Could the Iran Nuclear Deal unlock the Israel-Palestine conflict?

Tom Grein | Middle East and North Africa Fellow


When President Obama signed the Iran Nuclear Deal in 2015, his action was denounced by key American allies in the Middle East. Israeli Prime Minister Benjamin Netanyahu called it a “historic mistake” that would embolden Iranian efforts to destroy Israel, while the Saudi Foreign Minister cautioned increased “nefarious [Iranian] activities in the region”. In 2018 Donald Trump called the deal “defective to its core” and subsequently withdrew the United States, effectively killing it.


A principal objection to the deal was the release of billions of dollars in frozen assets and oil revenue which could subsequently be used to fuel Iranian aggression in the region. In recent years, Iran has violently challenged the regional status quo. In 2019, Iranian drones attacked Saudi Arabian oil installations, temporarily neutralising half the Kingdom’s oil capacity. Millions of dollars continue to flow to Hamas in Gaza and Hezbollah in Lebanon, while Iranian drones antagonise Israel in the Golan Heights. Iranian trained Houthi rebels seek to replicate Hezbollah’s Lebanese model of a ‘state within a state’ in Yemen, as other Shiite militias in Iraq, Bahrain and Kuwait were roused against their Sunni countrymen. The Islamic Republic’s imperial ventures have restructured the regions geopolitical dynamics.


Principally, Iran’s aggression has facilitated unprecedented relations between Israel and the Arab states. In 2018, Netanyahu held talks with Sultan Qaboos al Said of Oman in Muscat, while the Israeli Cultural Minister was given a tour of the Sheikh Zayed Grand Mosque by local officials in Abu Dhabi. Earlier this year the Bahraini Foreign Minister called on Arab states to accept Israeli sovereignty, while Saudi Crown Prince Mohammad bin Salman said, “it is about time the Palestinians take the proposals and agree to come to the negotiations table”. Saudi Arabia has also purchased Israeli weapons systems to fight the Houthi rebels in Yemen. These developments are a marked shift from the 1967 Arab League Khartoum Resolution that famously established the ‘Three No’s’: no peace with Israel, no recognition of Israel, no negotiations with it.


Driving this change is an understanding among Arab states that, unlike Iran, pan-Arab nationalist entities like Iraqi Ba’athism or jihadist movements like the Islamic State, Israel does not seek regional or ideological expansion. Its boundaries have historically extended through defensive wars, and as Yoram Hazony observes, is biblically bound to anti-imperialism. Moreover, Israel is uniquely effective at keeping its enemies at bay and has pulled off operations its neighbours could not. In 1981 Israeli aircrafts destroyed the Iraqi Osirak nuclear reactor seven months after a failed Iranian attempt; in 2007 it destroyed a Syrian nuclear site, while in 2018 it exposed Iran's underground nuclear program. With a war-weary West reluctant to intervene in the region, Israel’s military aptitude and strength is a significant Arab security asset.


The recent Arab-Israeli détente is momentous for other theatres of war too—namely the Israel-Palestine conflict. Israel’s capacity and willingness to confront Iran gives it significant bargaining power. While the Arab states have long benefitted from Palestinian grievance, the Iranian threat may finally push Arab powerbrokers to facilitate pragmatic change.


The cost-benefit analysis is simple—Iran poses a greater threat to Arab interests than their return on the exhausted profits of Palestinian victimhood. If the Palestinians feel themselves sufficiently isolated from the Arab world, and reconcile their ever-depreciating currency, perhaps external Arab pressure can induce necessary change. Peace negotiations have historically floundered—in part because of Arab unwillingness to accept Israel—to use it as a focus of pan-Arab unity and a distraction from domestic failings. The new Iranian threat neutralises these factors and demands cooperation with the Jewish state.


Could the now defunct Iran Nuclear Deal and its imperial consequences be a crucial element to unlocking one of the region’s most insoluble geopolitical quagmires? Observers of Middle Eastern politics continue to await the Trump Administration’s Peace Plan, though history says don’t hold your breath.


Iran’s increased aggression in recent years, however, has modified the region’s incentive structure and generated unprecedented Arab-Israeli cooperation. If Trump’s plan bears genuine fruit, historians may look back on the Deal, and its violent outgrowths, as critical to advancing peace. If nothing else, the layered irony of such a circumstance deserves a thought.


Tom Grein is the Middle East and North Africa Fellow for Young Australians in International Affairs.

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