U.S.-Israel defense, diplomatic, and economic cooperation has been close for decades, based on common democratic values, religious affinities, and security interests. On May 14, 1948, the United States was the first country to extend de facto recognition to the state of Israel. Subsequently, relations have evolved through legislation, bilateral agreements, and trade. U.S. officials and lawmakers often consider Israel's security as they make policy choices in the Middle East. Congress provides military assistance to Israel and has enacted other legislation in explicit support of its security. Such support is part of a regional security order—largely based on U.S. arms sales to Israel and Arab countries—that has avoided major Arab-Israeli interstate conflict for about 45 years. Some Members of Congress have occasionally authorized and appropriated funding for programs benefitting Israel at a level exceeding that requested by the executive branch. Other Members have sought greater scrutiny of some of Israel's actions. Iran continues to be a top Israeli security concern. Israel has sought to influence U.S. policy on Iran, and supported the Trump Administration's May 2018 withdrawal from the Iranian nuclear agreement. In recent years, Israel and Arab Gulf states have discreetly cultivated closer relations with one another in efforts to counter Iran. As Iran-backed groups have been successful in helping Syria's government regain effective control of the country, Israel has conducted a number of airstrikes targeting these groups. Israeli officials consider an indefinite Iranian presence in Syria to be a serious security threat exacerbating the threat already posed by Hezbollah in Lebanon, and have vowed to prevent it. As a result, Israel's relationship with Russia, which cooperates with Iran in Syria and hosts advanced air defense systems there, has become more important. Israel also remains threatened by Hamas and other terrorist groups in the Gaza Strip while considering ways to work on Gaza's difficult humanitarian and security situation with neighboring Egypt and a wide range of actors. In the Israeli-Palestinian conflict, political disputes persist over key issues including security parameters, Israel-West Bank borders, Jewish settlements, Palestinian refugees, and the status of Jerusalem. Polls suggest wide skepticism among the Israeli public about prospects for a negotiated end to the conflict. Contentious domestic politics for both Israelis and Palestinians make it difficult for them to make diplomatic concessions, particularly in a climate where questions surround the continued leadership of Prime Minister Netanyahu (see " Corruption Allegations Involving Netanyahu " below) and Palestine Liberation Organization (PLO) Chairman and Palestinian Authority (PA) President Abbas. Possibly complicating the situation further, President Trump recognized Jerusalem as Israel's capital in December 2017 and the Administration moved the U.S. embassy from Tel Aviv to Jerusalem in May 2018. The Trump Administration may be contemplating a diplomatic proposal aimed at restarting Israeli-Palestinian negotiations with the support of the Arab states that Israel has been discreetly cooperating with against Iran. Israelis debate how their leaders should prioritize options such as participating in diplomatic initiatives, preserving the current facts on the ground, and acting unilaterally to influence outcomes. Israeli leaders and significant segments of Israeli civil society regularly emphasize the importance of closeness with the United States. Yet, a number of geopolitical factors distinguish Israel from other developed countries, including the regional threats it faces, its unique historical experience, and its population's relatively higher level of direct military service. The quest for a modern Jewish homeland can be traced to the publication of Theodor Herzl's The Jewish State in 1896. Herzl was inspired by the concept of nationalism that had become popular among various European peoples in the 19 th century, and was also motivated by European anti-Semitism. The following year, Herzl described his vision at the first Zionist Congress, which encouraged Jewish settlement in Palestine, the territory that had included the Biblical home of the Jews and was then part of the Ottoman Empire. During World War I, the British government issued the Balfour Declaration, supporting the "establishment in Palestine of a national home for the Jewish people." Palestine became a British Mandate after the war and British officials simultaneously encouraged the national aspirations of the Arab majority in Palestine, insisting that its promises to Jews and Arabs did not conflict. Jews immigrated to Palestine in ever greater numbers during the Mandate period, and tension between Arabs and Jews and between each group and the British increased, leading to periodic clashes. Following World War II, the plight of Jewish survivors of the Holocaust gave the demand for a Jewish home added urgency, while Arabs across the Middle East concurrently demanded self-determination and independence from European colonial powers. In 1947, the United Nations General Assembly developed a partition plan (Resolution 181) to divide Palestine into Jewish and Arab states, proposing U.N. trusteeship for Jerusalem and some surrounding areas. The leadership of the Jewish Yishuv (or polity) welcomed the plan because it appeared to confer legitimacy on the Jews' claims in Palestine despite their small numbers. The Palestinian Arab leadership and the League of Arab States (Arab League) rejected the plan, insisting both that the specific partition proposed and the entire concept of partition were unfair given Palestine's Arab majority. Debate on this question prefigured current debate about whether it is possible to have a state that both provides a secure Jewish homeland and is governed in accordance with democratic values and the principle of self-determination. After several months of civil conflict between Jews and Arabs, Britain officially ended its Mandate on May 14, 1948, at which point the state of Israel proclaimed its independence and was immediately invaded by Arab armies. During and after the conflict, roughly 700,000 Palestinians were driven or fled from their homes, an occurrence Palestinians call the nakba ("catastrophe"). Many became internationally designated refugees after ending up in areas of Mandate-era Palestine controlled by Jordan (the West Bank) or Egypt (the Gaza Strip), or in nearby Arab states. Palestinians who remained in Israel became Israeli citizens. The conflict ended with armistice agreements between Israel and its neighboring Arab states: Egypt, Jordan, Lebanon, and Syria. The territory controlled by Israel within these 1949-1950 armistice lines is roughly the size of New Jersey. Israel has engaged in further armed conflict with neighbors on a number of occasions since then—most notably in 1956, 1967, 1973, and 1982. Since the 1950s, Israel also has dealt with the threat of Palestinian guerrilla or terrorist attacks. In 1979, Israel concluded a peace treaty with Egypt, followed in 1994 by a peace treaty with Jordan, thus making another multi-front war less likely. Nevertheless, as discussed throughout the report, security challenges persist from Iran and groups allied with it, and from other developments in the Arab world. Israel is a parliamentary democracy in which the prime minister is head of government (see textbox below for more information) and