Israel, the U.S., and the region after the Iran MoU: What next
The real meaning of the 14-point Islamabad Memorandum of Understanding will largely be determined by what happens in the 60 days (or perhaps much, much longer) of negotiations in which the details will be fleshed out (or will war be resumed?)
By most metrics, comparing this two-and-a-bit page MoU to the 159-page (including annexes) JCPOA agreement of 2015 is meaningless. There are strong tactical reasons for bigging up the deal as being good for the U.S.—most importantly, it is the best alternative after the U.S. and Israel initiated military action 110 days ago.
Four war goals were, at various points, declared by Israel’s leadership and, mostly endorsed by the U.S. President or those around him: (i) more definitive closure against any Iranian nuclear weapons program than was achieved in the 2015 JCPOA; (ii) a final end to any Iranian missile threat; (iii) no more Iranian support to its so-called regional “proxies”; and finally, (iv) regime change/collapse.
Recently, President Trump seemed to add an additional condition—the expansion of the Abraham Accords normalization of regional states with Israel to add Saudi Arabia, Pakistan, Qatar, Kuwait (Trump also referenced countries already in formal diplomatic relations with Israel).
In simple terms, none of these goals have been achieved and the 14-point MoU addresses some of these in a realistic rather than delusionally maximalist way. Only the two issues created by the war itself are resolved by the MoU going into effect—namely ending the war and reopening the Strait of Hormuz.
Little surprise then that the deal is being pilloried across the Israeli political spectrum and commentariat as a resounding failure and fiasco.
It has been clear for some time that Trump was looking for a way out of the mess that Netanyahu initiated by banking on the president’s poor judgment and on a hollowed-out U.S. governmental decision-making system. Following 39 days of active American-Israeli warfare, and bombastic claims of overwhelming victory, it became sufficiently clear that the war plans had tanked, and that the U.S. was heading for strategic defeat. A largely functioning, albeit inchoate, ceasefire was pursued. That continued for 71 days as realism slowly coursed its way through the veins of U.S. decision-making until the MoU was electronically signed on June 18th.
The next phase, 60 days (or more) of negotiations will be buffeted by uncertainty—Trump will no doubt embellish his attempt at a victory narrative, some of which Netanyahu will be forced to swing behind, but the Israel premier no doubt has schemes up his sleeve.
The decades old Israeli assumption, now in tatters, was that if you pull the U.S. into a war then defeat, capitulation or collapse of Iran would be inevitable. Israel and the U.S., in their hubris, never considered that Iran would be capable of offering yet another example of a lesson the West stubbornly refuses to learn—the possibility of being undone by the advantages of an asymmetric strategy predicated on outwitting an arrogant adversary, strategic anticipation, and thorough preparation.
That is not to make light of the impact on Iran. Even given its experience of sanctions and running a resilient economy, Iran will have to recover from skyrocketing inflation, with several food staples doubling or tripling in price since the start of the war; economic contraction of a predicted further 6% of GDP for the coming year, and the massive loss of jobs that comes with that; and the destruction of critical energy and other infrastructure. It also lost a significant cohort of its leadership.
The U.S. is naturally better positioned to absorb economic costs of war, although those are not trifling either, with Moody’s predicting a war cost to America of $132 billion. A more telling impact may be the very significant depletion in stocks of key weaponry, and of exposing so much of its current war-making modalities and tech, as well as the U.S. inability to impose its will on a country bearing the burden of decades of U.S. sanctions, and demonstrable American indifference to the interests of its supposed close allies in the region and beyond. The reputational hit will have a long tail indeed.
Perhaps the largest question looming is whether the U.S. will now make a definitive break with decades of economic and threatened military pressure, and a regime change orientation, towards Iran. Trump is acknowledging that the U.S. has exaggerated in its weaponisation of the Treasury department in how it can take the financial assets of other countries and that Iran will not unilaterally divest itself of the ability to be secure (the U.S. apparently dropping its missile demands vis-à-vis Iran). But it is unclear whether the U.S. system can internalise the implications of these realisations, nor should one prematurely write off Israeli influence. A resumption of war cannot be discounted and Trump continues to issue threats.
