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U.S.-Israel Relations:
A Special Alliance

by Mitchell Bard


U.S.-Israel Relations: Table of Contents | Economic Cooperation | Strategic Collaboration


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When Benjamin Netanyahu was elected Prime Minister of Israel in 1996, many in the media predicted U.S.-Israel relations would deteriorate. After all, President Bill Clinton had done everything he could, short of making a joint campaign appearance, to aid in the reelection of Shimon Peres. Moreover, Netanyahu's platform with regard to the peace process was at odds with American policy. Within weeks of Netanyahu's victory, however, it became clear that while difference might exist on policy matters, the overall relationship was as close as ever. In fact, among other things, Netanyahu was invited to address a joint session of Congress. If anything, in the succeeding months, the alliance has grown still closer.

President Obama and Prime Minister Netanyahu on October 1, 2014.  Credit: Olivier Douliery / Pool via CNP

The fact that Netanyahu's election did not undermine U.S.-Israel ties is a reflection of the alliance's strength and the special nature of the relationship, which has evolved over the last half century into a web of military, economic, academic, bureaucratic and personal connections.

Strategic Cooperation

Up until the mid-1960s, State Department and Pentagon officials argued that Israel did not need American arms because it was strong enough to defend itself (as evidenced by the Suez campaign) and had access to arms elsewhere. Officials also worried that the Arabs would be alienated and provoked to ask the Soviets and Chinese for weapons that would stimulate a Middle East arms race.

U.S. policy first shifted with John Kennedy's 1962 sale of HAWK antiaircraft missiles to Israel, which was made over the objection of the State Department, but only after Egypt obtained long-range bombers from the Soviets. Lyndon Johnson subsequently provided Israel with tanks and aircraft, but these sales were balanced by transfers to Arab countries. U.S. policy was to avoid providing one state in the area a military advantage over the other. This changed in 1968 when Johnson announced the sale of Phantom jets to Israel. That sale established the United States as Israel's principal arms supplier. It also marked the beginning of the U.S. policy to give Israel a qualitative military edge over its neighbors.

Johnson's decision was based on Israel's perceived needs (and domestic political considerations) rather than its potential contribution to U.S. security interests. Up to this point, Israel was not viewed as having any role to play in Western defense, largely because it did not have the military might to contribute to the policy of containment. This perception began to change in 1970 when the United States asked Israel for help in bolstering King Hussein's regime. By the early 1970s, it became clear that no Arab state could or would contribute to Western defense in the Middle East. The Baghdad Pact had long before expired and the regimes friendly to the United States were weak reeds in the region compared to the anti-Western forces in Egypt, Syria and Iraq. Even after Egypt's reorientation, following the signing of the peace treaty with Israel, the United States could not count on any Arab government for military assistance.

The Carter Administration began to implement a form of strategic cooperation (it was not referred to as such) by making Israel eligible to sell military equipment to the United States and engaging in limited joint exercises. The relationship could have stagnated at this point, especially after the blow up between Ronald Reagan and Menachem Begin over the 1981 sale of AWACS to Saudi Arabia, but Reagan was the first President to see Israel as a potential contributor to the Cold War.

Prior to his election, Reagan had written: "Only by full appreciation of the critical role the State of Israel plays in our strategic calculus can we build the foundation for thwarting Moscow's designs on territories and resources vital to our security and our national well-being."

The Israelis wisely played up their capability to deter the Soviet Union, while the Arab states refused to join the "strategic consensus" that Alexander Haig tried to create to oppose Soviet expansionism in the region. The Arabs insisted the greatest threat to them was not Communism, but Zionism. The Israelis never considered the Soviets their principal threat either, but were prepared to say otherwise to win Reagan's favor.

They began to reap the benefits of this approach on November 31, 1981, when the two countries signed a Memorandum of Understanding (MOU) termed "strategic cooperation." The agreement was diluted by opposition from the Pentagon and State Department and did not provide for joint exercises or a regular means of cooperation. Worse, it was used as a stick to beat Israel with a month later when the MOU was suspended because of American dissatisfaction with Israel's decision to annex the Golan Heights. Still, for the first time, Israel was formally recognized as a strategic ally.

