This report was written by:
Priyanka Prakash – MENA Intelligence Manager and Gulf region specialist
And reviewed by:
Oded Berkowitz – Deputy Chief Intelligence Officer
Executive Summary
On September 15, the UAE, Bahrain, and Israel signed the “Abraham Accords”, which was brokered by the US, constituting a watershed moment in the history of Arab-Israel peace efforts.
Several factors have contributed to the UAE and Bahrain’s decision to normalize relations with Israel, including their common perception of the threat from Iran, pursuit of economic and technological cooperation, and intentions to forge stronger security ties with the US.
While other Gulf countries such as Saudi Arabia and Oman have welcomed the peace deal, they may bide time to test the public reaction to the “Abraham” Accords before opting on a formal course of similar agreements with Israel. This is primarily as the Palestinians, and the Arab populations that support them, perceive these accords as betraying their interests and cause.
Iran is likely to perceive these developments as the strengthening of an alliance of countries that oppose it, which will vastly elevate its threat perception. Tehran will likely seek to strengthen its alliance with Qatar and Turkey to counteract the “anti-Iran alliance”, and may also respond by emboldening its proxies to conduct attacks, including through both physical and cyber means.
Travel to Bahrain and the UAE, as well as other Gulf countries can continue as normal while adhering to basic security precautions and adherence to cultural norms.
Current Situation
On August 13, in a joint declaration by the UAE, Israel, and the US, the Emirates announced that the UAE will fully normalize relations with Israel by signing an official peace agreement known as the “Abraham Accords”.
According to August 15 reports, Iran responded to the development by calling it a “huge mistake”, while adding that the UAE would be held responsible “if something happens in the Persian Gulf and if our national security is damaged.”
On August 31, the first official flight from Israel, carrying a delegation of Israeli and US officials, landed in the UAE.
Saudi Arabia and Bahrain stated that they would open their airspace to allow all Israeli flights to and from the UAE on September 2 and 3, respectively.
On September 11, Bahrain announced that it would establish diplomatic relations with Israel.
On September 15, leaders from the UAE, Bahrain, Israel, and the US officially signed the Abraham Accords and separate bilateral agreements in Washington, DC, known as “Treaty of Peace, Diplomatic Relations and Full Normalization Between the United Arab Emirates and the State of Israel” and the “Declaration of Peace, Cooperation and Constructive Diplomatic and Friendly Relations Between Bahrain and the State of Israel”.
Background
Since the establishment of the state of Israel in 1948, most Arab states have refused to grant it any form of recognition. Egypt and Jordan are the only two Arab countries to have signed a peace treaty with the Jewish state, in 1979 and 1994 respectively, following several wars. However, in recent years, there have been several events and indications suggesting the development of covert and backchannel cooperation between some Gulf states and Israel. While a majority of such indications have been in the form of subtle maneuvers, more recently, overt public moves to improve relations have been recorded. These include Israel Prime Minister Benjamin Netanyahu’s visit to Oman in October 2018, Israel’s former Culture Minister Miri Regev’s visit to the UAE to attend an international judo tournament also in October 2018, as well as the invitation extended to an Israeli delegation to attend the Global Entrepreneurship Congress (GEC) conference in Manama in April 2019. Therefore, the signing of the accords did not occur in a vacuum and merely constitutes the final stage of rapprochement following a steady improvement of relations between certain Gulf states and Israel over recent years.
The Gulf Cooperation Council (GCC) was founded in 1981 to offset the ambitions of Iraq and Iran and consists of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE. While Iraq ceased to be a challenger following multiple wars, Iran’s rising influence and engagement in perceived destabilizing activities through its Shiite proxies across the region, coupled with its efforts to acquire nuclear capabilities, has been a core security concern for Gulf powers that neighbor the Islamic Republic. Israel shares this mutual threat with most GCC states given Iran’s hostile rhetoric against the Jewish state, as well as the cultivation and financial, ideological, and material support extended to proxies such the Lebanese Hezbollah, and the Gaza Strip-based Hamas and Palestinian Islamic Jihad (PIJ), which repeatedly attack Israel.
