How Israel Traded Regional Normalization for Isolation

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“I believe that we are at the cusp of an even more dramatic breakthrough: an historic peace with Saudi Arabia. Such a peace will go a long way to ending the Arab-Israeli conflict. It will encourage other Arab states to normalize relations with Israel. It will enhance the prospects of peace with the Palestinians. It will encourage a broader reconciliation between Judaism and Islam, between Jerusalem and Mecca, between the descendants of Isaac and the descendants of Ishmael.”

Hard to believe, perhaps, but this was Israel’s prime minister Binyamin Netanyahu at the UN General Assembly on 22^nd September 2023.

With the United States and Iran having just signed a highly contentious agreement to end the regional war, and with Israel more isolated than ever, a sobering question must be asked: How did Israel move from the brink of historic regional integration to profound diplomatic isolation?

I’ll answer that question first by mentioning a news story that understandably received scant attention, amid the frenzied coverage of President Trump’s emerging agreement with Iran. Israel’s Kan News reported earlier this week on documents that were seized in Gaza revealing that Hamas was terrified of what it saw as an impending normalization agreement between Israel and Saudi Arabia, viewing it as a “strategic threat” to the organization and the Palestinian cause. Scholars have described the need to thwart the imminent prospect of normalization as a decisive factor in the decision to carry out the October 7 attacks, and Hamas leaders have admitted as much. The Islamic Republic of Iran shared Hamas alarm over the prospect of Israel’s normalization with Saudi Arabia, and was particularly worried about plans to launch an integrated air defence system involving Israel and the Gulf states which it condemned.

While this is not the first report detailing Hamas’s panic over regional integration, the accumulating documentary evidence sheds a stark light on the extent to which the normalization issue loomed large in the strategic thinking of Iran’s Axis of Resistance.

Hamas succeeded in blowing up the prospects for normalization with the attacks of October 7. That in itself is no surprise. Yet it is deeply troubling that Israel gave Hamas and its patron exactly what they wanted.

A normalization agreement with Saudi Arabia would have required, at the very least, some minimal concessions on the Palestinian issue. However, Israel’s prime minister left himself absolutely no room for flexibility, shackled by his extreme coalition partners. By choosing to preserve his domestic alliance over regional grand strategy, Netanyahu effectively blocked his own diplomatic breakthrough. Israel’s subsequent excessive use of force in Gaza and its backing of West Bank annexation put paid to any possibility of widening the Abraham Accords. Netanyahu now talks of transforming the Middle East. The grim reality is that he may have succeeded: just not in the way he imagined.

The ensuing confrontation with Iran has only exacerbated the situation, driving the Gulf states to build a defensive rapprochement with Tehran. As Danny Citrinowicz, a longstanding expert on Iran at the Institute for National Security Studies (INSS) has pointed out, Israel is now the only state in the region which looks positively on the use of military force against Iran. This strategic shift applies even to the United Arab Emirates, which had previously gone out on a limb to strengthen ties with Israel. This is an enormous, self-inflicted setback for Jerusalem.

Last week, I paid tribute to Sir Alex Younger, the former head of Britain’s Secret Intelligence Service, who passed away earlier this month. His observations were consistently incisive and prescient, whether he was discussing the war in Ukraine or the turmoil in the Middle East. Days after the October 7 attacks, before Israel launched its heavy military response, Younger was interviewed on the BBC Today programme. His insights will always stay with me:

“Hamas will be well pleased if Israel commits itself to an open-ended full scale ground invasion of Gaza because of the scale and intensity of conflict that will entail and the loss of innocent lives that will inevitably follow. And the radicalization that will engender and the extent to which it will put Israel’s allies and partners in the region in an impossible position. These are all things that Hamas wants. You cannot kill all the terrorists without creating more terrorists.,,,

I absolutely understand and endorse Israel’s right to defend themselves in these circumstances. But here’s the thing. You shouldn’t do what your enemy wants you to do. It is really obvious now that Hamas is essentially laying a trap for Israel...”

Younger was spot on. Israel fell directly into the trap that Hamas laid, but its subsequent decision to expand the war to Iran has made its strategic situation far worse. There is a solid argument that the 12-day war of last June against Iran belonged in this defensive category because Tehran was on the threshold of obtaining a nuclear capability. But that short war had limited, clear objectives. Once they were achieved, Israel and the United States should have left well alone.

Instead, the political and military establishment succumbed to the illusion that military force could solve all regional challenges. To quote Citrinowicz: “Effective strategy requires distinguishing between threats that can be managed and threats that cannot be tolerated. Iran’s regional influence and missile capabilities belong to the first category; a nuclear-armed Iran belongs to the second.”

By treating manageable threats as intolerable existential crises, Jerusalem launched an open-ended war that has failed to meet a single one of its stated strategic objectives. The Islamic Republic of Iran is now stronger, not weaker; its nuclear programme has not been eradicated; its missile programme has not been destroyed; and Tehran continues to robustly back its proxies, seen most clearly through its ongoing support for Hezbollah. Iran will also receive a significant economic windfall for opening the Straits of Hormuz. We hardly need reminding that it was entirely open prior to this war.

The memorandum of understanding that President Trump signed with the Iranians has rightly been criticized for its heavy concessions towards Iran. The primary inducements to Iran are granted on a plate in this agreement. Furthermore, the vital nuclear dimension has been eclipsed in this agreement by other transactional issues such as the opening of the Straits of Hormuz that were non-existent before this ill-conceived war. Israeli former deputy national security adviser Chuck Freilich describes the deal as “an Iranian victory over the U.S. and Israel.” Nevertheless, as nuclear policy expert James Acton has pointed out here, the agreement is the inevitable product of a catastrophic, expanded war that should never have been launched in the first place.

It was intriguing to hear Israel’s diaspora affairs minister Amichai Chikli being interviewed this morning on Israel’s Army Radio. He was at great pains to avoid criticizing President Trump. But in a telling sign of the domestic narrative to come, he began pointing to a “new alliance” threatening Israel: Pakistan, Turkey, and Syria. The minister went so far as to declare: “It is a matter of time until Israel will be at war with Syria.” One has to wonder: Is Israel actively looking for new wars? This is one to watch.

You can now expect the Netanyahu government to double down and push the manipulative narrative that Israel stands entirely alone and must therefore do whatever it takes to protect itself from enemies that seek its destruction. It would be highly convenient now for a desperate Netanyahu to encourage a siege mindset in Israel if it helps his upcoming electoral prospects. History shows where this path leads. This begs a critical question: where is Israel’s opposition?

Ahead of the election, Israel’s opposition leaders have done the public a profound disservice by reflexively supporting the Netanyahu government’s catastrophic war with Iran. Back in 2018, Yair Lapid said that it would be preferable for the United States not to abandon the nuclear deal that Barack Obama signed with Iran in 2015, and to work instead to improve its provisions. This was sensible. Now in 2026, Lapid has repeatedly called for Israel to bomb and destroy Iran’s oil fields and energy infrastructure. Even Yair Golan, leader of the center-left Democrats, now claims the war should never have been launched, despite failing to take a stand against it when the conflict began in February.

As a result, the current attacks on the prime minister often look opportunistic and hypocritical. They failed to offer a different vision, often choosing to try outflanking the government from the right. They now have an urgent duty to tell the electorate the truth about the limitations of military force and these squandered normalization opportunities. They must stop playing political catch-up and finally articulate a viable, alternative path back toward regional cooperation and normalization.