/Axios

Israel has been conducting undercover diplomacy in Bahrain for more than a decade through a front company listed as a commercial consulting firm.

Why it matters: The existence of the covert diplomatic mission in the Bahraini capital Manama shows the depth of a secret relationship that came out into the open with a White House ceremony last month.

  • The existence of the secret diplomatic office remained under an Israeli government gag order for 11 years. A short report about it appeared on Israel’s Channel 11 news last week.
  • Today, I'm reporting many more details based on conversations with Israeli and Bahraini sources, as well as Bahraini Commerce Ministry records.

The backstory: Negotiations over a potential secret diplomatic mission started in 2007–2008 through a series of secret meetings between Israel's Foreign Minister Tzipi Livni and her Bahraini counterpart, Khalid bin Ahmed Al Khalifa.

  • Their close relationship, along with a decision by Bahrain’s regional rival Qatar to shut down Israel's diplomatic mission in Doha, convinced the Bahrainis to approve the opening of a secret Israeli mission in Manama, Israeli officials say.

How it happened: On July 13, 2009, a company called The Center for International Development was registered in Bahrain.

It was a front, providing cover for Israeli diplomacy.

  • According to Bahraini public records, the company offered marketing, commercial promotion and investment services.
  • The front company changed its name in 2013. We can’t disclose the current name for security reasons.
  • According to the company’s website, it provides consultancy services to Western companies interested in non-oil investments in the Gulf — mainly in the fields of medical technology, renewable energy, food security and IT.
  • The website claims the company's strong network of contacts in Bahrain and around the region helps it close deals.

How it worked: The front company was in fact hiring a very specific type of employee: Israeli diplomats with dual nationality.

  • One of the shareholders listed in public records is Brett Jonathan Miller — a South African national who was appointed in 2013 as Israel’s consul general in Mumbai, India.
  • A second shareholder, Iddo Moed, is a Belgian national who today serves as the Israeli Foreign Ministry’s cyber coordinator.
  • On the company's board was Ilan Fluss, a British national and now the Israeli Foreign Ministry's deputy director general for the economy.
  • In 2018, the company appointed a new CEO — an American national whose name can't be revealed. He was recently replaced by another Israeli diplomat with dual nationality.
  • The Israeli diplomats all had cover stories, backed up by unconvincing LinkedIn profiles.

Behind the scenes: A small group of Bahraini officials was aware of the secret mission.

  • Several times over the last decade, concerns about possible leaks led to urgent damage control consultations between the countries to make sure the secret would remain secret.
  • Israeli officials tell me the secret mission really did promote hundreds of business deals struck by Israeli companies in Bahrain. It also served as a secret communications channel for the Israeli government.

What’s next: On Oct. 18 in Manama, minutes after the signing of a joint communique on establishing diplomatic relations, an Israeli official handed the Bahraini foreign minister a note with a request to open a genuine embassy in Manama.

  • The infrastructure is already largely in place thanks to the secret mission, Israeli officials say.
  • "All we have to do is change the sign on the door," one told Axios.
2. Normalization status report

An Emirati delegation lands at Israel's Ben Gurion airport on Tuesday. Photo: Jack Guez/AFP via Getty

The White House is attempting to leverage momentum from Israel's normalization deals with Bahrain and the UAE to get more Arab countries on board before the U.S. election.

Driving the news: President Trump wants Sudan's removal from the U.S. state sponsors of terrorism list to be accompanied by a pre-election announcement on Israel.

  • At a minimum, the Trump administration wants Sudan to announce its willingness to end the state of belligerency with Israel and start a process of normalization.
  • That could happen as soon as this week.

Saudi Arabia gave quiet political support to the UAE and Bahrain, and it took a smaller step of its own by beginning to allow Israeli airliners to use its airspace.

  • At least publicly, the Saudi position is that its energies are focused on a resumption of negotiations between the Israelis and the Palestinians.
  • But if Trump is re-elected, he'll likely make bringing the Saudis into the normalization process a priority.

Morocco is waiting to see who wins the U.S. election before making any decisions.

  • If Trump wins, it will try to tie normalization with Israel to U.S. recognition of Moroccan sovereignty in occupied Western Sahara.
  • Biden wouldn't agree to such a deal, making Moroccan recognition of Israel less likely if he wins.

Oman has long-standing unofficial relations with Israel, but the new sultan wants to move slowly for now.

  • Israeli and U.S. officials expect Oman to base its decisions on the results of the election.

Qatar also has a close relationship with Israel, in part because of its cooperation in the Gaza Strip.

  • But while the U.S. would like Qatar to normalize relations with Israel, regional tensions between Qatar and Saudi Arabia, the UAE and Bahrain make that a complicated proposition for Israel.

Where things stand: U.S. officials tell me they made sure the implementation of the UAE and Bahrain deals would be well underway before the election, but now feel things are on course and they are less needed in the process.

  • Palestinian leaders continue to condemn any steps from Arab states toward normalization with Israel, and they hope a Biden administration takes office in January with a new set of policies toward the region.

Go deeper: Deals on flights and visas sealed in first official UAE visit to Israel

3. The view from Sudan: Embattled government strikes a deal

Protesting normalization in Khartoum. Photo: Abbas M. Idris/Anadolu Agency via Getty Images

Sudan's transitional government is on the verge of collapse, but Trump’s decision to remove Sudan from the U.S. list of states that sponsor terrorism could prevent that grim scenario, Wasil Ali, former deputy editor of the Sudan Tribune, writes for Axios:

The big picture: The country is virtually bankrupt. There are long queues at petrol stations and bakeries as the country grapples with severe flour and gasoline shortages. Electricity outages are back as temperatures continue to hover around 100℉.