In the meantime, the U.S. may simply focus on bullying Iran where that is most easily accomplished, taking out its war failure by embittering the World Cup experience and preparations of Iran’s football team.
The Israel-U.S. rupture
President Trump has over the last days unloaded at the Israeli Prime Minister in what are probably unprecedented ways—then again, there is little about the Trump second administration that is not unprecedented. Part of this should be understood as standard Trumpian MO of diverting attention from his own failures and evading responsibility. After all, no other president fell for Israel’s multi-decade effort of best-case-scenarioing what a U.S. strike on Iran could achieve. Trump, no less than Netanyahu, owns this.
While Trump is not directly blaming Netanyahu for the failures of the war (he can neither admit to having been duped nor having failed) he is sending the signal over who is to blame. And he is (correctly) relying on the outrage in the pro-Israel echo chamber to do the rest of the work in drilling home that message—inadvertently proving that Israel/the lobby are to blame.
That echo chamber is in uncharted waters when it comes to the extent of the meltdown, the flailing, and the self-harm that they continue to indulge in. Having aligned overwhelmingly with the Israel First wing of MAGA, Trump has pulled the pendulum significantly in the opposite direction—now currying favour with the America First faction.
For starters, Trump pushed Netanyahu to desist from bombing Beirut on June 1st. More significantly, the administration apparently and belatedly realised that making Israel part of the negotiations guarantees no deal. The prospect has tantalisingly come into view of a U.S.-Iran deal that might reflect American interests rather than those of Israel’s leadership.
It should not go unnoticed that Netanyahu secured seven in-person meetings with Trump in the first 13 months of this second term. Subsequently, in the four months of fighting a war together, there have been plenty of phone calls but zero face-to-face encounters.
No doubt, Trump has been distancing himself. The praise he heaped on other regional leaders rubbed salt in that wound. Iran can notch up another success in having pursued a wartime strategy that intensified and deepened this U.S.-Israel fissure. It played into an already existing and quite dramatic shift in U.S. public opinion vis-à-vis Israel that is now traversing party lines and is most pronounced in younger generations. Given the degree of Israeli dependence on the U.S., this could prove to be the most consequential fallout from this made-in-Israel war.
Can Israel contain the rupture?
Donald J. Trump is not the first American President to let it be known that he is frustrated with an Israeli premier and to use expletives in so doing. The style may be unique, but the substance may end up being standard fare. In other words, Israel is called to heel briefly, but the U.S. soon returns to form in doing its bidding and giving it a free hand.
Make no mistake, Israel, its echo chamber and lobby are not about to roll over—they know how to bounce back and play the long game, and the tools at their disposal remain formidable. It can be simultaneously true that the U.S. both forces this deal on Israel and pivots to demonstrating that the bond is still strong and acts as if the U.S. ‘owes’ Israel.
The Israel lobby’s deployment of its congressional network, supportive media (now strengthened by the ultra-Zionist Ellison family purchase of Warner Bros. and Paramount Global) and the ability to deploy staggering sums in campaign finance (especially after the Citizens United ruling) in an election year is still not something to be sniffed at.
While the U.S. does have the leverage to impose outcomes on Israel, the question has always been whether it is ready to deploy that leverage and in a sustained fashion. Even in the current dynamic, will the U.S. enforce on Israel the clause it has signed in the MoU in respect to the territorial integrity and sovereignty of Lebanon, or will it allow Israel to continue to occupy part of that country?
While the reference to Syria managing affairs in Lebanon could be read as a rebuke to Netanyahu, at the same time it demonstrates how divorced from regional realities the U.S. administration still is.
Israel will use the 60 days (and possibly longer) to reintroduce its positions into the negotiation equation and, from its perspective, for hostilities to be resumed. It will try to create a situation where the U.S. remains maximally deployed in the region and does not draw down its previous basing arrangements. Netanyahu will emphasise that Trump now needs to do something for him, for Israel—whether in reintroducing Abraham Accords expansion into the mix, or on the Lebanon front, or giving Israel an even freer hand in Gaza and the West Bank, or perhaps for Trump to personally embrace Netanyahu in his re-election campaign. None of that should be ruled out.
