Israel’s Peace Agreement with UAE and Bahrain: Compulsions and Implications
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Issue Vol. 35.4 Oct-Dec 2020 | Date : 20 Dec , 2020

On Sep 15, 2020, a historic accord, now named as the ‘Abraham Accord’, was signed between the governments of Israel and the Arab states of United Arab Emirates (UAE) and Bahrain, at the White House in Washington DC. The UAE calls it a peace agreement, while Bahrain calls it normalisation of diplomatic relations. Effectively, it means recognition of Israel as a state by both these countries. It ended the drought of normalisation of relations with Israel. Only two Arab countries had established diplomatic relations with Israel before namely Egypt in 1979 and Jordan in 1994. The addition of two more countries is a feather in the cap of the Israeli Prime Minister Benjamin Netanyahu, who was under tremendous pressure to perform. What is significant is that Bahrain, a near vassal state of Saudi Arabia, has signed the deal, thus indicating a tacit approval from the Saudis. It augurs well, as it signifies a brighter future for Israel – Arab relationship. This article explores the reasons, implications and the timing of the deal and more. 

The Middle East Conundrum

The Middle East is a toxic cauldron. Post World War II, its politics has brought more violence and acrimony than any other region in the world. It is difficult to understand why the entire region has never known peace for itself. There is something explosive about their relations with each other. To understand the Middle East conundrum, one has to understand the conflict centres. West Asia is dominated by three countries that are trying to dominate the Muslim world and seeking a pivotal position in the comity of Muslim nations. These are – Saudi Arabia, Iran and Turkey.

Traditionally, Saudi Arabia has been accepted as the leader of the Muslim world because both the holy cities of Mecca and Medina are in Saudi Arabia and the king is the custodian of the holy mosques, which gives undisputed power to the Saudi king in the Muslim brotherhood. However, after the return of Ayatollah Khomeini in 1979, Iran became an alternative power centre which has challenged the Saudi primacy. Lately, even Turkey, under the leadership of Tayyip Erdogan, has emerged as the third power centre in the Muslim world. The rivalry between Saudi Arabia and Iran is a theological battle, the two sects of Islam the Sunni and Shia (Shiite), with Saudi Arabia being a staunch Sunni Muslim nation. The rivalry is all short of a direct war, as the two countries fight proxy wars in their neighbourhood. The Shia-Sunni divide has fractured the Middle East into two distinct groups – mostly the Shia-dominated nations that support Iran, and those that support the Saudis – primarily the Sunni-dominated nations. The map looks something like the one given below:

Source: Pew Forum on religion and Public Life, CIA Factbook

Despite the majority of Sunni-dominated nations in the Middle East, the battle of dominance is tilting in Iran’s favour. It has support in Lebanon, Syria, Yemen and Qatar. This divide fuels the civil war in Yemen, Iraq, Lebanon and Syria – the four most violent hotspots in the world today. In all the four conflict areas, Saudi Arabia and Iran are on opposite sides, fuelling the conflict. The consequent effect is that the Arab-Israeli rivalry has taken a backseat, and the Shia-Sunni or better put, as the Iran-Saudi rivalry has gained strength. The attack on the Saudi oil refinery of Aramco at Abqaiq on September 14, 2019 , was carried out by the Houthi rebels in Yemen in retaliation to Saudi intervention in the Yemeni civil war. However, Saudi Arabia has blamed Iran for the attack. Saudis claim that Iran is providing armed drones and cruise missiles to the Houthis and instigating them to attack.

Another hotspot – the Syrian civil war also has the stamp of rivalry. Iran supports the government forces of the Syrian leader Bashar Al Assad in the ten-year-long civil war, and the Saudis supporting the rebels fighting Bashar Al Assad. The Syrian conflict, the bloodiest in the region, also saw the rise and fall of the Islamic State of Iraq and Syria (ISIS). This conflict has seen the emergence of Turkey as a force to reckon with in the Middle East.

The second violent conflict zone exists in Yemen, where the Iranians support the Houthi rebels and the Saudis support the government of President Hadi, who has been confined to its Southern region. The rebels dominate in the North from where they keep targeting the Saudi Arabian cities and bases with the missiles provided by Iran. 

