As nuclear talks between Iran and world powers minus the U.S. reconvene in Vienna, Israeli leaders and the Israeli security establishment are consumed with Iran. The related issues of Iran’s nuclear ambitions, Iran’s desire for regional hegemony, and Iran’s sponsorship of proxies and militias across the Middle East constitute the most important and urgent threats that Israel faces. Israeli rhetoric about the unacceptability of a nuclear Iran has increased, along with leaks about Israeli military preparations to deal with Iran should it continue along its current trajectory and leaks about Israeli unhappiness with the American approach. In short, Iran is at the top of the agenda with whatever comes next in a distant second place, and the Israeli government is accordingly trying to minimize other national security distractions as best it can.
This is most obvious on the Palestinian front. While the last few weeks have seen a disturbing uptick in lone wolf terrorism against Israelis, necessitating stricter security measures in Jerusalem in particular, the general Israeli position has been to do whatever is necessary to keep things as calm and quiet as possible in both the West Bank and Gaza. Aside from the various measures that Defense Minister Benny Gantz has already pushed through, Israel urged donor countries to the Palestinian Authority to step up their economic aid to the Palestinians at the meeting of the Ad Hoc Liaison Committee last month, which is the group that oversees international support for the PA. The irony, of course, is that Israel is effectively pleading with countries to prop up the PA economically while it is itself contributing to the PA’s dangerously weak status by withholding tax revenues that it collects on its behalf in response to the PA’s ongoing martyr and prisoner payments.
A similarly ironic dynamic is at work in Gaza. Israel effectively greenlit a deal a couple of weeks ago between Hamas, Qatar, and Egypt, whereby Qatar will purchase Egyptian fuel and transfer it to Hamas, and Hamas will then sell the fuel in Gaza and ostensibly use the proceeds to pay Hamas civil servant salaries, though there is no effective oversight mechanism to ensure that this last part actually occurs. In other words, Israel is allowing—and even encouraging—outside parties to keep Hamas sated so that there are no outbursts from Gaza. In particular, Israel is banking on a burgeoning Qatari-Egyptian relationship to keep Gaza quiet by cementing Hamas in place despite the fact that Israel cannot and will not directly help or talk to Hamas, for obvious reasons.
Israel is not only holding its nose and acquiescing to normatively objectionable arrangements, but also facilitating them. While the Gaza component of this trend can be viewed as a continuation of Bibi Netanyahu’s policy of quiet for quiet and then extending the same underlying logic to the West Bank, it is difficult to view this as isolated from Israel’s Iran conundrum. It isn’t only a matter of generally wanting to keep things stable on the Palestinian front, but particularly wanting stability right now. It is even possible to view the sudden long-term halt to Israeli planning for a new neighborhood in the Atarot neighborhood beyond the Green Line in northern Jerusalem following a reported angry call from Secretary of State Tony Blinken in this vein, as Israel does not need more disagreements with the U.S. right now that go beyond Iran policy. The urgency of dealing with Iran crowds out all else, leading Israel to compromise in other areas.
Yet while Israel is very clearly signaling how it prioritizes its national security concerns and where it wants to focus, American policy is making it more difficult, largely because we are confusing importance and urgency, and in some cases misreading both. Israel is unusually reliant right now on the PA’s ability to operate and Qatar’s willingness to assist, and U.S. moves that have taken place or that are being contemplated are complicating these variables. When it comes to our policies toward the Palestinians relative to Israeli policies on the same subjects, the U.S. continues to be more Catholic than the pope.
The primary reason for the PA being as close to collapse as it has ever been is financial, and much of that can be traced back to the Taylor Force Act that prohibits even one cent of American funding that directly benefits the PA so long as martyr and prisoner payments continue. When Taylor Force became law, it effectively forced Israel to follow suit in some manner, leading to Israeli legislation requiring the deduction of tax revenues from the PA, which is far less severe than U.S. policy that cancels all funding but is far more impactful given PA reliance on tax revenues for its budget. The logic behind Taylor Force is absolutely sound, as the PA martyr and prisoner payments create odious incentives, so I lay this out not as a philosophical objection to the policy but to illustrate the causal process of it leading to a PA crisis—a situation that is within the PA’s ability to mitigate by reforming the payments process, but that does indeed constitute a crisis.
The Israeli government recognizes the conundrum, and so while it has legislatively tied its own hands, it is busy trying to raise money for the PA from actors who have not taken a similar self-binding step. At the same time, the U.S. this year is set to more than half its budgetary contribution to the Palestinian Authority Security Forces, the only Palestinian state entity we are legislatively allowed to fund. While Israel races to prevent a PA collapse, we put even more pressure on the PA’s ability to maintain basic law and order—which at this point barely seems to extend beyond the confines of Ramallah—supposedly to benefit Israel and Israeli security.
On top of this, new draft Senate legislation was released on Monday intended to be a follow-on to Taylor Force. The proposed bill would allow the Treasury Department to sanction foreign banks that facilitate the martyr and prisoner payments in any way and prohibit them from holding correspondent accounts in the U.S. or dealing in dollars, with two banks connected to the Qatari government particularly in the crosshairs. The new legislation is being pushed just as the Israeli government is relying even more on Qatari good graces and willingness to solve its Hamas problem in Gaza, and as Israel is struggling to find financial institutions willing to deal with the PA, let alone Hamas, out of fear of getting caught in a web of American sanctions.
Unlike cutting funding to the PA Security Forces, there is a better argument to be made on the merits for the new Taylor Force draft bill. The primary question right now is not about the merits but about the timing, and letting the urgent priority suffer in order to carry out an important priority that is not nearly as urgent. In every way, Israel is trying to reduce all other problems to focus on Iran, including abetting policies that in other circumstances it might oppose. American priorities are not identical to Israeli ones, and we will undoubtedly continue to chart our own path with regard to the Palestinians that in many ways is out of sync with the Israeli path. But there should be no mistaking the dynamic that is playing out, which is that Israel has an Iranian dilemma that is both of utmost importance and utmost urgency, and we are unnecessarily doing things that have the potential to distract Israel’s energy from dealing with it.