Israel-Gaza War: Assessing The Regional Fall-Out

BMI View: Israel ' s military actions against Gaza underscore its perceived need to respond forcefully to the more challenging geopolitical environment that has emerged in recent years. However, this risks a hardening of attitudes against Israel in Egypt, the regional heavy-weight nation. Meanwhile, Iran continues to loom as Israel ' s biggest security threat, with the risks of conflict likely to rise in 2013.

Israel ' s decision to launch ' Operation Pillar of Defence ' on November 14, 2012, for the stated purpose of protect ing its citizens from rockets fired by Palestinian mili tants in Gaza and to cripple Hamas ' military infrastructure , is reflective of the increasingly challenging geopolitical environment that the Jewish state is facing . Although Pillar of Defence is specifically focused on Gaza, the operation sends a strong signal that Israel is willing to use military force to defend its interests anywhere in the region at a time when its inaction against Iran ' s nuclear programme could be construed by some as a sign of weakness. This perceived need to demonstrate its assertiveness was also apparent in late October, when Israel apparently launched an airstrike on a weapons factory in Khartoum, Sudan ( see our online service, October 28, 2012, ' Implications Of Alleged Israeli Airstrike ' ). Below, we assess the implications of Pillar of Defence on the region, starting with the larger Palestinian territory in the West Bank.

West Bank's Palestinian Authority Facing Marginalisation

The Palestinians are divided into two non-contiguous territories, the West Bank and Gaza. The former is led by the Palestinian Authority (PA) and its president, Mahmoud Abbas, who is considered the most moderate and credible Palestinian leader by the Western-led international community. Gaza is controlled by the militant group Hamas, which won elections in 2006 and took over the territory in 2007. At the end of 2008, Israel invaded Gaza and waged a three-week military campaign to stop Palestinian rocket fire into Israel and prevent weapons flowing into Gaza - goals which are similar to those of the current military operation . Gaza has remained under an Israeli naval and Egyptian land blockade since 2007, although restrictions were eased somewhat from June 2010 after international pressure .

Going forward, there is a risk that Pillar of Defence will radicalise the Palestinians in the West Bank and marginalise the PA. President Abbas ' popularity has declined amid economic difficulties and perceptions that he is willing to give up the Palestinians ' long-standing demand for the right to return to land that is now in the State of Israel. Meanwhile, Israel is criticising Abbas for his proposal to upgrade the Palestinians ' status at the UN to non-member state on November 29, 2012. If he fails in this bid, Abbas risks being further discredited. For its part , Israel also needs to avoid fatally undermining Abbas, for a radicalisation of the West Bank would only serve to increase security risks to Israel.

Israel Facing More Challenging Geopolitical Environment

Israel has been facing a distinctly more hostile geopolitical environment since the Arab Spring of 2011 , and perhaps even before that ( see September 14, 2011, ' Israel's New Geopolitical Realities Increase Risks, But Also Yield Opportunities'). Essentially, the Arab Spring destabilised a long-standing status quo among its neighbours that provided a relatively high degree of stability.

Egypt becoming more assertive: Without doubt, the biggest change has been in Egypt, which elected Mohamed Morsi of the Islamist Muslim Brotherhood (MB) as its president in June 2012. Although Morsi has generally maintained the status quo, most notably Egypt's peace treaty with Israel which has been in place since 1979, he has adopted tougher rhetoric against Israel, and the Jewish state cannot be certain of his long-term intentions. Morsi himself faces a tremendous dilemma. On the one hand, as Egypt's first elected president and first Islamist leader, he must be seen to be responding to popular Egyptian sympathies for the Palestinians. On the other hand, Morsi is likely to be under tremendous pressure from the US not to support Hamas militarily or abrogate the peace treaty with Israel. This is because Egypt's economy is currently in a weakened state, and is thus more dependent than usual on Washington's US$1.5bn in annual economic assistance. The US is also a major decision-maker in the IMF, from which Egypt is currently seeking a US$4.5bn loan to ease pressure on its balance of payments.

If Egypt were to make a decisive break with Israel and fall out with the US, then these economic benefits could conceivably be cut off and Egypt could assume quasi-pariah status. This would greatly increase its risk profile, making it less attractive to investors and tourists. Thus, Morsi has to tread very carefully. Egypt is therefore pursuing a diplomatic solution to the Israel-Gaza conflict, which we believe is Cairo's safest course of action.