Reasons, motivations for UAE, Bahrain’s pursuit of peace with Israel
Common strategic threat: Iran
In addition to the perception of the threat from Iran by Israel, Bahrain, and the UAE, confrontation with Iran dominates the US’s approach to the region. This includes the promotion of an anti-Iran alliance between Israel on the one hand, and Saudi Arabia, the UAE, and other Gulf states on the other. Therefore, the Saudi-aligned states’ long-standing positive relations with the US, as well as their pursuit to expand military cooperation and acquire the latest defense technologies, which are fundamentally necessitated by the threat posed by Tehran and its backed groups in the Gulf region, are key factors that have contributed to the UAE and Bahrain’s decision to normalize relations with Israel.
This is most relevant for the UAE, which profoundly recognizes that its greatest regional ally, Saudi Arabia, cannot be expected to provide for the Emirates’ defense, considering the significant security challenges faced by the Kingdom as a result of its campaign against the Iran-backed Shiite Houthis in Yemen. However, while the UAE has long sought to become self-reliant and modernize its military, the US is known to place strict limits on the quality of the weapons it sells in the Middle East to ensure Israel’s qualitative military edge (QME) – that is, technological, hardware, and other advantages that allows it to deter numerically superior adversaries. Although Russia and China do not place limitations on the UAE’s acquisitions, their products are perceived to be of lower quality and have the potential to create severe tensions in the US-UAE relationship. Therefore, by establishing formal ties with Israel, the UAE expects the US to reduce restrictions that safeguard Israel’s QME so that it can purchase advanced weaponry, including stealth aircraft such as the US-made F-35s, as well as the American Reaper unmanned aerial vehicles (UAVs). This would provide the Emirates an edge over Iran’s anti-aircraft defense systems and its air force, which is largely outdated with aircraft purchased prior to 1979.
Unlike the UAE, Bahrain is not known to have vast military aspirations. However, its concerns with Iran pertains to the influence the latter wields amid the majority Shiite population on the island. Bahrain has long accused Iran of aiding Shiite opposition elements, including both political as well as militant groups that harbor significant dissentious sentiments against the Sunni ruling family. Prior to the signing of the agreement with Israel, on September 14, Bahrain’s Interior Minister stated, “It is not an abandonment of the Palestinian cause…it is to strengthen Bahrainis’ security and their economic stability…Iran has chosen to behave in a dominating way in several forms and has become a constant danger that harms our internal security”. This statement indicates the Bahraini government’s view that a growing cooperation with Israel will assist it in acquiring security means as well as geopolitical leverages, primarily from the US, that will help deter Iran and thus maintain Bahrain’s national security.
Lack of significant opposition, backlash from local population
The current political and demographic realities in the UAE suggest that there is minimal opposition to peace with Israel. The UAE is one of the most liberal countries in the Gulf, with a high degree of tolerance for other cultures and beliefs given that it hosts residents of over 200 nationalities. Despite not sharing diplomatic relations with Jerusalem, approximately 150 families or 3,000 Jews have been known to live as well as worship at a synagogue in an upscale neighborhood in Dubai. Similarly, Israeli and Emirati businessmen have been known to conduct trade through third-party channels for many years. This indicates not only the authorities’ tacit approval and efforts to promote harmony between the UAE and Israel, but also the people-to-people links and overarching positive outlook between the local populations of the two countries. Cooperation with Israel particularly resonates with the younger generation, who view it as a reflection of the UAE’s “forward-thinking and future-oriented vision for the region”, according to the Director of Strategic Communication at the UAE Foreign Ministry.
