Overview
Last week, Israeli Prime Minister Benjamin Netanyahu made a week-long visit to Washington to meet with President Trump and hold various meetings centered on the Middle Eastern security situation. The centerpiece of the visit was Netanyahu’s meeting with Trump in the Oval Office – Netanyahu became the first foreign leader invited to the White House in Trump’s second term – although he also met with Secretary of Defense Pete Hegseth, National Security Adviser Mike Waltz, and Congressional leaders including House Speaker Mike Johnson. The trip was an opportunity to reaffirm the personal friendship between Trump and Netanyahu, as well as key issues in the bilateral relationship ike the implementation of the Israel-Hamas ceasefire deal, the renewal of US weapons deliveries to Israel, the US withdrawal from the UN Humans Rights Committee and defunding of UNRWA, US policy on Iran, and Arab-Israel normalization.
Restarting the Trump-Netanyahu Relationship
The visit was Netanyahu’s third to the US since October 7, 2023, and it was his first meeting with President Trump at the beginning of his second term. The Trump administration rolled out the red carpet for Netanyahu, making the point that the Israeli PM is the first foreign leader meeting Trump in his second term, and housing the PM and his delegation at Blair House. It was important for Netanyahu to restart his relationship with Trump on positive footing: although the two leaders enjoyed a very close relationship during President Trump’s first term, relations soured when Trump lost the US election in 2020 and was unforgiving when Netanyahu congratulated Biden on his victory. Last week, Trump seemed to have moved on, warmly welcoming Netanyahu, highlighting the strong US-Israel relationship, and announcing a new $1 billion military assistance package to Israel. Netanyahu on his part praised Trump for his strong support of Israel, calling him the “greatest friend Israel ever had in the White House.” The visit was not just an opportunity for a fresh start to the relationship between Trump and Netanyahu, but also for the two leaders and their teams to hold in-depth discussions on issues of substance, coordinating policies, narrowing gaps and setting expectations for the coming months.
Israel-Hamas Ceasefire
Before being sworn in as President for the second time, Trump and his Middle East advisor Steve Witkoff were involved in helping secure the Israel-Hamas hostage release-ceasefire deal. In his public remarks, Trump took great pride in his own role in getting to a deal and emphasized the need to continue implementing the agreement to get all the remaining hostages out of Gaza. Trump’s advisor Witkoff also stressed at every opportunity the importance of continued implementation of the deal-all three phases, noting the Administration will not take its “foot off the pedal” until all hostages are released.
This determined US approach is not necessarily aligned with PM Netanyahu’s thinking. The Israeli government signed the deal and committed to implementing it, but as the implementation of phase one continues, Netanyahu is under pressure by his far-right coalition partners to return to fighting at the end of the first phase, a move that may lead to the collapse of the entire deal. Netanyahu is trying to keep both Trump and the Israeli far-right content but it is not clear if that is possible. The images of the returning hostages have contributed to strong support of the deal among a majority of Israelis, who have increasingly valued stability over further gains over Hamas, but Netanyahu is not willing defy his coalition partners yet. It remains to be seen if and how much pressure Trump and Witkoff will be willing to place on Netanyahu not to sabotage the deal.
The two-sides seemed to be in agreement, at least, on not allowing Hamas to remain in control of Gaza on the day after, but while Netanyahu may be planning to resume the war after phase one, the Trump Administration currently wants to see the deal fully implemented with Israel having time after that to defeat Hamas.
Trump’s Proposal to Evacuate Gaza
President Trump’s bombshell proposal to relocate “all” Gazans to Arab countries and have the US “take over” the Gaza Strip took Netanyahu and his team (not to mention international observers) by surprise. Describing Gaza as the future “Riviera of the Middle East” after it is “cleaned out” added to the puzzlement of many.
Netanyahu seemed genuinely surprised by Trump’s comments. Prior to the visit, Trump stated he plans to ask Jordan and Egypt to accept Gazans into their territory, but the plan and details he presented at the press conference, stating future US ownership of Gaza, were not coordinated with Israel. Nevertheless, Netanyahu responded that Trump’s plan provides “fresh thinking,” and later spoke of it as a great idea, which should be capitalized on. Netanyahu immediately identified the opportunity to market Trump’s plan to his right-wing base and far-right coalition partners back home as a great achievement, which shines light on the Israeli right’s thinking, although Netanyahu himself never presented such a plan, let alone in such detailed terms.