The state of play: The government is very concerned that the current frustration among the Sudanese people could lead to widespread demonstrations.

  • Protests brought down ex-president Omar al-Bashir’s regime last year. There is genuine fear among Sudanese officials that similar protests may lead to the downfall of the government that replaced him.

The backstory: Removal from the U.S. terror list had been expected ever since the former regime was toppled.

  • There is a sense of betrayal in Sudan that the U.S. kept dragging its feet on the issue, in particular by linking it to normalization with Israel, something that has long been considered a taboo in Sudan.
  • However, many Sudanese feel their situation is too dire to remain dogmatic about ties with the Jewish state, even if they remain wholly sympathetic with the plight of the Palestinians.
  • If the road toward lifting sanctions and economic prosperity is normalization, then so be it.

What's happening: There are forces in Sudan — particularly Islamists and remnants of the previous regime — who use normalization as a rallying cry in their attempts to topple the government.

  • The governing council's military faction, led by Abdel Fattah al-Burhan, has been eager to seal the deal with Israel.
  • Fearing the domestic backlash, however, Prime Minister Abdalla Hamdok was adamant that a sizable incentive was needed in order to sell normalization to the public.
  • More recently, he seems to have softened his stance and accepted a watered-down deal.

What’s next: The onus is now on the U.S. to move quickly to keep its end of the bargain and help keep the forces who seek to turn back the clock at bay.

4. The view from Bahrain: A mixed reception

Sealing the deal, in Manama. Photo: Onen Zvulun/AFP via Getty

Bahrain has been moving more cautiously on normalization than the UAE — signing a “joint communique on establishing peaceful and diplomatic relations” on Sunday rather than a full treaty — due to domestic criticism of the normalization move.

Driving the news: Palestinian leaders called Bahrain's decision to recognize Israel before a Palestinian state was established a "stab in the back," and some in Bahrain spoke out in solidarity with the Palestinians.

Ahdeya al-Sayed, president of the Bahrain Journalists Association, writes that the critics include members of older generations who are affiliated with Pan-Arab ideology.

She writes:

  • The message "Bahrainis against normalization" was shared on social media.
  • Abed al-Monem al-Meer, the former editor of the Bahraini weekly Al-Nabarallied opposition to the deal in Manama's Muharraq quarter and called for a referendum.
  • Some Shiite Bahrainis also view Iran's supreme leader as a religious figure and therefore support his criticism of normalization with Israel.

The other side: Supporters of the deal believe Israel can help Bahrain counter threats from Iran and Hezbollah, terror attacks by ISIS and al-Qaeda, and the rise of regional rivals Turkey and Qatar.

  • “It is our role to give the appropriate response to those who question the sovereign decision of our kingdom to be part of the world and not to get dragged into emotions and political slogans on the Palestinian issue," wrote Wejdan Fahad, a columnist for the Akhbar al-Khaleej newspaper.

The bottom line: While some people in Bahrain perceive the agreement with Israel as a positive move toward creating a new Middle East, others see it as an intentional slap in the face.

5. Bibi Barometer: After another lockdown, another election?

Photo Illustration: Eniola Odetunde/Axios. Photos: Pool, Gali Tibbon/Getty Images

Israel is slowly emerging from its second national COVID-19 lockdown, but Prime Minister Benjamin Netanyahu is struggling to rebound politically from widespread criticism over his handling of the second wave.

Why it matters: Israel’s power-sharing government — the dysfunctional result of a year-long political standoff — is in danger of collapse less than six months after it was formed. Israel could soon face new elections, perhaps in March.

  • Netanyahu would enter them at possibly his weakest point politically in the last decade.
  • His trial on charges of bribery, fraud and breach of trust is due to resume in January with witness testimony and the presentation of evidence. Netanyahu may have to sit in the courtroom three days a week to wage his defense.
  • For the last three months, there have been frequent demonstrations near Netanyahu’s official residence in Jerusalem led by young people frustrated by the economic crisis and the government’s handling of COVID-19.

Flashback: Netanyahu’s approval ratings looked strong in May as his new government was sworn in, with the first wave of the pandemic having been suppressed by an early lockdown

  • The exit from lockdown proved far trickier politically, and his party slid in the polls from a projected 40 seats to 27 amid perceptions he’d mishandled it.
  • Netanyahu’s relations with coalition partner Benny Gantz are terrible, and their power-sharing government is dysfunctional and paralyzed.
  • Meanwhile, Netanyahu’s archrival Naftali Bennett, who heads a hardline right-wing party, has eaten into his conservative base and even picked up some center-left voters by focusing relentlessly on the pandemic.
  • A recent poll projected 24 seats for Bennett’s party in a potential election — three times the number it has today.

What’s next: The next two months will be critical for the future of Netanyahu’s government.

  • If it fails to pass a 2020 budget before Dec. 23, it will automatically collapse, triggering early elections.
  • Gantz is insisting that the 2021 budget be passed this year as well, but Netanyahu wants to put that off until March.
  • If no agreement is reached by mid-November, Israel will be on track for yet another election.