Two years later, a new MOU was signed that created the Joint Political-Military Group (JPMG) and a group to oversee security assistance, the Joint Security Assistance Planning Group (JSAP). The JPMG was originally designed to discuss means of countering Soviet threats, but it almost immediately focused more on bilateral concerns. The JSAP was formed in response to Israel's economic crisis in the mid-1980s and focused primarily on Israel's military procurement needs.

In 1987, Congress designated Israel as a major non-NATO ally, which allowed Israeli industries to compete equally with NATO countries and other close U.S. allies for contracts to produce a significant number of defense items. Israel also began to receive $3 billion in grant economic and military assistance. The following year, a new MOU was signed encompassing all prior agreements. By the end of Reagan's term, the U.S. had prepositioned equipment in Israel, regularly held joint training exercises, began co-development of the Arrow Anti-Tactical Ballistic Missile and was engaged in a host of other cooperative military endeavors.

Today, these strategic ties are stronger than ever. To cite a few examples:

  • In early 1997, Israel linked up to the U.S. missile warning satellite system, which will provide Israel with real-time warning if a missile is launched against it.
  • Joint military exercises are regularly held. In November 1996, U.S. Marines held training exercises in the Negev.
  • A Joint Anti-Terrorism Working Group was created.
  • A hotline was established between the Pentagon and the Israeli Defense Ministry.
  • The United States continues to fund the research and development of Israeli weapons systems and military equipment including the Arrow missile, the Nautilus Tactical High Energy Laser, the Barak ship self-defense missile system, Bradley Reactive Armor Tiles, Crash-Attenuating Seats, the Have-Nap missile and Unmanned Aerial Vehicles.

The strategic cooperation agreements established Israel as a de facto ally of the United States, institutionalized military to military contacts, sent a message to the Arabs that America was not afraid to risk upsetting them and shifted at least part of the focus of relations with Israel from Congress to the Executive Branch.

Towards the end of 2014 the Israeli-American strategic partnership suffered a blow delivered by Israeli Defense Minister Moshe Ya'alon.  The Jerusalem Post reported in January 2014 that during private conversations the Defense Minister reffered to US Secretary of State John Kerry as "obsessive and messianic" in reference to his pursuit of a deal between the Israelis and Palestinians, and said that "The only thing that can ‘save’ us is for John Kerry to win his Nobel Prize and leave us alone".  These remarks garnered backlash from both Israeli and American officials, with multiple Israeli officials calling for Ya'alon to be fired and claiming that he is doing damage to the US-Israel relationship.  In October 2014 during a visit to the US, Moshe Ya'alon was very publicly denied meetings with both Secretary of State John Kerry and Vice President Joe Biden due to these remarks.  In the following days an Obama administration official referred to Netanyahu as a "chickens**t" and a seperate administration insider called the Israeli Prime Minister a coward when it comes to Iran.  Critics of Netanyahu have claimed that this is evidence of an eroding and damaged relationship with Israel's greatest ally caused by Netanyahu's policies. 

Economic Ties

To enhance Israeli security, the Nixon Administration began what became an unprecedented foreign assistance program. Between 1946 and 1971, the U.S. provided Israel with an average of about $60 million a year, a total of $1.5 billion. By comparison, the Arab states received nearly three times as much aid, $4.4 billion, or $170 million per year. Of the total, Israel received only $162 million in military aid, all in the form of loans as credit sales. The bulk of the economic aid was also loaned to Israel. Since 1974, however, Israel has received nearly $50 billion in aid. Israel has annually received $1.8 billion in all grant military assistance (roughly 80 percent is spent in the U.S.) and $1.2 billion in all grant economic aid (most of which goes for the repayment of past loans) since fiscal year 1987. A variety of other smaller assistance-related programs actually push the total Israel receives even higher. Israel also received $3 billion in special assistance as part of the Camp David agreements ($2.2 billion in high interest loans), $1.5 billion in emergency economic assistance to stabilize the Israeli economy in 1985-86 and $10 billion in loan guarantees (spread over five years) in 1992.