The Bahraini society is characterized by sectarian fault lines between the Shiite majority population, which favors Iran due to the latter’s position and efforts to ascertain itself as the leader of the Shitte masses in the Muslim world, and the minority Sunni population that represents 30 percent of the local population, including the ruling government. As mentioned previously, while Bahrain has more reason to pursue a cautious approach vis-a-vis Israel due to the sizable opposition to such endeavors from its Shiite population, the environment within the Kingdom has been shifting in favor of the Bahraini government over recent years. This is particularly considering that authorities have been largely successful in cracking down on Shiite opposition by arresting prominent Shiite political leaders as well as figures and operatives perceived to be linked to Iran-backed Bahraini militant groups. Apart from arrests, Bahrain has also shut down websites and social media accounts of various Shiite individuals and canceled or revoked the licenses of various entities to prevent them from functioning legally. These measures have extensively decreased the mobilization capacity of Shiite opposition organizations, which is evidenced by the diminishing cases of civil unrest in the country since 2019. FORECAST: Nevertheless, there will continue to remain a degree of animosity towards Israel and its future interests with respect to Bahrain among the Kingdom’s majority Shiite population over the coming months.
Technological and economic cooperation
Trade, economic, and technological cooperation with Israel are high priorities on both the UAE and Bahrain’s agenda, as exemplified by the identification of various areas of cooperation in the separate agreements signed by the two parties with Jerusalem. A noteworthy factor is that the peace deals also come amid the coronavirus pandemic, which has had a significant adverse impact on the Gulf economies due to the global decline in oil prices and fall in tourism as a result of COVID-19-related restrictions. Therefore, fresh avenues of trade and investment with Israel is expected to stimulate and help the recovery of two countries’ economies, while also fostering scientific and technological collaboration.
For the UAE, which has one of the most well-diversified economies in the GCC, boosting tourism and scientific research and development, along with the expansion of bilateral trade links with Israel, are likely at the forefront of the decision to normalize relations. According to September 17 reports, Israeli officials have estimated trade between the UAE and Israel to amount to 300-550 million USD a year. The treaty mentions that two sides will cooperate across a number of sectors including health care, food security, aviation, finance, tourism, energy, and science and technology. On September 16, a Dubai-based logistics company stated that it had signed Memoranda of Understanding (MoUs) with an Israeli enterprise, which is a partner of the Port of Eilat. This includes participating in a privatization tender of the Port of Haifa, and the establishment of “a direct shipping route between Eilat and Jebel Ali”. Meanwhile, on September 16, the Abu Dhabi Investment Office announced its intent to open its first branch abroad in Israel. These events indicate the interest of both Emirati and Israeli entities to gain a foothold in each other’s countries in order to scale-up their businesses. The UAE’s strength as a regional hub of logistics and transportation will likely complement Israel’s expertise in technological innovations, thereby pointing towards the vast potential for collaboration between the two sides across multiple sectors over the coming months and years.
Compared to its regional neighbors, Bahrain is a small island nation with limited oil and gas resources that makes it more vulnerable to economic deficiencies. Although by October 2019, Bahrain’s Finance Minister Sheikh Salman bin Khalifa Al Khalifa announced that the country was meeting its goal for reducing the fiscal deficit and that its budget would be in balance by 2022, the coronavirus pandemic has upset the island’s economic progress. According to reports quoting figures released in August by Bahrain’s Finance and National Economy Ministry, state revenue plunged 29 percent in the first half of the year by 2.4 billion USD, while oil revenue dropped by 35 percent. The government’s cognizance of its dissipating energy resources, which are expected to be exhausted in the next ten to 15 years, and the fluctuations in the global energy market has forced Bahrain to focus its attention on attracting foreign investments. Bahrain has also over recent years attempted to rebrand itself as a regional financial technology capital, which includes the establishment of a hub for financial technology companies called FinTech Bay. Thus, by extending diplomatic and trade relations with Israel, Bahrain likely seeks to kickstart new investments and partnerships, particularly in the financial technology and e-commerce sectors, in order to diversify and revitalize its economy under the Bahrain Economic Vision 2030.
Potential for other Arab countries to normalize relations with Israel
Following the groundbreaking joint announcement made by the US, Israel, and the UAE leadership on August 13, there have been several indications, particularly from US President Donald Trump’s administration, that the UAE will not be the only country to normalize relations with Israel. In the subsequent weeks, US Secretary of State Mike Pompeo and Trump’s senior adviser and son-in-law Jared Kushner made separate visits to multiple Arab countries including, Bahrain, Morocco, Oman, Qatar, Saudi Arabia, Sudan, and the UAE. Given that the UAE and Bahrain have already formally declared peace with Israel, it is possible that some of the other countries on the list will be the next to sign similar agreements with Israel.
