Shushan Street:
Biden Trip Appraisal: Future of US Aid to Israel and Arab-Israeli Normalization

Dr. Debra Shushan
on July 27, 2022

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Joe Biden completed his first presidential trip to the Middle East with a “rapturous welcome” in Israel, a first-ever presidential visit to East Jerusalem (outside the Old City), meetings with Palestinian officials in Bethlehem, and a stay in Saudi Arabia that produced the fist bump seen round the world. In this appraisal, I explain what we can learn from this trip about the future of US security assistance to Israel and examine two speed bumps standing in the way of the Biden administration’s quest to expand Arab-Israeli normalization.

The Future of US Aid to Israel

Perhaps the most significant issue coming out of President Biden’s visit that has flown under the radar is the future of US security assistance to Israel. Biden and Prime Minister Yair Lapid, the leader of Israel’s caretaker government, signed the Jerusalem US-Israeli Strategic Partnership Joint Declaration, in which the American “sacrosanct” commitment to Israel’s security features prominently. The message of strong US support for implementation of the current 10-year, $38 billion Memorandum of Understanding (MOU) signed by President Barack Obama and Prime Minister Benjamin Netanyahu is welcome and to be expected.

What should raise eyebrows is the allusion to a more generous MOU when the current one expires. The Obama-Netanyahu agreement, which is the third 10-year aid MOU between the US and Israel, was signed in September 2016 and covers fiscal years 2019 through 2028. The Jerusalem Declaration signed by Biden and Lapid expresses an American “conviction that a follow-on MOU should address emerging threats and new realities,” hinting at a larger US financial commitment. These 10-year aid MOUs have grown significantly over time, from $26.7 billion under the Clinton administration to $30 billion under President George W. Bush to the $38 billion deal under President Obama.

The Jerusalem Declaration serves notice that consideration about the next MOU has already begun. Rather than taking for granted an “unstoppable trend line” in increasing US aid to Israel, we should pause to recognize the MOU as one of the most important levers in our relationship with Israel, which comes around once a decade. It merits a serious and thoughtful conversation with a number of questions on the table, for example:

  • How much aid does Israel need from the US? What can it afford to pay for itself? As a high-income country with a per capita GDP higher than wealthy nations like France, Japan, and the United Kingdom, Israel is exceptional among US aid recipients. It is not only the top US aid recipient; Israel received 53 percent of total foreign military financing (FMF) allocated by the United States in fiscal year 2022. (That includes only the $3.3 billion in annual FMF and excludes both the $500 million annually for missile defense and the extraordinary $1 billion supplemental for Iron Dome that year.) Given the US’ many national security and foreign policy funding priorities — not to mention domestic needs — it is reasonable to assess whether a wealthy country like Israel needs even more financial support from the US. Notably, former Israeli Justice Minister Yossi Beilin and former US Ambassador to Israel Daniel Kurtzer have argued recently that it is in US and Israeli interests for Israel to wean itself from US aid.
  • Are there sufficient guardrails in place regarding usage of US-provided materiel? Do US agencies have sufficient monitoring and oversight capabilities? US law establishes limitations on the use of US security assistance. The Arms Export Control Act (AECA) stipulates that US defense articles and services may be sold to friendly countries solely for use in “legitimate self-defense” and a few other purposes. Right-leaning pro-Israel organizations insist there is adequate oversight to ensure that Israel cannot utilize US-provided materiel in the occupied Palestinian territory in ways that violate US law. However, a recent Government Accountability Office (GAO) report raises serious questions about whether the Departments of State and Defense possess adequate procedures and mechanisms to track the use of US defense articles.
  • What are Israel’s missile defense needs? Following careful review of Israel’s defense needs in formulating the 2016 MOU, the Obama administration, for the first time, made a specific pledge of $500 million annually for missile defense. That pledge was made in anticipation of Israel’s need to replenish missile defense systems like Iron Dome after the unfortunately frequent outbreaks of violence between Israel and Hamas. The Obama administration was attempting to avoid a replay of the 2014 case in which the Israeli government requested an extraordinary appropriation for missile defense after an intense outbreak of fighting with Hamas. Thus, it is particularly noteworthy that Israeli officials in 2021 requested, and ultimately received, another extraordinary appropriation of $1 billion.

On the question of missile defense funding, the Biden-Lapid Jerusalem Declaration states that the US “is committed to seeking additional missile defense assistance in excess of MOU levels, in exceptional circumstances such as the hostilities with Hamas over eleven days in May 2021″ indicating that it anticipates and would support additional Israeli requests for supplemental missile defense. So we should ask: what constitutes “exceptional circumstances”? Was the May 2021 fighting actually an exceptional situation not anticipated by the 2016 MOU? As my colleague Dylan Williams has argued, it is time for a “real discussion about what the United States’ existing commitments are and what its priorities should be for any additional funding.”