Israel received $3 billion again in fiscal 1997 and also received $80 million for several years to fund refugee resettlement programs. In 1996, Congress also provided $100 million in anti-terrorism assistance. Israel's unique stature is evident in the fact that its package represents nearly 25 percent of the entire assistance budget.

The economic relationship between the two countries grew more interdependent in 1984 when Secretary of State George Shultz suggested the creation of an American-Israeli Joint Economic Development Group (JEDG) to work continuously on Israel's economic challenges. The JEDG played a pivotal role in the formulation of Israel's ambitious stabilization plan in 1984. At the time, Israel was in serious economic distress. Years of shouldering the enormous defense burden imposed by Arab hostility, and the accumulated result of dependence on imported raw materials and fuel for Israel's industry -- to say nothing of the continuing cost of absorbing waves of destitute immigrants and providing them with the full range of social services -- had led to extensive borrowing and a huge foreign debt. Foreign reserves had plummeted, unemployment was at an 18-year high and inflation was raging at 450 percent per year and rising.

Israel requested economic assistance, but Shultz insisted on economic reforms that included budget cuts, tighter control of the money supply and devaluation of the shekel. When Israel took these and other steps, Reagan approved a $1.5 billion emergency aid program, which helped save the Israeli economy from collapse and to stimulate the recovery that reduced inflation from triple digits to the low double digits and laid the groundwork for Israel to have one of the world's fastest growth rates just a decade later.

It is not unusual for the United States to instruct other nations as to how to stabilize their economies (witness the recent case of Mexico); however, this case was distinctive because the U.S. Treasury, rather than the World Bank or IMF provided financial assistance. It was also remarkable because the disbursement (along with $3 billion in non-emergency economic and military aid) provoked no real opposition (the Senate vote was 75-19, the House vote was part of a continuing resolution). Finally, the dialogue with Israel that began at that time, and continues to the present on issues such as privatization (in 1996 agreements were reached to establish joint frameworks for assessing means of implementing the rapid privatization of the Israeli economy and expanding the capital market), represents perhaps the only example of a country willingly cooperating with the United States on the development of its macroeconomic policy.

At the same time the United States was "bailing out" Israel's economy, Reagan decided to sign America's first free trade agreement with Israel. This unprecedented treaty opened up the entire U.S. market to Israel and served as the model for later agreements with Canada and Mexico. By contrast to the later treaties, however, the FTA met with no political opposition. In fact, the Senate vote on the agreement was unanimous. Like most trade agreements, the FTA has generated its share of disputes, on both sides, but it has also clearly achieved the intended purpose of increasing the volume of trade from about $4.7 billion in 1985 to more than $11 in 1995, with U.S. exports to Israel doubling in the last decade. In 1996, the FTA was amended to permit the President to reduce tariffs on goods and services from Gaza and the West Bank.

In November 1996, the United States signed a new agreement with Israel to specifically boost agricultural trade. The U.S. Department of Agriculture estimates that by creating greater Israeli access to American agricultural products, U.S. exports could exceed $800 million by the year 2000.

In addition to promoting trade, the United States has created institutions to stimulate joint R&D. The Binational Industrial Research and Development Foundation (BIRD) was established in 1977. Both countries provided equal contributions to create a $110 million endowment that funds joint U.S.-Israel teams in the development and subsequent commercialization of innovative, nondefense technological products from which both the Israeli and American company can expect to derive benefits commensurate with the investments and risks. Most grant recipients are small businesses involved with software, instrumentation, communications, medical devices and semiconductors. Since its inception, BIRD has funded more than 400 joint high-tech R&D projects. Products developed from these ventures have generated sales of more than $4.5 billion, tax revenues of more than $200 million in the United States alone and created an estimated 20,000 American jobs.

To encourage economic cooperation as a pillar of the peace process, the United States, Jordan and Israel created TRIDE (Trilateral Industrial Development) in 1996. Modeled after BIRD, TRIDE will support joint venture projects by private sector firms from the three countries.