Jordanian King under pressure: Israel must also keep a close watch on neighbouring Jordan, which is the only other Arab state to have signed a peace treaty with it (in 1994). The pro-Western King Abdullah is facing growing pressure on a variety of fronts. The government's decision to raise fuel prices on November 13, 2012, to reduce the budget deficit triggered relatively large protests, which are increasingly criticising the King rather than just the cabinet. Meanwhile, the King has agreed in principle to curb his powers and enact political reforms so that parliament rather than the monarch will choose the prime minister. However, it is unclear how much power he will concede. Jordan is to hold parliamentary elections on January 23, 2013, but the opposition Muslim Brotherhood has threatened a boycott unless electoral reforms are carried out to reduce biases favourable to pro-establishment parties. Jordan has also received more than 100,000 refugees from the conflict in Syria. With the Kingdom potentially entering a turbulent period, it is less reliable as an Israeli partner.

Syrian civil war a mixed blessing for Israel: Syria has been an enemy of Israel for decades, and the weakening of the Assad regime has benefited Israel by disrupting the Iran-Syria-Hizbullah radical axis against the Jewish state. However, the Syrian civil war also poses risks for Israel. The Assad regime, although inimical to Israel, has been a known and manageable quantity for Israeli security planners. If the regime eventually falls, as seems likely, then the most probable outcome is a prolonged civil war, or the emergence of a Sunni regime in Damascus. The latter may well have nationalist or Islamist leanings, making it hostile to Israel - especially because the latter continues to occupy the Golan Heights, which it seized from Syria in 1967. A new Syrian regime could be tempted to resort to military adventurism towards Israel to consolidate its support.

Lebanon watching nervously: Israel and Lebanon will be watching each other closely. The main threat to Israel from Lebanon comes from Hizbullah, the Shi'a militant group that is allied to Iran. In the event of Israeli airstrikes on Iran, we would expect Tehran to mobilise Hizbullah against Israel, opening up a second front by means of rocket fire. Israel's determination to diminish Hizbullah's power was evident in the summer of 2006, when it launched a month-long war against the group in Lebanon. Israel's failure to decisively defeat Hizbullah was a blow to its prestige, and there is a risk of renewed conflict between the two sides even if Israel does not attack Iran. For its part, Hizbullah will be watching Israel's Operation Pillar of Defence closely to assess the performance of the Israeli military in light of a possible future confrontation.

Turkey no longer close partner of Israel: One of the biggest changes to Israel's geopolitical fortunes in recent years, even before the Arab Spring, has been the cooling of its relations with Turkey under moderate Islamist Prime Minister Recep Tayyip Erdogan. Erdogan has gradually been Islamising Turkey and re-orienting Ankara away from its traditional pro-Western stance in favour of closer ties with Middle Eastern countries. This has led to Turkey adopting a more pro-Palestinian position. Relations with Israel experienced a major crisis in May 2010, when Israeli military forces stormed a Turkish aid flotilla heading towards the Gaza Strip, resulting in the deaths of nine Turkish nationals. The flotilla was aimed at breaking the Israeli blockade of Gaza. Following the initiation of Pillar of Defence, Erdogan accused Israel of carrying out 'terrorist acts' and described it as a 'terrorist state'. With rhetoric running so high, it is evident that Turkey, while unlikely to support the Palestinians militarily, will remain wary of Israel for the foreseeable future.

Iran Remains Israel's Biggest Long-Term Threat

Despite Israel's current focus on Gaza, Iran remains Israel's biggest long-term threat. Israel is convinced that Tehran is developing nuclear weapons, and BMI sees a risk that Prime Minister Benjamin Netanyahu would interpret his expected re-election on January 22, 2013 (which we anticipate) as a mandate for war against the Islamic Republic. This does not mean that military strikes would automatically follow. The US is hoping for a new round of negotiations with Iran, and is still reluctant to sanction Israeli airstrikes. Meanwhile, the US and Israel may feel reluctant to take any action that would embolden hardliners ahead of Iranian presidential elections on June 14, 2013. Nevertheless, we believe that the risks of an Israel-Iran conflict will rise in 2013.


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