Expanding Arab-Israeli Normalization, Centering Palestinians, and Countering Iran

Moving forward with the Arab-Israeli normalization process championed by the Trump administration was a major focus of President Biden’s Middle East trip. The President committed to working to “expand the circle of peace…to include ever more Arab and Muslim states.” Prime Minister Lapid spoke of Biden’s “journey of peace from Israel to Saudi Arabia, from the Holy Land to the Hejaz” and hailed the announcement that all civilian air carriers would be permitted to fly over Saudi airspace as “the first official step in normalization with Saudi Arabia.” Biden hailed the move as “a big deal” and “the first tangible step on the path of what I hope will eventually be a broader normalization of relations.” The Saudis, however, took pains to tamp down expectations, with Saudi Foreign Minister Faisal bin Farhan stating, “This has nothing to do with diplomatic ties with Israel… It’s not in any way a precursor to any further steps.”

This push for normalization ran into two obstacles: one related to the Palestinians and the second concerning Iran.

Regarding the first, senior Saudi officials stressed that Saudi normalization with Israel is predicated on a two-state solution to the Israeli-Palestinian conflict. Minister of State for Foreign Affairs Adel al-Jubeir stated that Saudi Arabia remains committed to the Arab Peace Initiative, which provides for full normalization with Israel by Arab states in return for Israeli withdrawal from the territories it occupied in 1967 and the establishment of a Palestinian state with East Jerusalem as its capital. “We need to have a process, and this process needs to include the implementation of the Arab Peace Initiative,” said Jubeir. “Once we have committed to a two-state settlement with a Palestinian state in the occupied territories with East Jerusalem as its capital, that’s our requirements for peace.”

Gulf experts stress that Saudi Arabia is “not the UAE,” given its imperative to represent broader religious and regional interests as the Custodian of the Two Holy Mosques. Polling by the Washington Institute for Near East Policy in March 2022 found that 75 percent of Saudis view the Accords negatively, compared to only 19 percent who view them positively, with views trending negative over time. As long as King Salman remains alive, there is no diplomatic progress toward Palestinian statehood, and Saudi public opinion remains deeply antagonistic to it, “political and diplomatic normalization is probably off the table.” The stunt by Israeli journalist Gil Tamari, who broadcasted himself illegally sneaking into Mecca, produced a furious reaction and likely set back Saudi-Israeli relations.

To its credit, the Biden administration is exploring ways to leverage Arab-Israeli normalization to benefit Palestinians. That’s a marked improvement from the Trump administration which, according to Khaled Elgindy of the Middle East Institute, used the Abraham Accords to “marginalize the Palestinians, to weaken them, to take away leverage, to…force them to the negotiating table.” President Biden and his foreign policy team should recognize that Palestinian skepticism and reluctance to join multilateral initiatives under the framework of the Accords and the Negev Forum are understandable, indeed reasonable, given the genesis of the Abraham Accords and Arab participants’ willingness to deepen relationships with Israel while de facto annexation continues relentlessly. The Biden administration should seek Palestinian integration as a full and equal party in regional initiatives – and recognize that it will need to earn Palestinians’ trust to secure their participation. More aid for Palestinians and measures that will improve their quality of life are important but insufficient. Building trust will require a political horizon toward Palestinian self-determination, firm pushback against deepening occupation, and full restoration of US-Palestinian relations.

The second stumbling block in the push for normalization is related to Iran. With prospects for a renewed nuclear deal narrowing following Trump’s disastrous abrogation of the JCPOA, Biden pledged that the US is “prepared to use all elements of its national power” to prevent Iran from acquiring a nuclear weapon. While the President indicated that diplomacy is his preferred means, he ruled out removing the symbolic and duplicative designation of Iran’s Islamic Revolutionary Guard Corps put in place by the Trump administration to make it politically costly to reenter the JCPOA and indicated his willingness to use force as a “last resort.”

At the GCC + 3 Summit in Saudi Arabia (which included the Gulf Cooperation Council states plus Egypt, Iraq, and Jordan), President Biden worked to build a “regional architecture” to face the Iranian threat. The Emiratis, however, balked at the potential for escalation with Iran. A senior advisor to President Mohammad bin Zayed emphasized that the UAE would not be “part of any axis against Iran” and was considering sending an ambassador to Tehran. Israel’s defense establishment is reportedly eager for a Middle East air defense alliance, but an Emirati official downplayed a possible Middle East NATO as a “theoretical” concept. Meanwhile, the Congressional Abraham Accords Caucus has introduced the DEFEND Act to implement a Middle East integrated air and missile defense capability to protect against missile attacks from Iran; that legislation could become law as part of the National Defense Authorization Act.

Following President Biden’s trip, the administration has an opportunity to assess the status of the normalization process and its planned regional architecture for the Middle East. Saudi Arabia and the UAE, which had once opposed the JCPOA, now fear that a diplomatic failure to return to the agreement could lead to a US-Israeli confrontation with Iran – in which they would suffer the fallout. The Biden administration should seize what may be the last chance to restore mutual compliance with the Iran nuclear deal, for which a Middle Eastern regional security grouping cannot be a substitute. Meanwhile, as it moves forward with normalization, it should insist on full integration of the Palestinians, while instilling in them confidence that the normalization process will be harnessed toward achieving a two-state solution and an end to the occupation.