Given the close-knit relationship between Bahrain, the UAE, and Saudi Arabia, it is highly unlikely that the former two countries would have acted on the Israel issue without the assent of Riyadh. FORECAST: This, coupled with Saudi Arabia’s welcoming of the move by its allies, the September 2 decision to allow Israeli flights over its airspace, and other indications suggest that the Kingdom could move to normalize relations with Israel at some point in the near future, or “at the right time” as stated by Trump. Its cautious approach at the current juncture may be attributed to Saudi’s religious stature as the leader of the Muslim world and custodian of the holy mosques in Mecca and Medina, which places it at a crucial position vis-a-vis Israel and the Palestinian conflict.
Additionally, although Saudi Crown Prince Mohammed bin Salman (MbS) has expressed his openness to recognizing Israel, his father, King Salman bin Abdulaziz has reiterated his intention to first reach a “fair and permanent solution” for the Palestinians. FORECAST: Thus, given Saudi Arabia’s perception of itself as the primary representative and defender of Muslim and Arab grievances and its traditional support for the Palestinian cause, it is less likely to be among the first countries to extend overt cooperation with Israel. Instead, the Kingdom will likely continue to test the public reaction to the UAE and Bahrain’s agreements before opting on a formal course of actions towards establishing relations with Jerusalem. The upcoming US presidential election in November is also likely to be a major factor that will influence the Kingdom’s decision-making. Should the Democratic candidate, Joe Biden, win the elections, Riyadh will likely prolong the peace process with Israel in order to first calculate the direction of its strategic relationship with the US, based on the latter’s policy towards the Middle East over the coming months. On the other hand, should President Trump be re-elected, the US’s assurance of support for Saudi-Israel cooperation will likely push MbS towards adopting further measures in the direction of normalization.
Another country that is expected to pursue a peace deal with Israel among the Gulf states is Oman. Although the Sultanate has typically pursued more neutral policies, and traditionally has positive relations with Iran, overtures towards Jerusalem, including the visit of Israel’s Prime Minister Netanyahu to Muscat in October 2018, have symbolized Oman’s recognition of Israel as a major regional actor. Therefore, despite a seeming hiatus in Oman-Israel relations over the past year, given the emphasis by Sultan Haitham bin Tariq, Muscat’s new leader, that the government will “follow the same line as the late sultan, and the principles that he asserted for the foreign policy of our country”, it is likely that Haitham will tread the line of his predecessor. New economic opportunities are also a major motivation for Oman to pursue a formal relationship with Israel, given that similarly to Bahrain, the Sultanate’s economy also does not benefit from vast reserves, as opposed to its neighbors in the Arabian Peninsula.
FORECAST: While there is no certainty with regards to Oman’s normalization moves, it will likely continue to pursue further efforts to engage with Israel after gauging the public mood vis-a-vis recent developments. Given Oman’s aspiration to increase its regional influence, Muscat may use its positive or future diplomatic relations with Jerusalem to present itself as a mediator between Israel and the Palestinian Authority. Limited measures such as the opening of political offices in Israel, or the expansion of economic ties, as a requisite for normalization may feature on Muscat’s agenda.
With regards to Qatar and Kuwait, the governments of both states have indicated that they do not, at this stage, seek to normalize relations with Israel. In the case of Qatar, bilateral cooperation on Gaza has deepened the engagement between Doha and Jerusalem, partly evidenced by Mossad Chief Yossi Cohen’s visit to Doha in February to ensure the delivery of financial aid to Gaza amid the coronavirus pandemic. Nevertheless, Qatar currently maintains that it remains committed to finding a solution for the Palestinian conflict, as indicated by the Foreign Ministry’s spokesperson’s statement on September 15 that normalizing relations with Israel “can’t be the answer” to the Israeli-Palestinian conflict. FORECAST: Moreover, given the ongoing 2017 intra-GCC dispute between Qatar and the Saudi-aligned states, including the UAE and Bahrain, the former is unlikely to join its neighbors at this juncture, to avoid being identified within the same sphere as its adversaries. Furthermore, Doha’s pragmatic relations with Iran, particularly since the start of the intra-GCC dispute are also antithetical to the policies of its neighbors, and will likely factor in the course of relations with Israel.
