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A secret deal for the sale of drones from an Israeli company to the United Arab Emirates (UAE) that failed in 2009 caused a deep rift in relations between Israel and the Gulf state. Former U.S. and Israeli officials tell me the crisis was only resolved after two years of efforts by the Obama administration and Israel's Mossad intelligence service.

Why it matters: Israel and the UAE had formed a secret alliance in the fight against Iran's nuclear program and activity across the Middle East, which was damaged when the deal failed.

The backdrop: After Netanyahu assumed office in 2009, he was briefed by Mossad chief Meir Dagan about the proposed deal for the sale of sophisticated drones by a private Israeli company, former U.S. and Israeli officials told me.

  • According to one account given by former Israeli and U.S. officials, Netanyahu saw the deal as an opportunity to advance future military options against Iran, and gave it the go ahead.
  • According to another account, the private Israeli company signed a deal with the UAE government and only then notified the Israeli government — pushing Netanyahu into a corner.

The deal moved forward and the UAE even paid a down payment of tens of millions of dollars. But then trouble started.

  • The Israeli ministry of defense is responsible for giving licenses for such deals. It was notified at a late stage and refused to approve the deal over concerns about giving sensitive technology to the UAE and because of U.S. reservations about the deal.
  • When the deal was cancelled the UAE government, especially its de facto ruler Mohammed Bin Zayed (MBZ), was furious.
  • Dan Shapiro, who was the Middle East director at the National Security Council at the time, told me MBZ felt betrayed by the Israelis.

Former U.S. and Israeli officials told me the failed deal, combined with the assassination of a Hamas operative in Dubai, created a deep crisis between Israel and the UAE which lasted from 2010 to 2012.

  • Shapiro told me the National Security Council staff and the U.S. intelligence community were talking to both parties in order to understand what each side wanted or was willing to do to end the crisis. Those talks lasted around two years.

The deal that ended the crisis contained several elements, according to former U.S. officials:

  • Israel did not take responsibility for the assassination but said it would not pursue assassinations on UAE soil in the future.
  • The private company paid the UAE back some of the money and agreed to let the kingdom use the rest to buy other military hardware.
  • The Israeli government agreed to boost security and intelligence dialogue with the UAE, and both sides committed to renew their joined efforts to isolate Iran and extremist terror groups.

Go deeper

Updated 4 hours ago - Politics & Policy

British national named in Colleyville synagogue standoff

A law enforcement vehicle sits near the Congregation Beth Israel synagogue on Jan. 16. Photo: Brandon Bell/Getty Images

British national Malik Faisal Akram took four people hostage at a Texas synagogue outside Fort Worth on Saturday, the FBI said in a statement.

State of play: Authorities had initially declined to release the name of the 44-year-old suspect or identify the hostages, all adults, though police chief Michael Miller confirmed that one of those held was Rabbi Charlie Cytron-Walker, who leads the congregation.

Updated 4 hours ago - Politics & Policy

Omicron dashboard

Illustration: Brendan Lynch/Axios

  1. Health: Concerns grow over CDC's isolation guidelines — Experts warn of more COVID-19 variants after Omicron — WHO recommends 2 new treatments — What "mild" really means when it comes to Omicron — Deaths are climbing as cases skyrocket.
  2. Vaccines: America's vaccination drive runs out of gas— Puerto Rico expands booster shot requirements— Supreme Court blocks Biden's vaccine mandate for large employers.
  3. Politics: Vivek Murthy calls SCOTUS vaccine mandate block "a setback for public health" — Focus group says Biden weak on COVID response, strong on democracy
  4. Economy: America's labor shortage is bigger than the pandemic— — CDC COVID guidance for cruise ships to be optional starting Saturday — The cost of testing.
  5. States: West Virginia governor feeling "extremely unwell" after positive test — Youngkin ends mandates for masks in schools and COVID vaccinations for state workers — America struggles to keep schools open
  6. World: Beijing reports first local Omicron case weeks before Winter Olympics — Teachers in France stage mass walkout over COVID protocols.
  7. Variant tracker
9 hours ago - Sports

Novak Djokovic loses Australian visa appeal

Novak Djokovic of Serbia plays a forehand during a practice session ahead of the 2022 Australian Open at Melbourne Park on January 14, 2022. Photo: Daniel Pockett/Getty Images

Tennis star Novak Djokovic left Australia on Sunday evening, facing a three-year visa ban after an appeals court in the country revoked his visa.

Driving the news: Djokovic will not be able to defend his Australian Open title when the tournament starts in Melbourne. The World No. 1 is looking to break a three-way tie with Roger Federer and Rafael Nadal for most Grand Slam men's singles titles.