the president is a largely ceremonial head of state. The unicameral parliament (the Knesset) elects a president for a seven-year term. The current president, Reuven Rivlin, took office in July 2014. Israel does not have a written constitution. Instead, Basic Laws lay down the rules of government and enumerate fundamental rights. Israel has an independent judiciary, with a system of magistrates' courts and district courts headed by a Supreme Court. The political spectrum is highly fragmented, with small parties exercising disproportionate power due to the relatively low vote threshold for entry into the Knesset (3.25%), and larger parties needing small-party support to form and maintain coalition governments. Since Israel's founding, the average lifespan of an Israeli government has been about 23 months. In 2014, however, the Knesset somewhat tightened the conditions for bringing down a government. Israeli society and politics have evolved. In the first decades following its founding, Israeli society was dominated by secular Ashkenazi (Eastern European) Jews who constituted the large majority of 19 th - and early 20 th -century Zionist immigrants. Many leaders from these immigrant communities sought to build a country dedicated to Western liberal and communitarian values. From 1948 to 1977, the social democratic Mapai/Labor movement led Israeli governing coalitions. The 1977 electoral victory of Menachem Begin's more nationalistic Likud party helped boost the influence of previously marginalized groups, particularly Mizrahi (Eastern) Jews who had immigrated to Israel from Arab countries and Iran. This electoral result came at a time when debate in Israel was intensifying over settlement in the territories occupied during the 1967 Arab-Israeli War. Begin and his successor in Likud, Yitzhak Shamir, helped drive the political agenda over the following 15 years. Although Labor under Yitzhak Rabin later initiated the Oslo peace process with the Palestinians, its political momentum slowed and reversed after Rabin's assassination in 1995. Despite Labor's setbacks, its warnings that high Arab birth rates could eventually make it difficult for Israel to remain both a Jewish and a democratic state while ruling over the Palestinians gained traction among many Israelis. In this context, Prime Minister Ariel Sharon, a longtime champion of the Israeli right and the settlement movement, split from Likud and established Kadima as a more centrist alternative in 2005. He was succeeded as Kadima's leader and prime minister by Ehud Olmert in 2006. Likud returned to power in 2009 with Netanyahu as prime minister (he had previously served in the position from 1996 to 1999). Since then Netanyahu has led two additional coalitions following elections in 2013 and 2015. The enduring appeal of Netanyahu and right-of-center parties to Israeli voters in recent years may stem from a number of factors, including Arguments by some that Palestinians have rejected peace and that Israeli military withdrawals from southern Lebanon (in 2000) and the Gaza Strip (in 2005) emboldened Hezbollah and Hamas and contributed to subsequent conflict. The influence of distinct religious, ethnic, or ideological groups, such as Russian speakers who emigrated from the former Soviet Union in the 1990s, and citizens aligned with the "national religious" (modern Orthodox) movement. Both groups skew toward the political right and include many of the biggest supporters of settlements. Given the fragmentation of Israeli political parties under its electoral system, compromise among diverse groups is a necessity for forming and maintaining a governing coalition. As mentioned above, the system generally gives smaller parties disproportionate influence on key positions they espouse. For example, Netanyahu relies on support from two Haredi (ultra-Orthodox Jewish) parties that are generally aligned with the other right-of-center parties on national security issues, but make specific demands (i.e., subsidies and military exemptions to support traditional lifestyles) in exchange for their backing. Such support is largely anathema to secular Israeli middle class voters, many of whom would prefer that government resources be used to benefit a broader cross-section of Israelis. Also, many Arab Israelis, who make up nearly 20% of the population, are largely separate from Jewish Israeli citizens in where and how they live, are educated, and otherwise socialize. Arab Israeli citizens generally identify more closely with left-of-center parties. However, left-of-center parties face increased difficulty in forming governing coalitions because no Arab party has ever been part of a one. Israeli Prime Minister Binyamin Netanyahu presides over a coalition government that includes six parties generally characterized as right of center (see Appendix A ). The varying interests of the coalition's members and some intra-party rifts contribute to difficulties in building consensus on several issues, including How to strengthen Israel's security and protect its Jewish character while preserving rule of law and freedom of expression for all citizens. How to promote general economic strength while addressing popular concerns regarding economic inequality and cost of living. The Israeli police recommended in February 2018 that Attorney General Avichai Mandelblit indict Prime Minister Netanyahu for bribery, fraud, and breach of trust. Mandelblit may decide in 2019 whether to press charges. In response to the police recommendations, Netanyahu—who has consistently denied the allegations—said that the recommendations "will end with nothing" and that he will stay in office to pursue Israel's well-being. However, they could threaten Netanyahu's position as prime minister. The recommendations cover two specific cases. One Israeli media source has summarized them as follows: In Case 1000, Netanyahu and his wife are alleged to have received illicit gifts from billionaire benefactors, most notably the Israeli-born Hollywood producer Arnon Milchan, totaling NIS 1 million ($282,000). In return, Netanyahu is alleged by police to have intervened on Milchan's behalf in matters relating to legislation, business dealings, and visa arrangements. Case 2000 involves a suspected illicit quid pro quo deal between Netanyahu and Yedioth Ahronoth publisher Arnon Mozes that would have seen the prime minister weaken a rival daily, the Sheldon Adelson-backed Israel Hayom, in return for more favorable coverage from Yedioth. Later in February, developments in ongoing investigations appeared to implicate Netanyahu or his close associates in additional instances of alleged corruption. One case deals with possible overtures made to a judge about quashing an investigation of Netanyahu's wife Sara in exchange for the judge's appointment as attorney general, and another deals with possible actions to enrich a telecom magnate in expectation of favorable media coverage. In June 2018, Sara Netanyahu was indicted, along with a former staffer from Netanyahu's office, for the fraudulent use of state funds. Legally, Netanyahu could continue in office if indicted, but he could face public pressure to resign, and his coalition partners could face public pressure to withdraw their support for the government. Israel's previous prime minister, Ehud Olmert, announced his decision to resign in July 2008 amid corruption-related allegations, two months before the police recommended charges against him. The Knesset has recently passed some notable