Similarly, Kuwaiti officials have stated that it will be “the last to normalize” relations with Israel. FORECAST: Kuwait’s hybrid political system, with an appointed government and an elected parliament, unlike the other Gulf monarchies, makes it less likely to follow the UAE and Bahrain in normalizing relations with Israel. This is given the populist nature of Kuwaiti politics due to which most government officials and politicians will likely refrain from openly supporting such a proposal due to the fear of political and electoral backlash from the local population.
Impact on regional security due to opposition from Iran, potential threat of attacks from Iran-backed groups
The rapprochement between Israel and the Gulf states raises significant concerns for Tehran. First and foremost, the normalization agreements will elevate the Islamic Republic’s fears about the strengthening of an alliance of countries that oppose it in the region. An overt alliance between certain Gulf states and Israel, supported by Washington and Riyadh, is likely to threaten Iran’s aspirations to be a regional hegemon, as such an alliance could not only strengthen the constituent members on the security level, but also on the economic and commercial levels. Such an “anti-Iran coalition” is likely to exacerbate Tehran’s isolation in the region, especially at the current juncture when its regional status is being challenged in countries such as Syria and Yemen, with more apparent opposition in Lebanon and Iraq. Protesters in Iraq have extensively denounced Iran’s perceived interference in Iraq’s political matters since the start of the protest movement in October 2019. Similarly, in Lebanon, anti-Hezbollah sentiments have been particularly exacerbated following the August 4 explosion at the Port of Beirut, which large segments of the population have attributed to negligence and corruption on part of the political class, which is severely influenced by the Iran-backed Shiite group. Persistent Israeli airstrikes in Syria against Iranian-linked targets have also hampered Tehran’s ability to sustain its operations in the country. In Yemen, the Iran-backed Houthi forces continue to face immense military pressure from the Saudi-led Coalition. Therefore, along with these regional challenges, the normalization agreements are likely to amplify Iran’s threat perception.
Despite the fact that the agreements do not explicitly mention cooperation in the defense sector, a potential covert Israeli presence or activity out of the gulf countries that may be used to target Iran and its regional interests are likely to be at the forefront of Tehran’s concerns. Iran’s main concern would be with regards to its nuclear aspirations, which it considers a national priority, given that Israel has repeatedly voiced its opposition and has attempted to hinder the former’s nuclear program in the past. Furthermore, the UAE’s gaining of advanced technology and weaponry from both the US and possibly Israel, which may be used against Iran in a future conflict also poses a significant security threat to the Islamic Republic.
FORECAST: There are a number of ways Iran may respond to this growing threat. Politically, it may seek to strengthen relations with Turkey and Qatar to counteract the arrangements between the Gulf states and Israel. Ankara’s opposition to the UAE-Israel deal, its existing animosity with the UAE regarding their support for the Islamist Muslim Brotherhood, and deteriorating relations with Jerusalem, are likely to cause Ankara to further shift its alignment towards Iran with regards to this subject. Similarly, Iran may increase its support to Qatar, which is currently engaged in a diplomatic rift with the Saudi-led bloc, both diplomatically as well as commercially.
