The new Israeli government will not move ahead on the core issues of peace talks with the Palestinians until it sees progress in U.S. efforts to stop Iran's suspected pursuit of a nuclear weapon and limit Tehran's rising influence in the region, according to top government officials familiar with Prime Minister Binyamin Netanyahu's developing policy on the issue.
"It's a crucial condition if we want to move forward," said Deputy Foreign Minister Daniel Ayalon, a member of the Israeli parliament and former ambassador to the United States. "If we want to have a real political process with the Palestinians, then you can't have the Iranians undermining and sabotaging."
The emerging Israeli position, a significant change from that of previous governments, presents a challenge for President Obama, who has made quick progress on Palestinian statehood a key foreign policy goal. Obama is also trying to begin engagement with Iran as part of a broad effort to slow its nuclear program and curtail its growing strength in the Middle East.
U.S. officials are wary of linking the two issues and, if anything, would like to do the reverse of what Israel has proposed, by using progress in the Israeli-Palestinian talks to curb Iranian influence, which is wielded in the region through anti-Israeli organizations such as Hezbollah and Hamas.
"We have to be pretty careful how you approach that kind of connection," said a senior U.S. official, speaking on the condition of anonymity because he was not authorized to speak publicly. "We are dealing with Iran because there are behaviors out there that are deeply troubling. We would be doing that regardless of other issues. By the same token, the Palestinian issue is an issue that obviously evokes a great deal in the region."
The official argued that the Obama administration has already demonstrated it is committed to dealing with both issues at the same time by appointing high-profile officials -- former senator George J. Mitchell on the Palestinians, former peace negotiator Dennis Ross on Iran -- to craft and implement the administration's policies.
While Israeli officials have long expressed concern about Iran, Netanyahu views the threat from Tehran as so acute that he is shaping Israel's policy toward the Palestinians around that issue -- a shift in approach that effectively puts Palestinian statehood after resolution of a complicated regional and international issue.
Netanyahu has compared Iran's regional ambitions to Germany's in 1938 and has assembled a government that shares his view. Netanyahu's national security adviser, Uzi Arad, has publicly urged the United States to take stronger action against the Islamic state and has equated diplomatic engagement with Iran to "appeasement."
Obama and Netanyahu are expected to meet in Washington next month. In the intervening weeks, the Israeli prime minister, who took office late last month, is developing his proposals for how to proceed and appears to be bracing for a tough discussion with the president.
"Netanyahu is expecting that when he says, 'Iran, Iran, Iran,' Obama will say, 'Palestine, Palestine, Palestine' back," said Martin Indyk, director of the Saban Center for Middle East Policy at the Brookings Institution and a former peace negotiator who keeps in close contact with U.S. and Israeli officials. "Netanyahu expects Obama to say that in order to be effective with Iran, we need to manage the Palestinian track as well."
With the Palestinian leadership split between the West Bank and the Gaza Strip and Netanyahu's right-leaning coalition generally opposed to negotiating a peace deal that would result in a Palestinian state, the Israeli government is expected to offer few, if any, concessions to the Palestinians. Meanwhile, Netanyahu's aides argue, Iran poses a much more immediate threat.
"Realistically, we need to keep Iran at bay," Ayalon said, and until that happens, the Israeli government will largely limit itself to matters such as trying to improve the Palestinian economy and strengthen its civil institutions. "The Iranian clock should be measured in months," he said in reference to Israel's view that the Islamic republic is approaching the ability to make a nuclear weapon. By contrast, the timetable on Palestinian statehood "is open-ended."
Iran, which unlike Israel has signed the Non-Proliferation Treaty, has insisted it has a right to peacefully develop nuclear power and is not developing nuclear weapons capability. Israel is widely believed to possess nuclear weapons, though it does not publicly acknowledge having the capability.
In an unusual confluence of interests, Netanyahu's insistence on the importance of Iran -- and wariness of the American outreach to Tehran -- is also shared in many Arab capitals, according to U.S., Israeli and Arab officials. Mitchell has told Jewish groups he was surprised at how often Arab leaders brought up Iran during his initial trip to the region after being named special envoy.
In recent days, Egypt has arrested a cell of the Iranian-funded Shiite Muslim militia Hezbollah that was suspected of planning attacks on Egyptian soil and smuggling weapons and attackers into Israel. During the war between Israel and Hamas this year, Hezbollah leader Hasan Nasrallah called for the ouster of Egyptian President Hosni Mubarak after Egypt declined to open its border with Gaza to allow residents to flee the fighting. Egypt has recently bolstered anti-smuggling operations along that border, where networks of tunnels serve as a key conduit for the radical Islamist group Hamas, which is also supported by Iran.
Morocco has severed diplomatic ties with Iran, and Saudi Arabia has criticized Iran's efforts to influence the region -- signs of a long-standing enmity between the Arab world, which is predominantly Sunni Muslim, and the seat of the former Persian empire, which is majority-Shiite. The mistrust has been magnified by Iran's nuclear ambitions.
Arab nations "see a profound Iranian threat," the U.S. official said. "They see Iranian interventionism. They see the Iranian nuclear program. They want to be certain that what we are doing will affect the Iranians and will not come at their expense."
But, unlike the Netanyahu government, Arab nations are demanding that progress be made on the Palestinian front as well. Jordan's King Abdullah II met with Obama at the White House on Tuesday -- the first Arab leader to do so since Obama's inauguration -- to carry that message.
Afterward, Obama expressed hope that "over the next several months, that you start seeing gestures of good faith on all sides." He declined to offer details but added that "the parties in the region probably have a pretty good recognition of what intermediate steps could be taken as confidence-building measures."
Palestinian leaders are already concerned that the Israeli government will use any delay in statehood discussions to expand West Bank settlements and take other steps to undercut the makeup of a future Palestinian state, such as trying to diminish the Arab presence in East Jerusalem.
"Our issue is an issue on its own," said senior Palestinian negotiator Saeb Erekat. "We expect nothing short of a clear-cut statement supporting the two-state solution and to stop settlement activity."
Israeli analysts and Netanyahu's advisers say that while his focus on Iran may limit the likelihood of any near-term progress toward Palestinian statehood, it opens the door for a broader and more profound step forward if Obama and the Arab states agree with his view of Iran.
Netanyahu's approach "completely recalibrates expectations and understandings about where we really are," said Dan Diker, a senior foreign policy analyst at the Jerusalem Center for Public Affairs, a think tank that is close to the Netanyahu administration. "We can only address the region in the context of an ascendant Iran that is close to nuclear weapons and is destabilizing nearly every country in the Middle East."
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