To put things in perspective, President Obama was reviled and relentlessly attacked by the pro-Israel lobby. In March 2015, Netanyahu even went as far as addressing a joint session of Congress to argue against the President’s Iran JCPOA deal. And yet, the Obama administration, just a year later, signed a 10-year memorandum of military support worth $38 billion in total—the largest aid package in U.S. history.
But this could also mark a qualitatively different phase in relations, especially given the U.S. domestic political dynamics and perhaps more importantly what the world has already witnessed in the U.S.-Israeli failures in this war. The dressing down that Israel has received from the President and Vice President will resonate far beyond the immediate news cycle.
Israel’s next moves
Israel’s leadership has not yet found its groove following confirmation of the MoU and its contents. Political and media commentary is awash with shock and disappointment, anointing the entire war a fiasco, with frequent denouncements of the American President. Netanyahu himself offered a victory narrative version 1.0 centred around this war having saved Israel from annihilation. He will have to balance out an endorsement of Trump’s victory claims while seeking to simultaneously distance himself and set out Israel’s terms.
The atmosphere is all the more febrile given that elections are just a few short months away—due to be held in September or October. Netanyahu trails in the polls and is doubling down on presenting himself as the necessary and experienced leader for what he continues to define as a permanent wartime struggle for Israel’s very survival. There is something jarring, even in an electoral campaign, for a leader to tell his people that they were inches away from mass death and total destruction when that leader has been at the helm for more than 16 of the last 18 years (the claim—which attempts to snatch victory from the jaws of defeat—is also patently untrue in exaggerating the threat Iran or any other actor posed to Israel).
But Netanyahu is accurately reflecting and endlessly feeding the contemporary Israeli psychological disposition of constant trauma (often manufactured, sometimes real as on October 7th). In other words, the pressure to reject diplomacy and intensify military activity comes not just from Netanyahu—but also from most of the Zionist parties due to challenge him in the forthcoming election, the so-called “opposition”.
As Noa Landau notes in Haaretz, the Israeli opposition is “outflanking him [Bibi] from the right …Their central argument doesn’t confront military objectives and their limitations…The Israeli opposition doesn’t want to encourage this realistic discussion; it prefers to peddle the idea that it has a better magic solution.” Netanyahu’s main opponent, Naftali Bennett, claims he is the one who will deliver regime change in Iran while also threatening that Türkiye will be next in Israel’s crosshairs after Iran.
But the immediate challenge facing Netanyahu is how he can transition from the meltdown vis-a-vis the U.S. to getting his hands back on the steering wheel driving U.S. policy. The first test case is, of course, Lebanon, where Israel sought to intensify its attacks following the signing of the U.S.-Iran MoU, and which momentarily delayed and threatened this week’s Bürgenstock talks.
Even as it agreed a new truce with Hezbollah on June 19th, Israel continues to insist that it will maintain a military occupation in South Lebanon—in violation of Lebanese sovereignty. As long as that presence remains, there will be resistance, and that will serve as a justification for periodic Israeli escalations (as just happened when four IDF soldiers were killed in between large Israeli strikes, both prior and subsequent to those losses, with over 100 Lebanese fatalities). The current tentative truce will clearly not be the final word on that front. Iran may also see advantages in maintaining a Lebanon situation of episodic confrontation, especially if Israel’s disproportionate actions can be used to further fuel U.S.-Israel tensions.
But if the state of play in Gaza, since the so-called ceasefire was declared and the previous Lebanon “ceasefire” are anything to go by, then the U.S. is perfectly capable of defining a ceasefire as a state of affairs in which Israel maintains deadly daily military operations and occupation. However, in this instance, the issue is ending a war in which America is directly involved, and in which Iran has a say.
Netanyahu will work to convince the administration to hold to the separate U.S.-led direct track between Israel and the government of Lebanon where talks are due to resume on June 23rd, and in which Israel is trying to impose conditions designed to reignite conflict in Lebanon—whether that continues to be led by the Israeli military or by dragging the Lebanese government into a renewed civil war.