In the days following Trump’s initial comments, which deeply angered the Arab world, messaging out of the White House was confused. Administration officials tried placing Trump’s comments in a broader context, explaining that he did not mean US occupation of Gaza nor deploying US troops there, but rather a leading role for the US in the reconstruction of the enclave. Further, they said, the evacuation of Gaza would be temporary and voluntary, with Gazan right of return remaining intact. In a later interview, however, the president contradicted his advisers’ clarifications, stating Palestinians in Gaza would not have a right to return under his plan for US ownership of Gaza, as he plans to build “safe communities” for them elsewhere, and continues to double down on his intention to pressure Egypt and Jordan to accept many of the Gazans that will be evacuated/removed. Needless to say, Arab partners have reacted strongly to the plan, sharply condemning any plan that does not account for a future Palestinian state and refusing to host refugees themselves. The plan, if the White House continues to pursue it, could have serious ramifications for the US’ regional relationships, from growing economic partnership with the Arab Gulf states to longstanding security cooperation with Egypt and Jordan.
Policy on Iran
On the eve of the visit, Netanyahu and his advisers were pushing to secure strong commitments from Trump on the use of force in dealing with Iran’s nuclear program. Trump’s comments were viewed with disappointment by the Israeli side. While the President announced the reimposition of “maximum pressure” on Iran, he stopped short of making a public commitment that the US would attack Iran. On the contrary, while cautioning Iran from getting a nuclear bomb, he stated he “would love to be able to make a great deal” under which Iranians can “get on with their lives.” Publicly, Netanyahu stated several times during the visit that the US and Israel see eye to eye want needs to be done vis-a-vis Iran, but in reality there are gaps between Washington and Jerusalem on this issue.
Arab-Israeli Normalization
Both leaders addressed the importance of strengthening the Abraham Accords, considered one of Trump’s major achievements during his first term. Ahead of the visit there were wide expectations that Trump will be pushing for a Saudi-Israeli normalization deal early in his second term. Nevertheless, while Netanyahu spoke of more countries that will likely join the Accords, it was clear that Trump’s Gaza evacuation plan is angering Arab countries, including Saudi Arabia, and that in such circumstances it will be difficult to advance a deepening and widening of the Accords. Saudi Arabia in particular (long considered a potential crowning achievement of the Abraham Accords as a regional heavyweight and the moral leader of the Muslim world) was thought to have been moving closer to normalization ahead of the October 7 attack on Israel, but was likely seeking concessions on Palestine that will be impossible while Israel is actively at war with Hamas. Nonetheless, it is clear the Administration will be looking for ways to bring on board additional countries.
US Arms Sales to Israel
A $1 billion US arms sales package to Israel was announced during the visit, lifting the partial freeze that the Biden administration had placed on Israeli purchases amid humanitarian concerns.
The package includes 4700 thousand pound bombs, as well as armed bulldozers. The administration also announced it is lifting the hold placed by the Biden White House on two-thousand pound bombs. Israel expressed great appreciation over the decision and in the aftermath of the Trump-Netanyahu meeting, the administration notified Congress that it plans to sell Israel more than $7 billion in weapons in the coming months, including thousands of bombs and missiles.
Implications for Global Geopolitics and Business
The aftermath of the Trump-Netanyahu summit reveals a mixed picture for the international community and global markets. Israeli ceasefires with Hamas and with Lebanese Hizballah have resulted in welcome relative regional stability, including for global logistics (Houthis have paused or reduced Red Sea shipping attacks) and energy market stability. Geopolitically, Iranian capabilities are much degraded, with limited proxy reach in former captive regions – a positive for Israel, the US and other regional partners, although some assess that Iran is being driven towards more reckless nuclear enrichment. However, it is clear that regional peace is far from set in stone: Netanyahu is being pulled in multiple directions on the Hamas ceasefire, and while the US is evidently in support of implementing the ceasefire for now, its suggestion of relocating Gazans could be deeply destabilizing. While many risks are on pause as Israel and Hamas continue to execute the ceasefire, the state of affairs is fragile – and geopolitical risks for individuals, governments and business could ramp up at any moment. If the conflict does reignite, global businesses will face significant operating challenges as regional logistics once again become challenging, and violence spillover could once again threaten or cause jitters in the global energy market.