In the midst of this, the Israeli-Palestinian conflict seems to have taken a back seat. The formation of the Arab league and agenda of the Organisation of Islamic Nations (OIC) was, for a long time, dominated by the Palestine cause. Lately, it has subsided has and given way to more ghastly and violent conflict zones and issues. The loss of revenue from oil and the emergence of alternative sources of fuels have contributed to the new thought on transforming economies in the Gulf countries. It has led to the acceptance of the reality of living with Israel. While the Palestine question continues to fester, it is no longer a ‘life and death’ agenda for the Arab countries; their economic survival is.

Why the Peace Treaty Now?

Now is as good a time as it can ever be. The oil economies have been struggling; their revenues have dwindled. In February 2020, the IMF released a scathing report as a warning to oil-producing nations of moving away from oil as the primary source of revenue. If they do not diversify, their financial wealth will be depleted by 2034. The rulers of the Gulf countries have chalked out alternative strategies to progress their respective economies. The UAE has become a centre for advanced defence technology such as Artificial Intelligence, Robotics and autonomous vehicles. However, this transformation is not easy as most of the oil-producing Gulf countries are on a rentier system in which the government distributes the rent income which it receives from outside sources to its citizens, in lieu of their fundamental rights. 

This compulsion has been grasped by the younger heads of the Gulf countries. They desire to get away from the dependence on oil and go to more fundamental sources of revenue for the economy, such as manufactured goods and services. Israel’s utility chugs in here in helping the Gulf state transform. Israel is known to have a broad industrial base and high technology production facilities with cutting edge technologies. Partnership with Israel can help the oil-dependent economies to diversify into fundamentally more sound industrial economies. The IMF report and COVID-19 crisis have only hastened this decision. It is now a matter of economic survival.

The US elections also played a part in the timing, as the Saudis and UAE were uncomfortable about the thought of a Democrat being in the White House, thanks to signing of the Nuclear Deal with Iran in the Joint Comprehensive Plan of Action (JCPA) framework by President Obama. Thus, there was a belief that a deal in President Donald Trump’s tenure has the best chance of success. To hedge against American reluctance and a withdrawal from the Middle East in the near future necessitated the agreement to be fast-tracked.

The Israelis were under pressure to annex the Jewish settlements in the West Bank. The act would have led to another spate of violence in the region. To provide something to Israel for a domestic audience, UAE took the initiative and suggested a deal, which fructified into a peace agreement.

Why UAE First?

To answer this, one will have to make certain assumptions. These are – the UAE has decided to sign the deal only after having backroom parleys with Saudi Arabia and other allies in the region. Second, Bahrain’s inclusion in the deal should signal a more comprehensive approval of this decision by Saudi Arabia. Thirdly, the Palestinian cause has been put on the backburner with some tacit understanding with Israel. Several Gulf States had maintained a working relationship with Israel even in times of its abstention. In 2015, UAE had allowed a diplomatic presence to Israel at the International Renewable Energy Agency in Abu Dhabi. The Sultanate of Oman played host to Israeli Prime Minister Benjamin Netanyahu in 2018. Saudi Arabia had allowed its air space for commercial flights between Israel and other nations. Thus, the ground for a rapprochement was building up. It would be fair to assume that amongst the Arab states, the UAE was the best suited to start the process as it is a smart, modern, strategically global and economically best-poised state to take advantage. Also, because of its size, it does not threaten disruption of the balance of power in the region. For UAE to be the harbinger for this strategic relationship would mould it to a more concrete shape. The joining of Bahrain has to be understood as a signal of Saudi’s approval of this move. 

The next obvious question is who is likely to join this bandwagon next? Furthermore, will Saudi Arabia make peace with Israel? The states that are likely to join this group soon could be Oman and Sudan. Both countries are not averse to Israel as they have maintained some de facto relations. The possibility that Saudi Arabia will come out in the open and declare peace with Israel is unlikely in the near future. The reason is that King Salman Bin Abdul Aziz, who was the original member of Arab league leaders, swore never to recognise Israel till Palestine became an independent nation. He continues to hold this view even today and would not ratify any move to make peace with Israel. The heir apparent, his son Mohammed Bin Salman, is more progressive in his outlook and has admitted in public of the right of Israel to exist as a state, which is a significant deviation from his father’s stance. It is thus believed that he may not be averse to establish a relationship with Israel in the future. 

Who All Benefit from this Agreement?