legislation. In July 2018, it passed a Basic Law defining Israel as the national homeland of the Jewish people. Also in July, the Knesset voted to withhold funds from the Palestinian Authority to "penalize it for paying stipends to Palestinian prisoners in Israel, their families and the families of Palestinians killed or wounded in confrontations with Israelis." Another bill passed in July permits single women to be surrogate parents, but does not extend the same permission to single men or same-sex couples. Additionally, controversial legislation has passed to apply some aspects of Israeli law to settlements in the West Bank, and is pending to limit the Supreme Court's power of judicial review over legislation. Several of the government's opponents and critics have voiced warnings that these and other initiatives may stifle dissent or undermine the independence of key Israeli institutions such as the media, the judiciary, and the military. Some government policies in the domestic sphere are the subject of contention. For example, in 2017, the government suspended a decision it had previously made to allow for a mixed-gender prayer space in the Western Wall plaza in Jerusalem's Old City. According to Netanyahu, the government is reviewing the issue and plans to suggest another approach. Another issue has been Israeli government policy regarding African migrants who have reached Israel. The policy has fluctuated, partly based on rulings from Israel's Supreme Court. Considerable international criticism had centered on government proposals—which have since been scrapped—to forcibly deport some migrants to third countries (Rwanda and Uganda). Early elections could happen (legally, elections are required in the second half of 2019) if the governing coalition splits over the cases against Prime Minister Netanyahu or some other issue. If early elections take place, Netanyahu (if he runs) could face challenges from figures on the right of the political spectrum (including Education Minister Naftali Bennett and Defense Minister Avigdor Lieberman), or nearer the center or left (former finance minister Yair Lapid, Labor Party leader Avi Gabbay, and retired generals Gabi Ashkenazi and Benny Gantz). Reportedly, Netanyahu may call for elections before the attorney general decides on whether to bring criminal charges against him, in hopes of claiming a popular mandate to continue in office even if he is indicted. Israel has an advanced industrial, market economy in which the government plays a substantial role. Despite limited natural resources, the agricultural and industrial sectors are well developed. The engine of the economy is an advanced high-tech sector, including aviation, communications, computer-aided design and manufactures, medical electronics, and fiber optics. Israel still benefits from loans, contributions, and capital investments from the Jewish diaspora, but economic strength has lessened its dependence on external financing. Israel's economy is experiencing a period of moderate growth (between 2.5% and 4% annually since 2014). While International Monetary Fund (IMF) growth projections for Israel remain close to 3% over the next five years, the Economist Intelligence Unit projects average growth of 3.8% through 2022 over much of that time due to expectations of greater domestic consumption and exports. For information on prospective natural gas exports, see CRS Report R44591, Natural Gas Discoveries in the Eastern Mediterranean , by [author name scrubbed]. Although Israel's overall macroeconomic profile and fiscal position appears positive, the country has the highest relative poverty level and the sixth-highest income inequality level within the 37-country Organisation of Economic Cooperation and Development (OECD). Poverty and inequality particularly disadvantage Arab Israelis and Israeli Haredim (ultra-Orthodox Jews). Israel relies on a number of strengths, along with discreet coordination with Arab states, to manage potential threats to its security and existence. Israel maintains conventional military superiority relative to its neighbors and the Palestinians. Shifts in regional order and evolving asymmetric threats have led Israel to update its efforts to project military strength, deter attack, and defend its population and borders. Israel appears to have reduced some unconventional threats via missile defense systems, reported cyber defense and warfare capabilities, and heightened security measures vis-à-vis Palestinians. According to estimates from IHS Jane's , Israel's military features total active duty manpower across the army, navy, and air force of approximately 180,000, plus 445,000 in reserve—numbers aided by mandatory conscription for most young Jewish Israeli men and women, followed by extended reserve duty. Israel's overall annual defense budget is approximately $16.4 billion, constituting about 4.6% of its total gross domestic product (GDP). Israel has a robust homeland security system featuring sophisticated early warning practices, thorough border and airport security controls, and reinforced rooms or shelters that are engineered to withstand explosions in most of the country's buildings. Israel also has proposed and partially constructed a national border fence network of steel barricades (accompanied at various points by watch towers, patrol roads, intelligence centers, and military brigades) designed to minimize militant infiltration, illegal immigration, and smuggling from Egypt, Syria, Lebanon, Jordan, and the Gaza Strip. Israel is not a party to the Nuclear Nonproliferation Treaty (NPT) and maintains a policy of "nuclear opacity" or amimut . A 2017 report estimated that Israel possesses a nuclear arsenal of around 80-85 warheads. The United States has countenanced Israel's nuclear ambiguity since 1969, when Israeli Prime Minister Golda Meir and U.S. President Richard Nixon reportedly reached an accord whereby both sides agreed never to acknowledge Israel's nuclear arsenal in public. Israel might have nuclear weapons deployable via aircraft, submarine, and ground-based missiles. No other Middle Eastern country is generally thought to possess nuclear weapons. Israeli officials closely consult with U.S. counterparts in an effort to influence U.S. decisionmaking on key regional issues. Israel's leaders and supporters routinely make the case to U.S. officials that Israel's security and the broader stability of the region remain critically important for U.S. interests. They also argue that Israel has multifaceted worth as a U.S. ally and that the Israeli and American peoples share core values. See Appendix B for selected U.S.