Israeli Prime Minister Naftali Bennett proposed a Russia-Ukraine summit in Jerusalem to Russian President Vladimir Putin in their meeting last October, Ukrainian and Israeli officials tell me.

Why it matters: Israel is one of the few countries that has good relations with both Kyiv and Moscow and is able to pass messages between them.

Flashback: When a senior Ukrainian delegation visited Israel in April 2021, as Russian troops were massing on the border, the government decided to try to use its close relationship with Israel to promote dialogue with Russia, Ukrainian Ambassador to Israel Yevgen Korniychuk told me in an interview.

• Ukrainian President Volodymyr Zelensky’s closest adviser, Andriy Yermak, asked then-Prime Minister Benjamin Netanyahu if he would be prepared to organize a summit between Putin and Zelensky. Netanyahu wasn't very enthusiastic but said he'd consider it if both sides wanted it, according to an Israeli source.
• Netanyahu's advisers raised the idea with the Kremlin in April and again in May but didn't get a positive response. According to Korniychuk, the Russians said they wouldn't discuss Crimea or the Donbas, and that was a non-starter for Ukraine.

Bennett spoke to both Putin and Zelensky within days of replacing Netanyahu last June. Zelensky also invited Bennett to a forum calling attention to Russia’s annexation of Crimea (he didn't attend).

• Then in October, Israeli President Isaac Herzog visited Kyiv and met with Zelensky, who told him about Netanyahu's mediation efforts and asked if the new Israeli government would resume them, according to Ukrainian and Israeli officials.
• Herzog briefed Bennett, who was scheduled to meet Putin two weeks later in Sochi. Bennett called Zelensky the day before traveling, and the Ukrainian president again raised the summit idea and said it could perhaps be at a lower level — between national security advisers, for example, rather than the heads of state.
• When Bennett raised the idea in Sochi, Putin wasn't at all enthusiastic and harshly criticized Zelensky, according to Ukrainian and Israeli officials.
• Bennett and Herzog's offices both declined to comment for this story, as did Netanyahu.

The state of play: The Israeli government has been completely silent in recent weeks as warnings of a Russian invasion of Ukraine have grown louder.

• In recent calls, Secretary of State Tony Blinken raised the issue with Israeli Foreign Minister Yair Lapid and Putin raised it with Bennett. In both cases the Israeli side said they mostly listened.
• “We love Ukraine but we are not going to get involved in a conflict between superpowers like the U.S. and Russia. We have enough on our plate," a senior Israeli official told me.
• Korniychuk told me Ukraine remains willing to attend a summit in Jerusalem, but is also prepared to fight. “Our main lesson is to be Israeli — don’t listen to anybody and be ready to defend ourselves by ourselves. A Russian invasion won’t be a picnic [for the Russians]. 30% of Ukrainians said they are ready to fight if Russia invades. The Russians will have heavy losses," Korniychuk said.

Worth noting: Ukraine's relationship with Israel did yield a tangible benefit last February when the Ukrainians were desperate for vaccines but couldn't get through to Pfizer. Netanyahu organized a call between Zelensky and Pfizer CEO Albert Bourla, and Ukraine signed a contract two weeks later.

The Palestinian Authority hopes to put the stifling fiscal crisis it faced in 2021 behind it, but that will depend in large part on a pledge from the European Union, writes Abdel Raouf Arnaout, chief political reporter for Al-Ayyam newspaper.

Why it matters: The U.S., EU, Israel and the PA itself all fear that failing to pay public sector salaries could trigger the Palestinian government's collapse.

• The PA struggled throughout 2021 to pay its 140,000 employees in the West Bank and Gaza Strip.
• In November and December, the PA paid employees between 70% and 80% of their salaries and said it would repay the difference if funds became available.

The backstory: According to Palestinian Finance Ministry, international aid to the Palestinian budget continued its steep decline from $1.3 billion as of 2013 to $129 million last year.

• Meanwhile, the PA's debts to local banks amount to $2.37 billion — higher than the official borrowing limit.
• Israel collects tax revenues for the PA, but has deducted $400 million since Jan. 2019, according to the Palestinian Finance Ministry. Israel claims that's equivalent to the amount the PA pays annually to the families of Palestinians killed or jailed during political attacks in Israel — payments Israel has demanded be halted.

What they're saying: Ibrahim Melhem, spokesman for the Palestinian government, told me the government hopes to see movement in the coming months, based on promises from the Europeans to resume pumping funds to the Palestinian treasury and development projects.

• Melhem said he expects European support to resume in May and that Algeria's recent pledge of $100 million "is a good indication that the Arab brothers can resume financial support" ahead of the upcoming Arab League Summit in Algiers.

Behind the scenes: The U.S. and other Western countries are closely following the PA's financial difficulties. A senior U.S. official tells me the Biden administration has asked a number of Arab countries to provide financial support.

• A European source with insight into the thinking in Brussels told me the EU fears the budget crisis will have steep consequences for the PA's ability to carry out its duties to the Palestinian people.
• An announcement on the EU's financial support for the Palestinians over the next four years — currently estimated at $340 million annually — has been expected for several months but not made. The source expects it to come soon.

Worth noting: President Mahmoud Abbas’ Fatah party Tuesday nominated Civilian Affairs Minister Hussein al-Sheikh to the membership of the Palestine Liberation Organization executive committee.