The UAE was under pressure from the Trump administration to make a move for improving relations with Israel. On the other hand, Israel was on the verge of announcing the annexation of the Jewish settlements in West Bank territories around July 2020, as it was the long-promised election manifesto of Prime Minister Benjamin Netanyahu and his ruling coalition party. While the Arab world had learned to live with Israel in a status quo mode, the annexation would have disturbed this leading to unnecessary upheaval. In this potentially damaging reality, President Trump wanted to deliver a foreign policy coup to his electorate before the November elections. A confrontation with Israel in the West Bank was the last thing anyone wanted. UAE took the lead and the US President was happy to play ball. His resourceful son-in-law, Jared Kushner, himself a Jew, worked out a deal by bringing the two sides together. If serendipity helped, then the three parties were not complaining. The US President was happy to have a significant foreign policy success before the elections. The three Middle East countries were happy with the UAE-Israel peace agreement as it was a win-win situation for all. The agreement envisages opening of business relations, tourism, direct flights and scientific cooperation and in due course, full diplomatic relations at the ambassadorial level. The only caveat UAE put was, it would not open its embassy in Jerusalem, but in Tel Aviv.

The party to lose most due to this treaty are the Palestinians. They feel betrayed and their government has condemned the treaty. They believe that this will relieve the pressure off Israel to grant statehood to Palestine. Most opponents of Saudi Arabia have called this agreement a sell-out of the Palestinian cause, a betrayal of the Muslim brotherhood. Protests and display of placards were seen in Syria, Qatar and even Bahrain. But the lack of violence, signals a positive outlook to the deal in the Arab countries.

Iran Angle to the Deal

Many commentators have commented on the Iran angle to the deal. Their observation is that the deal is less about peace-making and more about strategic motives. Saudis, who consider themselves as the leader of the Arab league and Spiritual head of Muslim countries, find Iran a challenge their supremacy. The growing influence of Iran is becoming a menace for the Saudis. Iran has also armed itself well, despite the long regime of sanctions that have been imposed. Majority of the arms to Iran come from Russia and China. Luckily for Saudi Arabia, Iran is at loggerheads with the US. The UAE-Israel deal could not have come at a better time for the Saudis, as adding of Israel in the collective anti-Iran front, puts Iran under greater pressure.

Iran has condemned the peace agreement calling it a betrayal of the Palestinian cause. If the US were to conspire with Saudi Arabia to limit Iran’s influence in the region, it would have interposed Israel in between and strengthen the Saudi-led alliance in the proxy war against Iran. That is precisely what the deal envisages. The UAE would get the most modern F-35 Stealth fighters and the E-18 Growler electronic warfare aircraft from the US as part of this deal. UAE has a modern defence force and would help fight Iran›s dominance in the region. The Saudis are still reeling from the attack on their Aramco oil fields and vying for revenge. 

Implications for the Middle-East

Implications for the Middle East are huge as it has signalled a change in the 70-year old conflict equations. The recognition of Israel as a nation and its right to exist is a fundamental change in the Arab belief. Israel has been wanting an end to its isolation but was not able to get a breakthrough despite the numerous ties it continued to have with Arab countries. The opening of diplomatic relations between UAE, Bahrain and Israel would have the following possible implications: 

    • This peace agreement sends a signal to the Arab world that Saudi Arabia is not averse to Arab league nations to have friendly ties with Israel. Such an indication will allow many other Arab countries to follow suit, as has been mentioned in the article. Apart from Oman and Sudan, even Morocco is likely to forge diplomatic ties with Israel.
    • The schism between Saudi Arabia and Iran will deepen further. Iran will be compelled to seek newer allies. The civil war crisis in Yemen might intensify, with Saudis facing more significant missile threat on their Southern border. 
    • UAE will benefit as it will get military hardware from the US in return for signing the peace agreement. 
    • Business opportunities in the Middle East will increase with Israel’s participation. The nature of technology sought would be of a higher order. 
    • There would be a re-think about the rentier economies in the Gulf to shift to more fundamentally oriented economies of goods and services. Thus, it might signal a shift in the oil economies. 
    • Israel can provide a better market for both export and import of goods for the UAE and Bahrain and vice versa. 
    • Tourism in the Gulf will get a boost as Israeli tourists would be more than happy to travel to newer destinations. 
    • Israel would get a boost as its isolation would, at last, be ending. Israel has temporarily agreed to suspend the agenda to annex the Jewish territories in the West Bank, and thus in the Middle East, the status quo would be maintained concerning Palestine. 
    • Palestinians have felt betrayed because of this peace agreement. However, there is a constituency in Israel and Palestine which hopes that given a certain amount of lag, even the Palestinian government would begin to see the benefits of an agreement with Israel, especially if Saudi Arabia backs it. 
    • The US policy in the Middle East will get a significant boost as it will pave the way for more significant and renewed efforts towards lasting peace in the Middle East, irrespective of who wins the US elections in November 2020. 