FORECAST: In terms of offensive measures, Iran will likely respond to its growing threat perception by emboldening its proxies in the region, which also allows it to maintain plausible deniability regarding attacks against its adversaries. Given that the Shiite Houthis constitute Tehran’s primary beneficiary in the Gulf region, an increase in hostile rhetoric and attacks against Saudi and Emirati interests remain possible. There has been a significant uptick in Houthi-perpetrated cross-border attacks towards Saudi Arabia over recent months, there is a potential for additional targeted attacks particularly aimed at strategic sites, including oil infrastructure, ports, and airports. This is bolstered by precedents such as the recent September 10Houthi-perpetrated ballistic missile and UAV attack towards Riyadh, as well as the September 14, 2019 attacks targeting Saudi state-owned facilities in Eastern Province’s Buqaiq and Khurais. Attacks against oil tankers and commercial vessels operated by or destined for the UAE in the Red Sea and the Bab al-Mandab strait by the Houthis, or in the Gulf of Oman and the Strait of Hormuz by Islamic Revolutionary Guard Corps (IRGC)-linked elements remain possible.
Additionally, a potential increase in cyber attacks by the Iranian state or affiliated groups is likely given that it is known to be one of Tehran’s preferred modus operandi to target its rivals’ interests. A number of recent back-and-forth cyber attacks between Iran and Israel following a reported attempt by Iranian cyber hackers to increase chlorine levels in the water flowing to Israeli residential areas in April highlights the potential for similar attacks on both government or commercial enterprises of members belonging to the “anti-Iran alliance”.
FORECAST: However, given that Iran and the UAE have, during several instances over the past year, engaged to de-escalate tensions and have projected interests in maintaining cordial diplomatic and commercial relations, it is likely not in Iran’s interest to directly and overtly attack the UAE. The UAE is considered to be one of Iran’s largest trade partners, despite their rivalry, and in the past has served as a central hub for Iran’s sanction evasion efforts. Therefore, the extent of direct Iranian activity against the UAE, or Israeli interests in the UAE, will be based on Iran’s perception of threat to its national security from potential Israeli security-related actions in the UAE.
FORECAST: With respect to Bahrain, Iran may increase its support for subversive Shiite elements in a bid to exacerbate anti-Israel as well as anti-government sentiments in the society. This may amplify sectarian tensions and has the potential to lead to an increase in civil society demonstrations and instances of unrest. Moreover, dormant Bahraini militant groups, such as Saraya al-Ashtar and Saraya Wa’ad Allah, which are known to have significant links to Iran, will likely increase their propaganda activity to denounce the Bahraini government’s cooperation with Jerusalem and will render Israeli targets in the island as legitimate targets for militant attacks. This has already been witnessed by the creation of a sub-unit by Saraya Wa’ad Allah, called the “Martyrs of Jerusalem Company” to specifically initiate attacks against Israeli targets in Bahrain, per the group’s announcement on September 16. Therefore, despite the Bahraini authorities’ relative success in clamping down on opposition and militant activity in the country, the underlying risk of attacks is likely to increase over the coming months in line with elevated Bahrain-Israel engagements.
Overall, the developments mark a notable progress with regards to rapprochement efforts and indicate a growing recognition of Israel as a regional power among certain Gulf states, despite the lack of a conclusive resolution to the Israel-Palestinian conflict. FORECAST: As mentioned previously, public reactions, the level of response from Iran and its backed groups, as well as the US’s political trajectory following the presidential elections in November will constitute key factors that will influence additional Arab countries’ decision to pursue similar peace deals with Israel over the coming months and years.
Recommendations
Travel to Bahrain and the UAE, as well as other Gulf countries can continue as normal while adhering to basic security precautions and adherence to cultural norms.
Israeli citizens seeking to operate or travel to Bahrain are particularly advised to maintain a low profile due to prevalent anti-Israel sentiments among the Shiite population.
Remain cognizant of local political, religious, and social customs while traveling and avoid initiating conversations on potentially sensitive topics, including the improving relations between Israel on the one side, and Saudi Arabia, Bahrain, the UAE and Oman on the other with the local population.
Those managing or operating vessels in the Gulf of Oman, the Persian Gulf, and the Strait of Hormuz, as well as the Red Sea and the Bab al-Mandab Strait are advised to take necessary precautions, including reviewing security protocols and adhering to international instructions, in light of the general threat posed by Iran-linked actors in the area. Be aware of NATO Shipping Center alerts and keep watch for suspicious vessels.
