Iran announced on Sunday a blackout occurred at its uranium enrichment facility in Natanz.

Why it matters: The incident occurred as U.S. Defense Secretary Lloyd Austin arrived for his first visit in Jerusalem amid nuclear talks in Vienna and growing tensions between Israel and Iran.

Secretary of Defense Lloyd Austin arrived for his first visit in Jerusalem amid nuclear talks in Vienna and growing tensions between Israel and Iran.

Why it matters: Austin met his counterpart Benny Gantz and will meet later with Prime Minister Netanyahu to discuss Iran and regional security issues.

The Biden administration has encouraged Israel to agree to a Jordanian request for additional water, Israeli officials tell me.

Why it matters: Israeli-Jordanian relations have recently sunk into a new crisis after a period of slow improvement, and the water supply is another point of tension.

Both the Biden administration and the Israeli government are concerned about a potential Hamas victory in the upcoming Palestinian elections, but neither will say so publicly so as not to be blamed for trying to sabotage the vote, Israeli officials tell me.

Driving the news: In a call last Friday with Secretary of State Tony Blinken, Israeli Foreign Minister Gabi Ashkenazi stressed that Israel wouldn't put any obstacles in the way of the vote, but raised concerns that divisions within President Mahmoud Abbas’ Fatah party could pave the way for a Hamas win.

Secretary of State Tony Blinken announced on Wednesday that the U.S. was reversing Donald Trump's cuts in aid to the Palestinians.

Why it matters: The step was taken over Israeli opposition and fulfills a campaign promise from President Biden as he attempts to reengage with the Palestinians. The U.S. will provide more than $235 million in total aid, of which $150 million will go to the UN Relief and Works Agency (UNRWA), which supports Palestinian refugees.

Israel could be risking escalation with Iran and tensions with the Biden administration by continuing to strike Iranian ships — a risk that is exacerbated by Israel's political crisis and dysfunctional interim government.

Why it matters: An Islamic Revolutionary Guard Corps ship was attacked in the Red Sea off the coast of Yemen on Tuesday, the same day the Vienna talks opened.

Prime Minister Benjamin Netanyahu has the first crack at forming Israel's next government, but the job could ultimately fall to a much less well-known figure: Naftali Bennett.

Why it matters: Bennett's right-wing Yamina party won just seven seats in the March 23 elections, but an unprecedented set of political circumstances has created an opening for the former defense minister and tech entrepreneur to replace Netanyahu, with the support of the center-left.

U.S. Secretary of Defense Lloyd Austin is expected to travel to Israel next week, Israeli officials tell me.

Why it matters: This will be the first Cabinet-level visit to the Middle East from the Biden administration, which has been shifting attention away from the region and toward China and Russia.

Two weeks after Israel's fourth consecutive election, Israeli President Reuven Rivlin on Monday gave the mandate for forming a new government to Prime Minister Benjamin Netanyahu.

Why it matters: Netanyahu's path for forming a coalition is very, very narrow. Although he received the mandate from the president, Netanyahu does not at the moment have a majority in the Israeli Knesset that will allow him to form a new government. 

As the first witness in Israeli Prime Minister Benjamin Netanyahu’s corruption trial took the stand on Monday, President Reuven Rivlin was consulting with representatives of Israel's political parties as to who should form the next government.

Why it matters: This split-screen moment between the Jerusalem district court and the president’s residence encapsulated the political and legal crisis that has engulfed Israel over the last two years. The crisis appears likely to continue now that a fourth election has ended with no clear winner.