ISPI - 22 May 2025 - Israel: When Domestic and Foreign Policy Blur Too Much Sara Isabella Leykin

 ISPI 

22 May 2025

Israel: When Domestic and Foreign Policy Blur Too Much

Sara Isabella Leykin 

In Israel, more than in other countries, foreign policy decisions have historically been shaped by domestic political dynamics and national security needs. Today, this overlap is more evident than ever.

Commentary Middle East and North Africa

In a famous 1976 quote, US Secretary of State Henry Kissinger stated that “Israel does not have a foreign policy, only a domestic one.” This statement aptly describes how, in Israel, more than in other countries, foreign policy decisions have historically been and continue to be shaped by domestic political dynamics and national security needs. Today, this overlap is more evident than ever. October 7, 2023, marks a watershed moment for Israel, not only because of the tragic events and the profound shock it inflicted on Israeli society, but also because it accelerated domestic political trends that had been unfolding in recent years. A a result, Israel’s regional projection has become increasingly entangled with internal politics, the fragile balance of the governing coalition, and the personal vicissitudes of the prime minister. Domestic pressures to continue the war in Gaza at any cost are eroding the gains Israel has achieved over decades in its regional relations, ultimately jeopardizing the very security the country seeks.

Israel in the region before October 7: Between regional ambitions and extremist drifts

Prior to October 7, Israel had embarked on a clear course of regional repositioning. After decades of isolation, surrounded by hostile countries and distant allies, the country had gradually opened up to diplomatic normalisation with the signing of the Abraham Accords in 2020 with the United Arab Emirates (UAE), Bahrain, Morocco, and Sudan (2021). The agreement marked a milestone in Tel Aviv’s political and economic integration into the region. At the same time, even countries with historically turbulent relations with Israel, such as Turkey since 2010, have reopened diplomatic channels, highlighting a broader regional reshaping. In this context, Saudi Arabia seemed to be the next logical step in Israel’s regional rapprochement: in the months leading up to October 7, the possibility of Riyadh joining the Abraham Accords had become increasingly realistic.

However, the victory of Benjamin Netanyahu in the October 2022 elections and the formation of a coalition with ultra-nationalist forces, Otzma Yehudit, and the Religious Zionist Party, led by Itamar Ben-Gvir and Bezalel Smotrich, raised tensions with several regional actors. Known for their anti-Arab positions and rejection of a Palestinian state, the two extremist leaders assumed key roles: Ben-Gvir as Minister of National Security, with authority over the Border Police active in the West Bank, and Smotrich as Finance Minister, with operational responsibility over the civilian administration of the occupied territories via a new Settlements Administration under his control. Ideologically convinced that the West Bank and Gaza belong to biblical Israel, both have pushed for annexation policies, including settlement expansion, recognition of illegal outposts, and strengthening infrastructure between settlements. In January 2023, newly appointed Minister Ben-Gvir’s visit to the al-Aqsa compound in Jerusalem was perceived as a provocation and a threat to the status quo of holy sites and to Palestinians, leading to condemnation from several regional countries. Among them were the UAE, which cancelled a planned official visit by Netanyahu the following week in protest. In the following months, Arab countries continued to issue frequent condemnations of actions by Israeli government members, especially during tensions around Ramadan 2023. Morocco decided to cancel the Negev Forum, repeatedly postponed due to escalating Israeli-Palestinian tensions and concerns over the extremist nature of Netanyahu’s new government. Despite rising tensions, Saudi Arabia nonetheless continued negotiations with the Israeli government over diplomatic normalisation, though Riyadh made recognition of Israel contingent upon the establishment of a Palestinian state.