-based interest groups relating to Israel. The United States and Israel do not have a mutual defense treaty or agreement that provides formal U.S. security guarantees. Iran remains of primary concern to Israeli officials largely because of (1) Iran's antipathy toward Israel, (2) Iran's broad regional influence, and (3) the possibility that Iran will be free of nuclear program constraints in the future. As mentioned above, in recent years Israel and Arab Gulf states have discreetly cultivated closer relations with one another in efforts to counter Iran. Prime Minister Netanyahu has sought to influence U.S. decisions on the international agreement on Iran's nuclear program (known as the Joint Comprehensive Plan of Action, or JCPOA). He argued against the JCPOA when it was negotiated in 2015, and welcomed President Trump's May 2018 withdrawal of the United States from the JCPOA and accompanying reimposition of U.S. sanctions on Iran's oil and central bank transactions. In a September 2017 speech before the U.N. General Assembly, Netanyahu had called on the signatories of the JCPOA to "fix it or nix it." Then, a few days before President Trump's May announcement, Netanyahu presented information that Israeli intelligence operatives apparently seized in early 2018 from an Iranian archive. Netanyahu used the information, which purportedly describes past work by Iran on a nuclear weapons program, to express concerns about Iran's credibility and its potential to parlay existing know-how into nuclear-weapons breakthroughs after the JCPOA expires. Although concern about Iran and its nuclear program is widespread among Israelis, their views on the JCPOA vary. Netanyahu and his supporters in government have routinely complained that the JCPOA fails to address matters not directly connected to Iran's nuclear program, such as Iran's development of ballistic missiles and its sponsorship of terrorist groups. Media reports suggest that a number of current and former Israeli officials have favored preserving the JCPOA because of the limits it placed on Iranian nuclear activities for some time or these officials' doubts about achieving international consensus for anything stricter. Commentators speculate on the possibility that Israel might act militarily against Iranian nuclear facilities if Iran resumes certain activities currently stopped under the JCPOA. According to one analyst, one group of Israeli officials have preferred to keep the nuclear deal in place while focusing on pressing challenges in Syria, while another group (including Netanyahu) have favored seizing the opportunity to make common cause with the Trump Administration to pressure Iran economically and militarily. However, shortly after Netanyahu publicly presented the Iranian nuclear archive, he said in an interview that he was not seeking a military confrontation with Iran. A "shadow war" has developed between Israel and Iran over Iran's presence in Syria. In the early years of the Syria conflict, Israel primarily employed airstrikes to prevent Iranian weapons shipments destined for Hezbollah in Lebanon. Since 2017, with the government of Bashar al Asad increasingly in control of large portions of Syria's territory, Israeli leaders have expressed intentions to prevent Iran from constructing and operating bases or advanced weapons manufacturing facilities in Syria. The focus of Israeli military operations in Syria has expanded in line with an increasing number of Iran-related concerns there. Further exacerbating Israeli sensitivities, Iran-backed forces (particularly Hezbollah) have moved closer to the Israeli-occupied Golan Heights since late 2017 via actions against Syrian opposition groups. On February 10, 2018, Iranian personnel based at Tiyas air base in central Syria apparently sent an armed drone into Israeli airspace. A senior Israeli military source was quoted as saying, "This is the first time we saw Iran do something against Israel—not by proxy. This opened a new period." In May 2018, Prime Minister Netanyahu asserted that Iran had transferred advanced weaponry to Syria (weaponized drones, ground-to-ground missiles, anti-aircraft batteries) in recent months. He stated that Israel was "determined to block Iran's aggression" and that "we do not want escalation, but we are prepared for any scenario." Since the February 10 incident, Israel has reportedly struck Iranian targets on multiple occasions. The resulting exchanges of fire (including the downing of an Israeli F-16 during the February incident) and subsequent official statements from Israel, Iran, Syria, and Russia have highlighted the possibility that limited Israeli strikes to enforce "redlines" against Iran-backed forces could expand into wider conflict, particularly in cases of miscalculation by one or both sides. On May 10, according to the Israeli military, Iran's Islamic Revolutionary Guard Corps-Quds Force fired rockets at Israeli military positions in the Golan Heights, as retaliation against earlier Israeli strikes against Iranian targets in Syria. This triggered Israeli strikes in Syria on a larger scale than any Israeli operations there since the 1973 Yom Kippur War. Reportedly, Israel has since conducted some additional airstrikes in Syria, and on two separate occasions in July its military claimed that it shot down a Syrian drone and a fighter jet over the Golan Heights using Patriot missiles. Russia's advanced air defense systems in Syria could affect Israeli operations. To date, Russia does not appear to have acted militarily to thwart Israeli airstrikes against Iranian or Syrian targets. However, Russian officials' statements in response to Israeli actions in Syria since February have fueled speculation about Russia's position vis-à-vis Israel and Iran, given that Russia's military presence in Syria is protected by Iran-backed ground forces. Israeli officials reportedly continue to consult with Russian officials about deconflicting Israeli military operations in Syria and discussing ways to limit Iran's presence there. In May 2018, Russian Foreign Minister Sergei Lavrov called for the withdrawal of all non-Syrian forces from the southern border area "on a reciprocal basis." However, as of July, Hezbollah reportedly has been helping lead an offensive against rebels in southern Syria. In a press conference following his July 16 summit with President Trump, Russian President Vladimir Putin stated a desire to have the situation between Israel and Syria in the Golan Heights return to what it had been before Syria's civil war. Hezbollah has challenged Israel's security near the Lebanese border for decades—with the antagonism at times contained near the border, and at times escalating into broader conflict. Speculation persists about the potential for wider conflict and its regional implications. In recent years, Israeli officials have sought to draw attention to Hezbollah's weapons buildup—including reported upgrades to the range, precision, and power of its projectiles—and its alleged use of Lebanese civilian areas as strongholds. Previously during Syria's civil war, Israel reportedly provided various means of support to rebel groups in the vicinity of the Syria-Israel border in order to prevent Hezbollah or other Iran-linked groups from controlling the area. Increased conflict between Israel and Iran over Iran's presence in Syria raises questions about the potential for Hezbollah's Lebanon-based forces to open another front against Israel. In April 2018, Hezbollah leader Hassan Nasrallah said that an Israeli strike on Iranian targets at Tiyas air base was a "pivotal incident in the history of the region that can't be ignored" and a "historic mistake." Earlier that same day, Hezbollah's deputy leader Naim Qassem said that Hezbollah would not open a front against Israel from Lebanon, but that it was ready for "surprises." One May analysis expressed doubt that either Israel or Iran would seek to expand the scope of their emerging conflict in Syria to Lebanon. However, the same analysis and some others speculated that if Israel-Iran conflict in Syria worsens and Iran feels cornered, it could look to gain leverage over Israel by having Hezbollah launch attacks from Lebanon. Israel faces a threat from the Gaza Strip (via Hamas and other militant groups). Although Palestinian militants maintain rocket and mortar arsenals, the threat from projectiles