So, Lebanon is where this festival of Israel-U.S. name calling will be distilled down into the actual assertion of power and imposition of decisions (one way or the other). And of course none of this bodes well for the Palestinians—with Gaza still experiencing daily strikes and casualties, and Israel preventing the entry of much-needed relief, while the West Bank is under the most prolonged and relentless Israeli assault—settler and military—since 1967.
It doesn’t take a crystal ball to anticipate that Israel will take its frustration out on Palestinians and intensify the realization of its long-term draconian plans. Part of the Washington quid-pro-quo may be to create an even more enabling environment (true, if hard to imagine). Israel’s government intends to go into this election having implemented and paved the way to finalize its zero-sum agenda in the West Bank, East Jerusalem, and Gaza.
In theory at least, there is an alternative scenario: that Trump’s warnings and those of JD Vance for Israel to “wake up and smell the reality of the situation that country is in” act as a wake-up call. That Israel reconsiders its maximalist (overreach) Greater Israel project of regional domination. That is sufficiently counterintuitive to Israel’s inability to display pragmatism that its chances, unfortunately, are vanishingly small.
End thoughts
There is an awful lot to unpack in translating the MoU into a sustainable agreement—from Lebanon’s sovereignty to what constitutes proximity in the removal of American forces, to the future administration of the Straits of Hormuz, and of course, the arrangements regarding Iran’s nuclear program, and the removal of sanctions/unfreezing of assets.
Not all of those points will need to be thrashed out if the return of war is to be prevented. But two military confrontations in the space of a year, combined with the reality of Israel’s hawkish maximalism, and the resurgent neoconservative camp in the U.S., mean that a return to war cannot be ruled out.
Beyond that, the repercussions of this conflict will play out over a long horizon, and some of that will be unpredictable and extends far beyond U.S.-Israel dynamics.
The region has witnessed in very palpable terms the shortcomings of its security relationship with the U.S. While it was Iran that launched missiles into Gulf states, it was the U.S., at Israel’s urging, that started this war, ignoring the counsel of its Gulf allies, listening only to Israeli entreaties. A Saudi friend shared a local proverb with me: “better wise enemies than crazy friends”.
States in the region will look at how to manage their relations with Iran, including possibly leaning into more economic integration as a security measure—investments give a certain leverage. While they will continue close relationship, including on the security and arms procurement front with the U.S., expect simultaneously a far more significant hedging to take place in the coming years.
Part of that will be in expanding other geopolitical relations, including those with China and arms purchases from places such as South Korea, and Europe if it can step up to be part of that mix. But there will also be a much more intense exploration of cooperation among regional states.
One core question will be whether a meaningful third bloc emerges in the region, counterbalancing the Israel axis (with UAE and others) and the Iran axis. The closer ties between Saudi, Türkiye, Egypt and Pakistan (who met at the Foreign Minister level on a fourth occasion on June 21st), as well as Qatar, are a trend to watch. Any emerging bloc will have to address how it contains Israel’s project of domination, radicalization, and destabilization.
Other issues likely to be on the agenda include: how the future of U.S. military bases is addressed, and what happens to those that have been largely destroyed during this war; whether Israel’s nuclear weapons become an issue, and whether proliferation questions extend beyond Iran; the routes where one sees the building of the future nodes of transportation and connectivity, including energy pipelines; and even how resonant Iran’s narrative of successful resistance becomes.
When JD said of Israel that “you’re a country of 9 million people, you just can’t kill your way out of solving every single national security problem that you have” he was speaking to a reality that politicians from across the Zionist political spectrum, pro- and anti-Bibi camps alike, refuse to acknowledge.
The Trump administration has not applied that to the Palestinian question and is hardwired not to do so. That, though, remains the crux—an Israel committed to a zero-sum project against the Palestinians is by definition an Israel committed to a hostile posture in the region and to hard-power domination. It is a project that has just been exposed, in very palpable terms, as unrealizable.
How many more setbacks, over how extended a period of time, and with what level of fallout for Israel and its neighbourhood, will it take for Israel and its public to change course?