Implications for India 

India has welcomed the peace agreement between Israel and UAE and the agreement with Bahrain. India stands to gain if the Arab countries strengthen their ties with Israel as it would no more be asked to choose between sides. India has established good relations with Israel, and both countries have reaped its benefits. It would thus benefit India if it could work with Israel as well as Arab countries in fields of science and technology applications in industry. India would be well poised to guide the Gulf countries to move away from oil economies to more fundamentally prudent manufacturing economies. India also has a vast population working in the Gulf countries. The transition of labour would be an essential step in the transformation of oil economies and India could provide leadership and supply them with the more reasonable labour force. The labour management would be a win-win situation for both parties as the migration of labour from the Gulf is likely to have a social and economic impact on the region. 

On the flipside is the India-Iran equation. India has maintained excellent relations with Iran, who has supported the Indian role in Chabahar port as a counter to Gwadar port in Pakistan. Lately, there has been a shift in Iran’s stance from India towards China, possibly because of the delay in India’s participation in building the railway line from Chabahar to Zahedan on the Iran-Afghan border. The new peace agreements are likely to further strengthen Iran and China partnership as both are antagonist towards the US who had brokered the deal. It would take a tightrope walk for India to continue to maintain friendly relations with Iran and at the same time cosy up with Saudi Arabia and Israel. 

A newer axis has emerged since Turkey has challenged Saudi Arabia’s supremacy of the Muslim world. The calling of the Islamic conference without the Saudis, as suggested by the Pakistani Foreign Minister and the Kuala Lumpur summit called at the behest of the Malaysian Prime Minister Mahatir Mohammad in December 2019, are an indication of this divide in the Muslim ummah. The Saudi backing of Bahrain in the peace agreement with Israel will only provide fuel to the growing divide. For India, the implications are – a newer axis is growing against it in the form of Pakistan, Turkey and Malaysia. Stronger ties with the Saudis and the Gulf countries would mean more vigorous opposition from these named countries to any India-related proposal in the international fora. 


The peace agreement between UAE, Bahrain and Israel is a new chapter in the Middle East which has a better chance of increasing peace as compared to increasing war. The deal has been brokered possibly with the tacit approval of the Saudi ruling dispensation led by the crown prince. The deal has ended decades of Israeli isolation. It has opened the doors for the Gulf countries to formulate more prudent economic policies and cast away their dependence on oil as the primary source of revenue. Both the US and Israel would be helpful allies in this transition. For India, while Israel and the Arab countries would now be more accessible, yet there will be some unease about growing distance with Iran as it finds a more natural ally in China. India’s getting closer to Saudi Arabia or the UAE further strains this relationship. 

The Middle East is an explosive geo-political space. It is impossible to make everyone happy there as national interests often collide. There are too many schisms to breach. If this deal signifies an end to the Israeli – Arab conflict, it could pave the way for a deadlier Saudi – Iran rivalry. Only time can tell if the Middle East can be more peaceful or continue on its path of violence.

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The views expressed are of the author and do not necessarily represent the opinions or policies of the Indian Defence Review.

About the Author

Maj Gen Nitin P Gadkari

Former Gunner and Commandant CDM, Secunderabad.

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One thought on “Israel’s Peace Agreement with UAE and Bahrain: Compulsions and Implications

  1. Not a bad analysis, but there are two points I would make:

    1) The role of Benjamin Netanyahu in bringing about the rapprochement between Israel and the Gulf countries is far greater than most people realize – as is his role in the events in the United States in 2016 and thereafter. He went out of his way to demonstrate what Israel can do for the Arabs – and the peace agreements are the result of this demonstration.

    2) The Iranian threat is overblown: the Turkish threat is the real one that pushed the UAE and others even closer towards Israel. It should be noted that Turkey backs the Muslim Brotherhood which is increasingly regarded as the number one internal threat to the Gulf by the UAE, (its police chief Dahi Khalfan has been very vocal on this point for some years now.)

    Of course, we should back the Arabs, Armenians, Iranians and Israelis against Erdogan and his gang.

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