has reportedly been diminished by Israel's Iron Dome defense system. Tunnels that Palestinian militants used somewhat effectively in a 2014 conflict with Israel have been largely neutralized by systematic Israeli efforts, with some financial and technological assistance from the United States. Under President Abdel Fattah al Sisi, Egyptian military efforts have significantly reduced smuggling over land into Gaza. In 2018, protests and violence along security fences dividing Gaza from Israel have attracted international attention. Israel's use of live fire and the death of more than 120 Palestinians in the spring (including several deaths on May 14, the day that the U.S. embassy opened in Jerusalem) led the U.N. Human Rights Council to call in May for an "independent, international commission of inquiry" to produce a report. A June U.N. General Assembly resolution condemned both Israeli actions against Palestinian civilians and the firing of rockets from Gaza against Israeli civilians. Subsequently, some Israel-Gaza violence has ensued over Palestinians' use of incendiary kites or balloons to set fires in southern Israel and a sniper's killing of an Israeli soldier in July, fueling speculation about possible escalation. U.S. and PA funding reductions have added to questions about humanitarian assistance for Gaza's population, who remain largely dependent on external donor funding and face chronic economic difficulties and shortages of electricity and safe drinking water. Since 2007, as part of a larger regime of Israeli-Egyptian control over access to and from Gaza, Israel has limited the shipment of building materials into Gaza because of concerns that Hamas might divert materials for reconstruction toward military infrastructure. The possibility that humanitarian crisis could destabilize Gaza has prompted discussions among U.S., Israeli, and Arab leaders aimed at improving living conditions and reducing spillover threats. These discussions have sparked public debate about how closely humanitarian concerns should be linked with political outcomes involving Israel, Hamas, and the PA, or with an anticipated U.S. diplomatic initiative (see " Peace Process and International Involvement "). Strong bilateral relations have reinforced significant U.S.-Israel cooperation on defense, including military aid, arms sales, joint exercises, and information sharing. It also has included periodic U.S.-Israel cooperation in developing military technology. U.S. military aid has helped transform Israel's armed forces into one of the most technologically sophisticated militaries in the world. This aid for Israel has been designed to maintain Israel's "qualitative military edge" (QME) over neighboring militaries, since Israel must rely on better equipment and training to compensate for a manpower deficit in a conflict against one or more regional states. U.S. military aid, a portion of which may be spent on procurement from Israeli defense companies, also has helped Israel build a domestic defense industry, and Israel in turn is one of the top exporters of arms worldwide. On November 30, 1981, the United States and Israel signed a memorandum of understanding (MOU) establishing a framework for consultation and cooperation to enhance the national security of both countries. In 1983, the two sides formed a Joint Political Military Group to implement provisions of the MOU. Joint air and sea military exercises began in 1984, and the United States has constructed facilities to stockpile military equipment in Israel. In 1986, Israel and the United States signed an MOU—the contents of which are classified—for Israeli participation in the Strategic Defense Initiative (SDI/"Star Wars"), under which U.S.-Israel co-development of the Arrow ballistic missile defense system has proceeded. In 1987, Israel was designated a "major non-NATO ally" by the Reagan Administration, and in 1996, under the terms of Section 517 of the Foreign Assistance Act of 1961, as amended, Congress codified this status, affording Israel preferential treatment in bidding for U.S. defense contracts and expanding its access to weapons systems at lower prices. In 2001, an annual interagency strategic dialogue, including representatives of diplomatic, defense, and intelligence establishments, was created to discuss long-term issues. The U.S.-Israel Enhanced Security Cooperation Act ( P.L. 112-150 ) of 2012 and U.S.-Israel Strategic Partnership Act ( P.L. 113-296 ) of 2014 encouraged continued and expanded U.S.-Israel cooperation in a number of areas, including defense, homeland security, cyber issues, energy, and trade. The latter act designated Israel as a "major strategic partner" of the United States—a designation whose meaning has not been further defined in U.S. law or by the executive branch. Since the late 1970s, successive Administrations have argued that U.S. arms sales are an important mechanism for addressing the security concerns of Israel and other regional countries. During this period, some Members of Congress have argued that sales of sophisticated weaponry to Arab countries may erode Israel's QME over its neighbors. However, successive Administrations have maintained that Arab countries are too dependent on U.S. training, spare parts, and support to be in a position to use sophisticated U.S.-made arms against the United States, Israel, or any other U.S. ally in a sustained campaign. Arab critics routinely charge that Israeli officials exaggerate the threat they pose. The threat of a nuclear-armed or regionally bolstered Iran, though it has partially aligned Israeli and Sunni Arab interests in deterring a shared rival, may be exacerbating Israeli fears of a deteriorated QME, as Saudi Arabia and other Gulf states dramatically increase defense procurements from U.S. and other foreign suppliers. In 2008, Congress enacted legislation requiring that any proposed U.S. arms sale to "any country in the Middle East other than Israel" must include a notification to Congress with a "determination that the sale or export of such would not adversely affect Israel's qualitative military edge over military threats to Israel." In parallel with this legal requirement, U.S. and Israeli officials frequently signal their shared understanding of the U.S. commitment to maintaining Israel's QME. However, the codified definition focuses on preventing arms sales to potential regional Israeli adversaries based on a calculation of conventional military threats, raising questions about the definition's applicability to evolving unconventional threats to Israel's security. What might constitute a legally defined adverse effect to QME is not clarified in U.S. legislation. After the passage of the 2008 legislation, a bilateral QME working group was created allowing Israel to argue its case against proposed U.S. arms sales in the region. For example, former Secretary of Defense Robert Gates wrote that, in 2010, the Obama Administration addressed concerns that Israel's leaders had about the possible effect on QME of a large U.S. sale of F-15 aircraft to Saudi Arabia by agreeing to sell Israel additional F-35 aircraft. The U.S.