A third institution created to stimulate cooperation is the U.S.-Israel Science & Technology Commission (USISTC). The USISTC was established in 1993 with the promise of $15 million from each government over three years. Its mission is to encourage high-tech industries in both countries to engage in joint projects; foster scientific exchanges between universities and research institutions; promote development of agricultural and environmental technologies and assist in the adaptation of military technology to civilian production. The Commission has task forces on food standards harmonization; commercialization of military technologies; cosmetic standards; energy and environmental standards harmonization; legal, patent and intellectual property rights; telemedicine and information technology.

One of the early results of the Commission's work has been progress toward harmonization of standards for testing drugs and medical devices, which led to the Food and Drug Administration's announcement last year that it will recognize some Israeli tests of Israeli-developed drugs and medical equipment. The USISTC has also funded six high-risk technology projects between American and Israeli companies.

Academic Connections

American and Israeli scholars have had long and fruitful contacts. Many U.S. colleges have student and faculty exchange programs with Israeli institutions and several have joint degree programs. To give an example of one of the more unique programs, The College Fund/UNCF (formerly the United Negro College Fund), in cooperation with the World Jewish Congress, World Zionist Organization and the Israeli Office of Academic Affairs operates the UNCF/Israel Exchange Program, which includes the Wilberforce Summer Program. The program begins with a two-day orientation at Wilberforce University in Ohio. UNCF students then spend one month working on Kibbutz Ramot Menshae (e.g., laying down irrigation systems and manufacturing water meters), one month teaching English to disadvantaged Israelis at a Kefiada (summer camp) in Holon and the last month studying at Hebrew University.

In the 1970's, two unique foundations were created to fund joint research. In 1972, a relatively unknown agreement was reached that laid the groundwork for a vast array of nonstrategic relationships between Israelis and Americans. That year the United States and Israel created the Binational Science Foundation (BSF) to promote research cooperation between scientists in the two countries. Each government initially contributed $30 million and, in 1984, added another $20 million each to create a $100 million endowment used to fund projects. Since then, BSF has awarded more than 2,000 grants, involving approximately 2,000 scientists from more than 300 American research institutions.

The creation of BSF set a precedent for the establishment of other foundations. In 1977, the aforementioned Binational Industrial Research and Development Foundation (BIRD) was established for private sector R&D. A third foundation, the Binational Agricultural Research and Development Fund (BARD), was created in 1978 with equal contributions of $55 million by the United States and Israel. Since its inception, BARD has funded 725 projects that have led to new technologies in drip irrigation, pesticides, fish farming, livestock, poultry, disease control and farm equipment. In 1995, projects were funded at 31 U.S. institutions in 21 states.

These foundations were created with little fanfare and continue to operate independent of economic or political pressures. In the last two and a half decades, they have played an important role in creating networks between American and Israeli researchers in academia, government and the private sector. Of course, collaboration also continues outside the framework of these institutions.

Another unique institution is the International Arid Lands Consortium (IALC), an independent nonprofit organization formed to explore the problems and solutions of arid and semiarid regions. The Consortium consists of the universities of Arizona, Illinois, New Mexico State, South Dakota and Texas A&I, along with the U.S. Forest Service and the Jewish National Fund. The IALC is now beginning to expand its reach to include representatives from Egypt and Jordan.

Shared Value Initiatives

The United States signed a variety of cooperative agreement with Israel dating back to the 1950s; however, Ronald Reagan dramatically expanded the number of areas for possible joint activities. Just as he institutionalized military to military relations through formal agreements and mutually beneficial projects, so too did he begin to make bureaucracy to bureaucracy relations routine. During the Reagan Administration, agreements were signed or renewed between nearly every U.S. government agency, from NASA to EPA to HHS and their Israeli counterparts. In 1987, the Jewish National Fund signed the first of several MOUs with the U.S. Forest Service for cooperation in firefighting, conservation and land management. In 1996, the Department of Energy renewed its agreement with its counterpart and a new MOU was signed between the Security Exchange Commission and Israel's Securities Authority for cooperation in the enforcement of each other's security regulations. The FBI also announced plans to open an office in Tel Aviv to facilitate security cooperation.

Though many of these MOUs are little more than pieces of paper, they symbolize an interest in cooperation that is broader and deeper than the United States has with any other nation. The Shared Value Initiatives undertaken through these agreements also help tangibly reinforce the values the countries do share in areas like protecting the environment, providing education and promoting health.

