Israel pins hopes on American sanctions against Iran

Prime Minister Benjamin Netanyahu and Defense Minister Avigdor Liberman pin their hopes on the American sanctions against Iran to destabilize the Tehran regime and force it to renegotiate the nuclear agreement.

al-monitor US President Donald Trump and Israeli Prime Minister Benjamin Netanyahu hold a bilateral meeting during the 73rd session of the United Nations General Assembly at UN headquarters in New York, Sept. 26, 2018.  Photo by REUTERS/Carlos Barria.
Ben Caspit

Ben Caspit


Topics covered


Nov 9, 2018

Israel views the renewed US sanctions imposed against Iran on Nov. 2 as nothing less than a historic event. Given the complex situation on its northern front, Israel is increasingly pinning its hopes on the sanctions to sever the lifeline of Iran’s economy. Israel had apparently lost the battle against Iran’s entrenchment in Syria through no fault of its own. On the other hand, Israel now hopes to win the war against the Iranian regime, its nuclear program and continued sponsorship of regional terrorism. The sanctions are a nonconventional weapon designed to help it achieve this existential goal.

Prime Minister Benjamin Netanyahu has been closely monitoring the renewed sanctions imposed by the Donald Trump administration. When the previous round of sanctions was imposed in August, Netanyahu hailed the move, praised Trump and urged Europe to join the American sanctions regime. This week, on Nov. 5, he told the Knesset, “This day is a historic day. This is the day on which the United States, led by President Trump, imposed the most severe sanctions on Iran since the beginning of the effort to stop its aggression.”

According to Netanyahu, “We see the impact of these sanctions on the ground right now” with cuts in Iran’s funding of its proxies and allies. He pointed specifically to the new sanctions that include the international SWIFT banking clearing system used by the Iranian regime, saying it would “add a very severe blow to Iran's terrorist regime. I believed that sanctions must include this element of credit clearance. I raised this several times, even during my last meeting with US Treasury Secretary Steven Mnuchin, and I am pleased that the US has decided to include the credit component.”

Israel has been closely monitoring developments in Iran, especially the regime’s attempts to survive the sanctions. Unlike the days of former US President Barack Obama's administration, when Israel was kept out of the room where crucial decisions were made on such issues, this administration is working in tandem and close cooperation with Israel. The chief of Israel’s Mossad agency, Yossi Cohen, provides the Americans with weekly intelligence reports in order to spur them into action and prove that their sanctions are having the desired impact on Iran and the Middle East.

The Israeli assessment conveyed to members of the government’s security Cabinet is that the continuation of sanctions and the deterioration of the Iranian economy might bring Iran back to the negotiating table. Thus, the 2015 deal with world powers on the Iranian nuclear program could be reopened and improved. Israel hopes that negotiations will yield limitations on Iran to curb its ballistic missile program and the spread of regional terrorism. “If the Iranians have to choose between total collapse and perhaps the fall of the ayatollah's regime on the one hand and a new compromise with the US and the West, they will not hesitate to go for the second option,” a senior Israeli intelligence specialist recently told Al-Monitor on condition of anonymity. “They already did it with the Iran-Iraq War. The regime’s survival tops their priorities ahead of the nuclear program and spread of the Islamic Revolution.”

Next week, the government’s intelligence agencies will conduct their first assessment of the renewed sanctions and their impact. In addition to sensitive intelligence material, the experts will also review the exchange rate of the Iranian rial, the inflation level, the cost of basic goods and the extent of civil unrest. The top echelons of government in Israel seem to be following the state of the Iranian economy far more intensely than they follow the Israeli one.

“They were dealt a tough blow this week,” Defense Minister Avigdor Liberman told Al-Monitor, adding, “This could have an immediate effect on their ability to fund terrorism.” Liberman further explained: “Iran invests about $2.5 billion annually in spreading terrorism. It funds 80% of the budget of Hezbollah — between $500 and $800 million annually. It supplies the entire budget of the Islamic Jihad organization in the Gaza Strip, about 40% of the Hamas budget, as well as bankrolling the Houthi rebels in Yemen and the Shiite militias in Syria. The sanctions could reduce the extent of this support significantly and bring Iran back to the negotiating table."

Israeli intelligence assessments distinguish between the 2009 rioting in Iran — dubbed at the time the “Green Revolution” — and the current state of play. “That was a political uprising,” one intelligence source told Al-Monitor on condition of anonymity. “Now, the unrest is civil in nature, fueled purely by economic circumstances. The regime understands that it is in trouble and at this rate will not be able to keep its citizens’ heads above water for long. The question is what direction they will choose. They could return to the negotiating table, but they could also try for a breakthrough in their nuclear program in order to achieve the status of North Korea, with which no one messes.”

A while back, Liberman saw a report on France24 television about Iran’s health care system. He was astounded. “It was a 12-minute report on what goes on there in the health care system,” he told Al-Monitor. “They interviewed a retiree who was a teacher all his life and now cannot buy medicine for one of his daughters," he said. Liberman summoned the heads of the intelligence services, including the head of the research division of Military Intelligence, and asked them to watch the report. “Sometimes you find the most important intelligence in everyday life,” he said.

The actions Israel took to counter the Iranian entrenchment in Syria in recent years have dropped off the radar screen almost completely. Netanyahu is still waiting for a meeting with Russian President Vladimir Putin. Following extensive efforts, the sides agreed that the two leaders would meet on the sidelines of the Nov. 11 conference in Paris marking the centenary of the end of World War I, but then Netanyahu went and boasted that Israel was continuing to attack in Syria and the Russians canceled the meeting.

Behind closed doors, Israel understands that its campaign against the Iranian entrenchment is no longer viable. Despite the daring, the significant achievements and the blows Israel dealt Iran over the past two years in Syria, it cannot keep blocking Iran’s expansion for long. It also will be unable to stop the “Precision Project” designed to turn thousands of rockets and missiles in Hezbollah’s arsenals into precision munitions constituting a strategic threat against Israel.

All that Israel can do now is to give up the battle in Syria and focus on its war with Iran. Right now, Israel is standing in the bleachers cheering on the US sanctions while closely monitoring the decline of the Iranian economy. In Tehran, Jerusalem and Washington, everyone understands that crunch time is near.

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