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Israel and Saudi Arabia: new era of cooperation?


Israel and Saudi Arabia: new era of cooperation?

Saudi and Israeli leaders view recent regional developments as an opportunity to coordinate their interests and re-calibrate relations

The Middle East is experiencing a period of confronting transition. Iran’s era of global isolation is drawing to a close and the projection of US influence over regional affairs is in retreat. Autocrats, monarchs and elected representatives are acutely aware of how civil war, inter-state conflict and great power anxiety can destabilise the region’s strategic architecture. Yet they are much less conscious of where this transition will lead or how it will impact them once it reaches a settling point. In response, several states are readjusting their foreign policy calculations. Egypt’s recent attempted transfer of two Red Sea islands to Saudi Arabia and the resultant impact on Israeli-Saudi relations is one example marking a credible shift in regional relations.


Photo: Sherif Abdel Minoem/AP
Photo: Sherif Abdel Minoem/AP

In April, Egyptian President Abdel Fattah al-Sisi announced his country had signed a maritime border agreement to transfer the islands of Tiran and Sanafir to Saudi Arabia. The move was highly controversial in Egypt and in June, the country’s State Council annulled the agreement citing violations of the constitution. The government has said it will appeal the decision, paving the way for a High Court battle.

Many Egyptians believe the transfer was orchestrated in return for Saudi financial assistance. The timing of the agreement appears to justify this perception. Egypt’s cabinet announced the transfer agreement on April 10; the next day Saudi Arabia signed off on a five-year $24 billion aid package to the Egyptian government. The economic lifeline will go a long way to propping up Egypt’s struggling economy, which has been in decline since the 2011 revolution. The budget deficit now stands at 12 per cent of GDP, and with current economic growth falling short of government forecasts by as much as 40 per cent, financial aid may be the only immediate alternative to much-needed structural reform. Yet it will not come freely.

Saudi Arabia is proficient in swinging its economic clout to elicit support for its regional interests. Riyadh has recently secured Egyptian air support in Yemen to this effect. The Saudis will undoubtedly expect further cooperation from Egypt in return for their financial assistance.


Israel is crafting a discernible role for itself in the Saudi-Egyptian regional agenda, and views the Red Sea islands agreement as an opportunity for greater cooperation among all three states. Israel’s head of Foreign Affairs, Tzachi Hanegbi, recently welcomed the creation of a “strategic front” underpinned by the convergence of Sunni Arab and Israeli regional interests. Notably, these include the need to restrict Iran’s growing influence, a desire to degrade Salafi-jihadist movements and to broadly curtail the influence of political Islam. Israel and Saudi Arabia are both working towards this last point by supporting Sisi’s regime in Egypt, which deposed the Islamist government of Mohammad Morsi three years ago.

Does this mean a radical realignment of Israel’s regional policy towards a greater affinity with Saudi Arabia? Such a shift would be a notable development for two states that have never had official diplomatic, economic or political relations, and that have technically remained at war since Israel’s creation. Israel holds a vested interest in securing the right of navigation and protection of the islands, which lie at the entrance to its only Red Sea port of Eilat. It briefly administered the islands following the 1967 war, before returning them to Egypt under the 1979 Egypt-Israel Peace Treaty.

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If the islands were successfully ceded to Saudi Arabia it would imply Riyadh’s acceptance of the treaty and, by association, Saudi Arabia’s implicit recognition of Israel’s right to exist. Riyadh’s guarantee to abide by the principles of the Egypt-Israel Peace Treaty was confirmed by Israel’s Defence Minister, Moshe Ya’alon, who added that Egypt consulted Israel prior to the transfer as a precondition to the Saudi aid package. In May, Saudi and Israeli officials disclosed their countries had been holding a series of confidential high-level consultations to discuss shared strategic concerns. So where does this leave Israeli-Saudi relations, and what role will Egypt hold in their development?

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The current trend of Israeli-Saudi cooperation is markedly more opportunistic than strategic. The two states have several shared interests that are significant enough to warrant closer engagement, yet are ultimately unlikely to produce a strategic partnership. Rather, those interests serve as the foundation for a combined form of short-term soft power influence. Revealing Israel’s involvement in the Red Sea islands negotiations was a deliberate measure to lend legitimacy to the notion of a burgeoning regional bulwark against Iranian expansion, and to arouse renewed interest from Washington. This acts simultaneously as a bargaining chip and an insurance policy: the perception of collaboration will help to reassert stronger individual positions when engaging in strategic discussions with the next US administration, yet provides a fall-back position for Israeli and Saudi interests if respective US negotiations fall short of their expectations.


Saudi Arabia will continue behind-the-scenes cooperation with Israel in areas of mutual concern, so long as it serves to advance their respective interests. The forces of realpolitik and the need to appease domestic constituencies will ensure that any substantive change to the relationship is narrowly confined and publicly concealed. This much was made clear by Saudi Foreign Minister, Adel al-Jubeir, who declared in April that “there will be no direct relationship between the Kingdom and Israel”. As such, consultation will likely continue in the background, or through tacit military concurrence as in Syria.

Egypt will continue to act as a mediatory force in this trilateral relationship, if necessary, but Cairo will direct greater attention towards domestic challenges rather than towards Saudi Arabia’s regional aspirations. The strategic intent of the next US administration will also influence this dynamic, yet to what extent remains to be seen. Meanwhile, two uninhabited islands in the Red Sea will quietly continue to play their part in guiding, and occasionally catalysing, regional relations.

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