States Build Bridges to Israel

Americans and Israelis have always had relationships at the state and local level, but a milestone in formalizing these contacts occurred in 1984 when the Texas Israel Exchange was created to promote mutually beneficial projects between the Texas Department of Agriculture and Israel's Ministry of Agriculture. Since then, at least 19 other states have signed agreements with Israel to increase cooperation in trade, tourism, research, culture and other activities of particular interest to individual states. It has now become routine for governors to lead delegations of business leaders, educators and cultural affairs officials to Israel and for state agencies and institutions to initiate joint projects. To give just one example, North Carolina signed an agreement for broad cooperation with Israel in 1993. In just three years, a number of projects have been initiated, including the creation of a North Carolina-Israel Development Center in Rehovot and North Carolina's Research Triangle Park; the establishment of an Israeli center for people with autism based on a North Carolina model, an art exchange that will result in the largest exhibition of Israeli visual arts ever displayed outside Israel and the adoption by the State's third largest school district of a peer tutoring program developed by Hebrew University.

The financial benefits to the states from bilateral agreements can also be substantial considering that 15 states exported at least $100 million to Israel in 1995, and four exported more than $500 million, with New York leading the way with $1.1 billion.

A Wellspring of Sympathy

The gradual evolution of the relationship from friendship to alliance could not have been achieved without the support of the American public, the majority of which consistently sympathized with Israel. Americans see much of themselves in the Zionist struggle. Like the early American pioneers, the Jews who originally settled the land had a commitment to manual labor to build the nation. Like newcomers to America, immigrants to Israel have tried to make better lives for themselves and their children. Americans' affinity for Israelis also stems from our shared Judeo-Christian heritage.

Public sympathy toward Israel can be influenced by Presidential attitudes and events, as we saw during the Lebanon war when support dipped to its all-time low. The public also has shown less love for Israelis than distaste for the Arabs. It was not until the late 1980s and early 1990s that Americans began to distinguish between Arab countries and, in a few instances, to feel more positively about Arab countries than Israel. Even so, the rise of Islamic fundamentalism, and dramatic terrorist incidents attributed to Arabs, have perpetuated negative stereotypes that have helped insure Israelis are viewed in a relatively favorable light.

Also, unlike America's Arab "allies," Israel never attacked U.S. interests. It has periodically acted contrary to them, as in Suez and Lebanon, but these anomalies are a far cry from Arab states' routine criticism of U.S. policy; often active support for America's enemies, such as the Soviet Union, Iran, Iraq and Libya; and direct opposition, as in the refusal to allow U.S. troops to be stationed in their countries. One quantitative index of the relative support of Israel and the Arabs for U.S. policy is the consistency of voting with the United States at the U.N. Israel has annually been at or near the top of those countries voting most often with the U.S., while the Arab states, including friendly nations, have always been at the bottom.

In addition, today, the Israeli lobby is indeed influential. Thirty years ago, the organization now considered the most powerful foreign policy lobby in Washington, the American-Israel Public Affairs Committee (AIPAC), was a one man operation. Today, it has more than 100 employees with seven regional offices and a budget of approximately $13 million. Though its influence is limited primarily to issues where Congress has a say, in particular, economic matters, the organization also serves as a watchdog to deter anti-Israel policies from being adopted.

Jews also occupy more positions of influence today than ever before. For example, in the 104th Congress Jewish members comprised 9 percent of the Senate and nearly 6 percent of the House. Bill Clinton nominated two Supreme Court Justices, both Jewish. In his first term, he had two Jewish Cabinet members and dozens of Jews held other key Administration posts. Bastions of bureaucratic opposition, and sometimes outright anti-Semitism, like the CIA and State Department now employ Jews at the highest levels. For the last eight years, a Jew (Dennis Ross) has been America's principal Mideast negotiator and, for the first time, the U.S. Ambassador to Israel is Jewish. Clinton's new National Security Adviser, Sandy Berger, is also Jewish.