-Israel Strategic Partnership Act ( P.L. 113-296 ) enacted in December 2014 requires more frequent QME assessments and executive-legislative consultations. It also requires that QME determinations include evaluations of how potential arms sales would change the regional balance, while identifying measures Israel may need to take in response to the potential sales, and assurances or possible assurances from the United States to Israel as a result of the potential sales. Specific figures and comprehensive detail regarding various aspects of U.S. aid and arms sales to Israel are discussed in CRS Report RL33222, U.S. Foreign Aid to Israel , by [author name scrubbed]. That report includes information on conditions that, in each fiscal year, generally allow Israel to use its military aid earlier and more flexibly than other countries. Israel is the largest cumulative recipient of U.S. foreign assistance since World War II. Since 1976, Israel has generally been the largest annual recipient of U.S. foreign assistance, with occasional exception of Iraq and Afghanistan after 2004. Since 1985, the United States has provided approximately $3 billion in grants annually to Israel. In the past, Israel received significant economic assistance, but now almost all U.S. bilateral aid to Israel is in the form of Foreign Military Financing (FMF). U.S. FMF to Israel represents approximately one-half of total FMF and between 15-20% of Israel's defense budget. The new 10-year bilateral military aid MOU commits the United States to $3.3 billion annually from FY2019 to FY2028, subject to congressional appropriations. The United States also generally provides some annual American Schools and Hospitals Abroad (ASHA) funding and funding to Israel for migration assistance. Israel uses approximately 74% of its FMF to purchase arms from the United States, in addition to receiving U.S. Excess Defense Articles (EDA). Given the new MOU's phase-out of Israeli use of FMF for domestic arms producers, by FY2028 all of Israel's FMF will go toward U.S.-origin arms. Israel's procurement of the F-35 Joint Strike Fighter from the United States has been underway since 2016. To date, Israel has received 12 F-35s, and it is under contract to receive a total of 50 by 2024. In late 2017, Israel was the first non-U.S. country to declare operational capability for the F-35, and it has reportedly used the aircraft in combat over Israel's northern border. Under the terms of its arrangements with the United States, Israel has had domestic contractors install customized equipment and weaponry, and it is the only F-35 recipient to date with the right to perform depot-level aircraft maintenance within its own borders. Sales of U.S. defense articles and services to Israel are made subject to the terms of both the Arms Export Control Act (AECA) and the July 23, 1952, Mutual Defense Assistance Agreement between the United States and Israel (TIAS 2675). The 1952 agreement states: The Government of Israel assures the United States Government that such equipment, materials, or services as may be acquired from the United States ... are required for and will be used solely to maintain its internal security, its legitimate self-defense ... and that it will not undertake any act of aggression against any other state. Past Administrations have acknowledged that some Israeli uses of U.S. defense articles may have failed to meet the requirements under the AECA and the 1952 agreement that Israel only use such articles for self-defense and internal security purposes. These past Administrations have transmitted reports to Congress stating that "substantial violations" of agreements between the United States and Israel regarding arms sales "may have occurred." The most recent report of this type was transmitted in January 2007 in relation to concerns about Israel's use of U.S.-supplied cluster munitions during military operations against Hezbollah in Lebanon during 2006. Other examples include findings issued in 1978, 1979, and 1982 with regard to Israel's military operations in Lebanon and Israel's air strike on Iraq's nuclear reactor complex at Osirak in 1981. Additionally, Section 620M of the Foreign Assistance Act of 1961 (FAA), as amended (commonly known as the Leahy Law), prohibits the furnishing of assistance authorized by the FAA and the AECA to any foreign security force unit where there is credible information that the unit has committed a gross violation of human rights. The State Department implements Leahy vetting to determine which foreign security force units (and individuals within the units) are eligible to receive U.S. assistance or training. In 2016, Senator Patrick Leahy and 10 other Members of Congress corresponded with the State Department on the application of the Leahy Law to some specifically alleged instances of possible extrajudicial killings or torture by Israeli personnel. The State Department assured the Members of Congress that it was properly conducting Leahy vetting and monitoring the instances that were mentioned in their letter. In November 2017, Representative Betty McCollum introduced the Promoting Human Rights by Ending Israeli Military Detention of Palestinian Children Act ( H.R. 4391 ), which would prohibit the use of aid for Israel in support of various types of ill-treatment of Palestinian children. Congress provides hundreds of millions of dollars in annual assistance beyond Administration-requested amounts for Israel's Iron Dome anti-rocket system and joint U.S.-Israel missile defense programs such as Arrow and David's Sling. The new MOU provides for $500 million in annual funding from FY2019 to FY2028, with possibly more in exceptional circumstances. In July 2016, the United States and Israel announced that they had successfully conducted a special trial—the first of its kind in eight years—to test the connectivity of U.S.- and Israeli-controlled missile defense systems that are based in and around Israel. Some countries have sought to acquire elements used in Israeli missile defense systems. In April 2018, 40 Members of Congress sent a letter to the Chair and Ranking Member of the House Appropriations Subcommittee on Defense asking the Subcommittee to "carefully study" whether the U.S. Army might immediately acquire Iron Dome. A 2018 report stated that Rafael Advanced Defense Systems Ltd.—the primary Israeli contractor for Iron Dome—has entered into a cooperation agreement with Romania that would be the first to involve the export of Iron Dome's interception system. Israel Aerospace Industries reportedly has sold the radar used in the Iron Dome and David's Sling systems to a number of countries, including Canada and India. U.S.-Israel Security Assistance Authoriz ation Act of 2018 ( S. 2497 and H.R. 5141 ) . This bill includes the following provisions: FMF authorization. Would authorize FMF of at least $3.3 billion per year from FY2019 to FY2028 (the duration of the new MOU). Extension of war reserves stockpile authority and access to loan guarantees . Would extend this authority and access through FY2023. Precision guided munitions (PGMs). Would (1) authorize a joint U.S.-Israel assessment of how the United States can help provide PGMs to help with potential conflicts with Hezbollah and Hamas; (2) authorize the President to utilize the Special Defense Acquisition Fund to transfer PGMs to reserve stocks for Israel; and (3) authorize the modification of rapid acquisition and deployment procedures to aid U.S. production of PGMs under circumstances of urgent need. Report on Israel's eligibility for strategic trade authorization exception. Would require the President to report to Congress on Israel's status regarding this exception. Cybersecurity cooperation ( H.R. 5141 only). Would direct the Homeland Security Department to establish a grant program to support cybersecurity research, development, demonstration, and commercialization in accordance with a 2008 bilateral agreement. W orldwide foreign assistance , space exploration , and countering drone aircraft . Would encourage and authorize cooperative U.S.