Netanyahu and coalition pressures: Why Israel won’t relent in Gaza

Until October 7, the primary focus of the far-right parties in Israel’s government was the occupation and annexation of the West Bank. The outbreak of war in Gaza shifted attention to the Strip. For Netanyahu’s most radical allies, the possibility of annexing Gaza and resuming the settlement project became an opportunity to advance their most extreme ideologies. To push their agendas, Smotrich and Ben-Gvir repeatedly threatened to leave the coalition, which, with a fragile 68-seat majority out of 120, would collapse without their support. For Netanyahu, this poses a serious risk: new elections could penalise governing parties given rising domestic opposition, making it difficult to form a new majority. Moreover, losing the premiership would accelerate his pending legal trials. As a result, the continuation of the conflict has become a means of ensuring political survival.

These threats materialised on January 18, 2025, when Ben-Gvir left the coalition in protest after Israel signed the ceasefire with Hamas. At the same time, Smotrich conditioned his continued support on blocking the second phase of the deal. Internal tensions and Netanyahu’s fear of losing far-right support stalled progress on the second phase of the ceasefire, and on March 18 Israel resumed bombing Gaza. Ben-Gvir then rejoined the coalition, restoring its majority.

Reactions from Israel’s regional allies

Against this backdrop, Israel’s persistence in pursuing the war in Gaza is increasingly straining its regional relationships. Though none of the countries that signed peace treaties or normalisation agreements –Jordan, Egypt, Morocco, the UAE, and Bahrain—have severed ties with Israel due to key economic and security interests, political relations are suffering under the weight of the devastating war. With the UAE, economic relations have continued to flourish, as trade grew by 11% from 2023 to 2024, while political ties have cooled, at least on the surface, with official interactions now carried out discreetly and away from the public eye. Moreover, recently, Abu Dhabi refused to financially support Israel’s humanitarian aid plan for Gaza, deeming it inadequate to address the crisis, as seen with the Israeli-sponsored aid plan in early May. Jordan, while maintaining economic cooperation (particularly regarding Israeli natural gas exports, which rose by 13.4% in 2024 after a brief halt), has taken a critical political stance: Amman recalled its ambassador from Tel Aviv as a diplomatic protest, and Foreign Minister Ayman Safadi repeatedly accused Netanyahu’s government of war crimes in Gaza. Even with Egypt – a key mediator alongside Qatar for a truce between Israel and Hamas – relations have grown more strained. Tensions peaked in January after Israel accepted a proposal from President Trump to resettle Gaza’s residents in Egypt and Jordan, which Cairo strongly opposed. Egypt presented an alternative plan in March, but Israel rejected it. Among countries that have taken a strong stand against Israel is Turkey, which last year imposed a total trade embargo on Tel Aviv. The war in Gaza has also frozen the normalisation process with Saudi Arabia, reinforcing the country’s stance that a Palestinian state must be established.

Netanyahu’s determination to pursue the war at all costs is beginning to prove counterproductive also in relations with the United States. Trump’s election to the White House had initially promised a renewed, assertive U.S. backing of Israel after the more cautious Biden administration. However, Trump’s recent tour of Saudi Arabia, Qatar, and the UAE – without a stop in Israel– highlighted a growing US-Israel divergence over Gaza. After advancing controversial proposals such as the resettlement of Palestinians and the commercial development of Gaza–plans quickly embraced by Israel’s radical right– Trump appears to be acknowledging the difficulty of resolving the conflict and the need to end the war, no longer offering unconditional support to Israeli military operations. This shift adds to Netanyahu’s dilemma, torn between the pressures of far-right parties and a new regional reality in which Israel finds itself increasingly isolated.

Israel, hostage to itself

Domestic dynamics are currently steering Israel’s political direction away from its national interest, subordinating policy to personal power struggles and the maintenance of a fragile coalition. The result is a foreign policy held hostage by particular interests, diplomacy stymied by the incendiary rhetoric of radical ministers, and a gradual erosion of Israel’s credibility in the eyes of regional and international partners. In an already deeply unstable context marked by war and insecurity, this political drift threatens not only the prospects for peace, but Israel’s very security itself.