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Trump with Emirati Crown Prince Mohammed bin Zayed. Photo: Jabin Botsford/Washington Post via Getty

The United Arab Emirates canceled a planned trilateral meeting with the U.S. and Israel last Friday to send a message to Israeli Prime Minister Benjamin Netanyahu over his opposition to a pending arms deal between the U.S. and UAE, three sources with knowledge of the matter tell me.

Why it matters: Just days after Israel and the UAE announced a landmark normalization deal, there has already been a spike in tensions.

The backstory: Israeli media reported that, as a condition of the deal, Netanyahu signed off on pending sales of F-35 fighter jets to the UAE. He denied those reports and publicly came out against the potential arms deal.

  • Israel's status as the only Middle Eastern country to possess the most advanced fighter aircraft in America's arsenal currently gives it a clear technological advantage over other militaries in the region.
  • But the F-35 deal is a top priority for the UAE, which saw it as linked to the normalization accord with Israel.

Between the lines: The F-35 deal has been under discussion for some time, and Trump administration officials have said the normalization deal makes it more likely to proceed, while acknowledging their obligation to ensure Israel's qualitative military edge in the region.

  • The Emiratis were under the impression going into the normalization deal that while Netanyahu may have reservations on the F-35 issue, he would not air them publicly, the three sources briefed on the matter say.
  • They felt Netanyahu's statements — suggesting he had no knowledge of the proposed deal and insisting he'd oppose it — violated the understanding between them.
  • They were particularly angry that he told members of his Cabinet that he would raise his concerns about the deal with members of Congress.
  • The Emiratis decided to send a message.

Driving the news: America's UN ambassador, Kelly Craft, invited her Israeli and Emirati counterparts to take part in a trilateral meeting last week at the UN.

  • It was to be a ceremonial affair — in public, with photos and a joint statement.
  • All sides confirmed their attendance and were planning the details when the Emiratis suddenly told Craft and the White House they wanted to cancel it indefinitely.

The latest: The F-35 deal came up during Secretary of State Mike Pompeo’s meetings in Israel today with Netanyahu and other top Israeli officials, and it's expected to be discussed again tomorrow when Pompeo travels to Abu Dhabi.

Brian Hook, the U.S. envoy for Iran, who is traveling with Pompeo, told me in an interview that the Trump administration would achieve two objectives: protecting Israel’s qualitative military edge and helping the UAE to defend itself against Iran.

  • “The UAE and Israel face the common enemy of Iran. We are going to continue enhancing UAE’s defense posture in a way that preserves our security commitments to Israel," Hook said.
  • "The UAE has agreed to normalize with Israel — it’s a new relationship. It creates space for more cooperation on security. Any conversations that are needed around Israel's qualitative military edge will take place."

What to watch: The Emiratis plan to hold off on further high-level public meetings with Israel until Netanyahu’s position is cleared up, the sources tell me.

Emirati officials declined to comment for this story, as did the White House and Israeli Prime Minister's Office.

Go deeper: How the Israel-UAE deal came together

Go deeper

Dec 1, 2020 - World

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Israel's governing coalition is falling apart, setting the stage for the fourth election in two years.

Driving the news: Defense Minister Benny Gantz announced tonight that his Blue and White party would vote in favor of dissolving parliament on Wednesday because Prime Minister Benjamin Netanyahu — Gantz's political rival turned coalition partner — was refusing to pass a budget and reneging on their power-sharing deal.

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Europe's biggest soccer clubs have established The Super League, a new midweek tournament that would compete with — and threaten the very existence of — the Champions League.

Why it matters: This new league, set to start in 2023, "would bring about the most significant restructuring of elite European soccer since the 1950s, and could herald the largest transfer of wealth to a small set of teams in modern sports history," writes NYT's Tariq Panja.

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2021's expected earnings blowout begins

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First-quarter earnings so far have been very strong, outpacing even the rosy expectations from Wall Street and that's a trend that's expected to continue for all of 2021. S&P 500 companies are on pace for one of the best quarters of positive earnings surprises on record, according to FactSet.

Why it matters: The results show that not only has the earnings recession ended for U.S. companies, but firms are performing better than expected and the economy may be justifying all the hype.

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