The evolution of the relationship has also been influenced by the ideologies of the Presidents, or more accurately, how consistent particular policies were with their ideologies and objectives. In those cases where a pro-Israel policy was inconsistent, even the sympathetic presidents became opponents. This was the case, for example, when Harry Truman imposed an arms embargo on Palestine. In that case he was convinced U.S. weapons would further undermine the stability of the region and hinder the prospects for peace.

The two Presidents considered anti-Israel, Dwight Eisenhower and George Bush, both saw the Jewish state as just another country. Bush's Secretary of State, James Baker, viewed the Arab-Israeli conflict as no different from a management-labor dispute, so he saw no need to be especially sensitive to Israel's concerns. Bush demonstrated that a President openly critical of Israel could affect the quality of the relationship. Bush also set the negative precedent of openly interfering in an Israeli election, making no secret of his contempt for Yitzhak Shamir, and desire to see Yitzhak Rabin elected Prime Minister. Still, under Bush, aid to Israel was maintained, strategic cooperation enhanced and a $10 billion loan guarantee package approved (albeit with punitive deductions for the construction of settlements).

Presidents Lyndon Johnson and Jimmy Carter felt more of a religious/moral attachment to Israel. Johnson, for example, spoke about how "the Bible stories are woven into my childhood memories as the gallant struggle of modern Jews to be free of persecution is also woven into our souls." And Carter wrote in his memoirs that he "believed very deeply that the Jews who had survived the Holocaust deserved their own nation, and that they had a right to live in peace among their neighbors. I considered this homeland for the Jews to be compatible with the teaching of the Bible, hence ordained by God. These moral and religious beliefs made my commitment to the security of Israel unshakable."

Truman and Reagan felt gut-level, emotional sympathy toward Israel, which was translated into landmark decisions that established and strengthened the relationship. Bill Clinton falls into a similar category, and is now considered by many people the most pro-Israel President in history. Nevertheless, he followed Bush's precedent of interfering in Israeli politics by trying to help the reelection effort of Shimon Peres. Clinton's pro-Israel reputation has been largely won by what he has not done, that is, publicly criticize Israel or take punitive measures against it. For most of his first term, the Israeli policy was far more compatible with U.S. policy than in the past, which insured a low-level of conflict, but even in those few cases where disagreements arose, Clinton essentially looked the other way. In terms of new initiatives, Clinton did little beyond create the U.S.-Israel Science & Technology Commission, a comparatively tiny program for cooperation in high technology announced early in his presidency that took most of his first term to get off the ground. By all accounts, however, the U.S.-Israel relationship is stronger today than ever before.

Conclusion

When we look at the evolution of the alliance, and the current, broad institutionalization of friendship, it is easier to understand why an Israeli election that brought to power a man whose policies clashed with the President's would have so little impact on the relationship. The truth is the differences between the present administrations in Israel and the United States are relatively narrow, primarily disagreements over the means to the same end. In the worst case, a future American administration may seek to pressure the Israelis and might even reduce the level of cooperation (e.g., suspend arms deliveries, reduce strategic cooperation), but the ties today are so broad and deep the alliance is unlikely to crack. Unlike the 1950s, no President can credibly threaten a cutoff of aid, since Congress would not support such action. Most economic, academic and professional relationships between the countries are immune to political vagaries. The further development of the relationship might be retarded, but the evolution cannot be reversed.

For Israel, the strength of the alliance provides security. Israelis know their ally will maintain its commitment and be limited in its ability to apply pressure to force them to take actions they oppose. The impact on the Arabs should be to dispel the persistent delusion that a wedge can be driven between the United States and Israel. Despite Israel's reliance on America, the state of the relationship today is such that U.S. influence on its ally is constrained. Still, no Prime Minister wants strained relations with Israel's closest friend and the world's most powerful nation, so it is likely Netanyahu will bend. He did so, for example, by accepting Clinton's invitation to meet Arafat in Washington and agreeing to accelerate talks on redeploying from Hebron.

For all the complexity of the alliance, the American position might have been summed up most succinctly by Lyndon Johnson. When Soviet Premier Aleksei Kosygin asked him why the United States supports Israel when there are 80 million Arabs and only 3 million Jews, the President replied simply, "Because it is right."


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