• That means al-Sheikh is likely to take the seat of the late Saeb Erekat and officially become the chief Palestinian negotiator and primary point of contact with Washington.

Go deeper: Palestinians press Biden to take more active role in Israeli-Palestinian conflict

To get a deal, Iran will have to either accelerate its pace at the negotiating table or slow down the pace of its nuclear program to buy more time for diplomacy, a senior U.S. official involved in the Vienna nuclear talks tells me.

Why it matters: Biden administration officials have set the end of January or beginning of February as an unofficial deadline for the talks, in large part because they believe Iran's nuclear advances will soon render the 2015 deal ineffective.

• The U.S. official said there had been some progress recently in the nuclear talks but that it had been “painfully slow and painfully small," with the core issues still unresolved.
• The talks aimed at salvaging the 2015 Joint Comprehensive Plan of Action (JCPOA) are being held between Iran, China, Russia, France, Germany, the U.K. and EU, with the U.S. participating indirectly.
• A European diplomat briefed on the talks said gaps still remain on the steps the Iranians need to take to limit their nuclear program, on the scope of sanctions relief to be provided to Iran, and on the guarantees Iran is demanding that no future U.S. administration will pull out and reimpose sanctions.

What they're saying: “We are the closest we have ever been to a deal but also the closest we have ever been to a breakdown of the talks," the U.S. official said.

• “We are prepared and willing to reach a deal soon. But we are also prepared and bracing for the possibility of a breakdown which would spell the JCPOA's likely demise," the U.S. official said.

What’s next: The talks in Vienna will continue for at least another few weeks, but the U.S. official said they can't go on as they are now much longer.

• The U.S. and the other parties to the deal have made clear to Iran that if it needs more time for diplomacy it will have to slow the nuclear program to keep time on the clock, the official said.
• At the moment, all efforts are concentrated on returning to the 2015 nuclear deal and not on getting some kind of an interim agreement, the U.S. official said. Iran also says it doesn’t want an interim deal.
• The Iranians continue to say they're negotiating in good faith for an agreement, but also to insist on guarantees that the deal will last and they'll get the economic benefits they expect. It's unclear exactly how such guarantees would work.

U.S. envoy for Yemen Tim Lenderking traveled to the Gulf on Wednesday in the aftermath of an attack by Houthi rebels that killed three people in Abu Dhabi.

Why it matters: The trip was previously planned but became much more urgent after the attack threatened new escalation in the fighting in Yemen and more broadly in the region.

• The Houthi attack was unprecedented because the Iran-backed rebels had previously targeted Saudi Arabia and ships in the region but not the United Arab Emirates, which is a member of the Saudi-led alliance that intervened in Yemen's civil war in 2015.
• The Emiratis asked the Biden administration to re-designate the Houthis as a terror organization after the attack. The UAE is also pushing for an emergency meeting of the UN Security Council to discuss and condemn the attack.
• The Saudi-led coalition also responded with strikes on Yemen's rebel-held capital, Sana'a.

What they're saying: “The Special Envoy and his team will press the parties to de-escalate militarily and seize the new year to participate fully in an inclusive UN-led peace process," the State Department said in a statement.

The big picture: The attack took place while Saudi Arabia and the UAE were trying to de-escalate regional tensions with Iran.

• The UAE invited Iranian President Ebrahim Raisi for a rare visit to Abu Dhabi, which could take place on Feb. 7 according to media reports.
• Saudi Arabia also allowed three Iranian diplomats to enter the country to take up posts at the Iranian mission for the Organization of Islamic Cooperation in Jeddah.
• A spokesman for Iran's Foreign Ministry said this week that Iran and Saudi Arabia could reopen their embassies in Riyadh and Tehran soon.

What’s next: It is unclear what bearing the Houthi attack may have on the regional de-escalation process.

Netanyahu is negotiating a possible plea deal over the corruption charges against him, but Attorney General Avichai Mandelblit appears to be toughening his terms.

Why it matters: Mandelblit leaves office on Jan. 31. Negotiations could continue beyond that point, but the next attorney general may be less interested in quickly reaching a deal.

Behind the scenes: During his secret negotiations with the attorney general, Netanyahu recruited one of his political nemeses — former Supreme Court Chief Justice Aharon Barak — to lobby Mandleblit in favor of a plea deal.

• When Barak's intervention came to light it shocked many on the political right, who had been attacking the judge for years for pulling the court in a more activist direction, and many on the left, who couldn't believe Barak would lobby in favor of Netanyahu after his attacks on the Israeli legal system.
• Mandelblit and Barak have both faced heavy criticism in the press and within the legal establishment over the potential deal.

The state of play: According to Israeli press reports, Mandelblit has toughened his position, in part due to pressure from the prosecutors in Netanyahu’s trial.

• The attorney general is now demanding that Netanyahu agree to exit politics for seven years and to a sentence of 7 to 9 months in prison, to be served as community service.
• Netanyahu brought his wife and their two sons to a meeting earlier this week with his lawyers, apparently to persuade the family — which has appeared skeptical of any deal — to get on board.
• Netanyahu's lawyers have said in a statement that he won't agree to leave politics for seven years, but it's unclear whether that's his real position or a negotiating tactic.

What’s next: We should have a clearer sense by the end of this week whether the parties are on track for a deal before Mandelblit leaves office.