"Israel Defence & Security Report Q4 2013" now available at Fast Market Research

BMI's Q4 Israel Defence & Security report examines recent defence and procurement developments. A number of recent events have occurred which will affect these.

Israel's domestic and regional security situation remains volatile. The last quarter has seen a serious worsening of the civil war in nearby Syria. US-sponsored peace talks with the Palestinians are ongoing, but with both sides remaining tight-lipped on their progress. There is still the possibility of confrontation with Iran, and it is unclear if pro-peace centrists will be able to influence the government's hawkish stance on the Israeli-Palestinian conflict.

Although Prime Minister Binyamin Netanyahu was re-elected in January, his party was somewhat weakened and he was forced to forge a coalition with other parties. Despite the fact that these pro-cut factions are likely to influence the economy, and reduce the deficit, which will be good for domestic political stability, they are unlikely to have much impact on Netanyahu's anti-Iranian stance. BMI believes that the prime minister is likely to continue to advocate curbing Iran's nuclear programme, and we think that a war between Iran and Israel is increasingly likely. We see Iran as the biggest threat to Israel.

Full Report Details at
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The report's general conclusion is that Israel must soon take the critical decision about whether to conduct air strikes against Iran's nuclear facilities. However, red lines have become a point of tension between Washington and Tel Aviv, with the Obama administration refusing to accede to Israeli demands that it spell out its red lines on the Iranian nuclear initiative. The US government merely reiterated its position that it would not permit Iran to go nuclear, and pointed strongly to the fact that it thinks sanctions - which are now causing severe damage to the Iranian economy - should be given more time.

The July 2013 removal of Egypt's leader, Mohamed Morsi, does not bode well for the Israeli-Egyptian peace treaty. It remains to be seen how Israel-Egypt relations will thus develop in the immediate future. We do not think that Egypt will risk losing US funding and military aid by openly confronting Israel. However, the emergence of a jihadist threat in Sinai led Israel to give the green light for Egyptian military operations on the Peninsula - even though such activity is not usually permitted by the two countries' peace treaty. At the same time, although Jordan is nominally at peace with Israel, its king is likely to have to give up some powers to parliament and the new prime minister might well discard the country's peace treaty with Israel. Overall, both regionally and internationally, Israel is becoming increasingly isolated.

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