-Israel efforts on these issues. Additional reporting on Israel's QME and security posture. Would require the periodic reports on Israel's QME that are already legally mandated to include additional information about threats to Israel and countermeasures available to it. 201 9 National Defense Authorization Act (NDAA , H.R. 5515 ). The conference version of H.R. 5515 (found in H.Rept. 115-874 ) includes the following provisions: Section 127 2 . Would authorize the funding currently authorized for anti-tunneling efforts to also be used for countering drone aircraft (unmanned aerial systems). Section 1273 . Provisions from S. 2497 / H.R. 5141 on the extension of war reserves stockpile authority and the joint U.S.-Israel assessment on PGMs. Arms sales, information sharing, and technical collaboration between the United States and Israel raise questions about what Israel might do with capabilities or information it acquires. The United States and Israel have regularly discussed Israel's dealings on sensitive security equipment and technology with various countries, especially China. Sources have reported that the United States has established de facto veto power over Israeli third-party arms sales. And s ince the 1980s there have been at least three cases in which U.S. government employees were convicted of disclosing classified information to Israel or of conspiracy to act as an Israeli agent. The United States is Israel's largest single-country trading partner, and—according to data from the U.S. International Trade Commission—Israel is the United States's 24 th -largest trading partner. The two countries concluded a Free Trade Agreement (FTA) in 1985, and all customs duties between the two trading partners have since been eliminated. The FTA includes provisions that protect both countries' more sensitive agricultural sub-sectors with nontariff barriers, including import bans, quotas, and fees. Israeli exports to the United States have grown since the FTA became effective. Qualified Industrial Zones (QIZs) in Jordan and Egypt are considered part of the U.S.-Israel free trade area. In 2017, Israel imported approximately $12.6 billion in goods from and exported $21.9 billion in goods to the United States. The United States and Israel have launched several programs to stimulate Israeli industrial and scientific research, for which Congress has authorized and appropriated funds on several occasions. For historical background on these issues, see CRS Report RL34074, The Palestinians: Background and U.S. Relations , by [author name scrubbed]. The prospects for an Israeli-Palestinian peace process are complicated by many factors. Since President Trump took office, he and officials from his Administration have expressed interest in brokering a final-status Israeli-Palestinian agreement. Many of their statements and policies, however, have raised questions about the timing and viability of any new U.S.-backed diplomatic initiative. The change in U.S. policy on Jerusalem in December 2017 has complicated the U.S. role (see " Jerusalem ," below). Israeli leaders generally celebrated the change, but PLO Chairman Abbas strongly objected. Many other countries opposed President Trump's statements on Jerusalem. This opposition was reflected in December action at the United Nations. Citing alleged U.S. bias favoring Israel, Palestinian leaders have broken off high-level political contacts with the United States and have sought support from other international actors and organizations to improve their negotiating position with Israel. However, the PA continues security coordination with Israel. Tensions over Jerusalem appear to have influenced Administration decisions to reduce or delay certain types of aid to the Palestinians, and have made prospects for restarting Israeli-Palestinian talks in 2018 less certain. Reports suggest that the Administration is preparing a detailed document on the peace process that it may share in an attempt to overcome obstacles to progress. At the end of a June 2018 trip to meet with various Middle Eastern leaders, senior White House advisor Jared Kushner (the President's son-in-law) said that the Administration's plan was almost done. Kushner also said, "If President Abbas is willing to come back to the table, we are ready to engage; if he is not, we will likely air the plan publicly." Some former U.S. officials have cautioned against presenting a plan given current Palestinian opposition. In May, Abbas characterized the possible removal of core issues of the Israeli-Palestinian conflict—namely, Jerusalem's status and Palestinian refugee claims—from the negotiating table as "an American slap." The Administration seeks support from some Arab states, including Saudi Arabia, the United Arab Emirates, Jordan, and Egypt, for the anticipated U.S. initiative. While these Arab states have criticized the U.S. stance on Jerusalem, there are also signs that the shared goal of countering Iranian influence in the region is leading some of them to interact more overtly with Israeli counterparts and to dissuade the Palestinians from abandoning U.S.-backed diplomacy. The 2002 Arab Peace Initiative remains a key reference point for Arab positions on issues of Israeli-Palestinian dispute. Speculation surrounds the particulars of the possible Trump Administration proposal. Dating back to unconfirmed reports from late 2017, some observers anticipate that a proposal could favor Israeli positions that call for limited Palestinian sovereignty, maintaining most West Bank settlements, locating a Palestinian capital on the outer fringes of Jerusalem, and dismissing refugee claims to a right of return. Palestinian officials have complained that the United States is trying to undermine Abbas and dictate a solution. In June, Abbas's spokesperson accused the Administration and Israel of seeking to separate Gaza from the West Bank under the guise of humanitarian aid. In December 2017, President Trump recognized Jerusalem as Israel's capital and pledged to move the U.S. embassy from Tel Aviv to Jerusalem. These actions represented a departure from the decades-long U.S. executive branch practice of not recognizing Israeli sovereignty over Jerusalem or any part of it. The President pointed to the Jerusalem Embassy Act of 1995 ( P.L. 104-45 ) as a significant factor in the policy change. The western part of Jerusalem that Israel has controlled since 1948 has served as the official seat of its government since shortly after its founding as a state. Israel officially considers Jerusalem (including the eastern part it unilaterally annexed after the 1967 Arab-Israeli war, while also expanding the city's municipal boundaries) to be its capital (see Figure 2 below). In his December remarks, President Trump stated that he was not taking a position on "specific boundaries of the Israeli sovereignty in Jerusalem," and would continue to consider the city's final status to be subject to Israeli-Palestinian negotiations. However, he did not explicitly mention Palestinian aspirations regarding Jerusalem; Palestinians envisage East Jerusalem as the capital of their future state. In a February 2018 interview, the President said that he would support specific boundaries as agreed upon by both sides. He also has called on all parties to maintain the "status quo" arrangement at Jerusalem's holy sites (see textbox below). On February 23, the State Department spokesperson issued the following press statement announcing that the embassy would open in May 2018, to coincide with Israel's 70 th anniversary: The Embassy will initially be located in the Arnona neighborhood, in a modern building that now houses consular operations of U.S. Consulate General Jerusalem. Those consular operations, including American citizen and visa services, will continue at the Arnona facility without interruption, as part of the Embassy. Consulate General Jerusalem will continue to operate as an independent mission with an unchanged mandate, from its historic Agron Road location. Initially, the interim Embassy in Arnona will contain office space for the Ambassador and a small staff. By the end of next year, we intend to open a new Embassy Jerusalem annex on the Arnona compound that will provide the Ambassador and his team with expanded interim office space. In parallel, we have started the search for a site for our permanent Embassy to Israel, the planning and construction of which will be a longer-term undertaking. The embassy opened on May 14 at the Arnona facility (see Figure 3 below) amid criticism from several international actors and violence on the same day at the Gaza-Israel frontier (see " Hamas and Gaza " above). According to the State Department spokesperson, the site is located "partly in West Jerusalem and partly in what's considered no man's land," as it lies "between the 1949 armistice lines" in a zone that was demilitarized between 1949 and 1967. The White House stated that it cost $400,000 to modify the facility to function as an embassy. The ambassador's official residence is to transition to Jerusalem at a later date. Congress could consider a number of legislative and oversight options with regard to the plans mentioned above to expand the embassy at the Arnona site, and later to plan and construct a permanent embassy. These options could focus on funding, timeframe and logistics, progress reports, and security for embassy facilities and staff. A State Department official said in February that a new embassy building would take 7 to 10 years to construct, and a former official estimated that building a new embassy in Jerusalem may cost about $500 million. Israel has approximately 130 official residential communities (known internationally and by significant segments of Israeli society as "settlements") in the West Bank, and approximately 100 additional settlement outposts unauthorized under Israeli law. It also maintains other military and civilian land-use sites in the West Bank. In addition, Israeli authorities and Jewish Israeli citizens have established roughly 14 main residential areas (referred to variously as "settlements" or "neighborhoods") in East Jerusalem. All of these residential communities are located beyond the 1949-1967 armistice line (the "Green Line") in areas that Palestinians assert are rightfully part of their envisioned future state. The first West Bank settlements were constructed following the 1967 war, and were initially justified as residential areas connected to personnel involved with Israel's military occupation. Major West Bank residential settlement building began in the late 1970s with the advent of the pro-settler Gush Emunim ("Bloc of the Faithful") movement and the 1977 electoral victory of Menachem Begin and the Likud Party. Subsequently, Israelis have expanded existing settlements and established new ones. Israelis who defend the settlements' legitimacy generally use some combination of legal, historical, strategic, nationalistic, or religious justifications. The international community generally considers Israeli construction on territory beyond the Green Line to be illegal. In 2015, an Israeli anti-settlement advocacy group said that a two-tier planning system exists in Area C of the West Bank: "a civil and representative planning system for Jewish settlers, and a military system without representation for Palestinians." Israel retains military control over the West Bank and has largely completed a separation barrier that roughly tracks the Green Line, but departs from it in a number of areas that include significant settlement populations. Israeli officials state that the barrier's purpose is to separate Israelis and Palestinians and prevent terrorists from entering Israel. Palestinians object to the barrier being built on their territory because it cuts Palestinians off from East Jerusalem and, in some places, bisects their landholdings and communities. It also is seen by many as an Israeli device to unilaterally determine borders between Israel and a future Palestinian state. Not counting East Jerusalem, one source states that 77% of Israeli settlers live within the barrier's perimeter. Counting East Jerusalem, the figure grows to 85%. Settlers affect the political and diplomatic calculus in various ways. They influence key voting blocs in Israel's coalition-based parliamentary system (although they do not all share the same background or interests, settlers constitute about 6% of the Israeli population). Additionally, some initiate public protest and even violent resistance against government efforts to limit or regulate their actions. Also, they have a significant symbolic role in a country whose initial survival depended on pioneering spirit in the face of adversity. Some Israelis caution that the demand to provide security to settlers and their transportation links to Israel could perpetuate Israeli military control in the West Bank even if other rationales for maintaining such control eventually recede. Protecting settlers is made more difficult by altercations between some settlers and Palestinian West Bank residents, and some settlers' defiance of Israeli military authorities. When ordered by Israel's court system to dismantle outposts, the government has complied. In some cases, the government placated settlers by relocating displaced outpost residents within the boundaries of settlements permitted under Israeli law. U.S. policy on settlements has varied since 1967. Until the 1980s, multiple Administrations either stated or implied that settlements were "contrary to international law," with President Carter's Secretary of State Cyrus Vance stating explicitly that settlements were "illegal" in 1980. President Reagan later stated that settlements were "not illegal," but "ill-advised" and "unnecessarily provocative." Since then, the executive branch has generally refrained from pronouncements on the settlements' legality. Rather, a common U.S. stance has been that settlements are an "obstacle to peace." Additionally, loan guarantees to Israel currently authorized by U.S. law are subject to possible reduction by an amount equal to the amount Israel spends on settlements in the occupied territories. A former U.S. official wrote in 2014 that U.S. Administrations are "not entirely sure what to do with the fact that Israeli prime ministers of all political stripes have continued Israeli settlement building on the West Bank and construction in parts of east Jerusalem that we'd like to see become the capital of a Palestinian state." An April 2004 letter from President George W. Bush to then Israeli Prime Minister Ariel Sharon explicitly acknowledged that "in light of new realities on the ground, including already existing major Israeli populations (sic) centers, it is unrealistic to expect that the outcome of final status negotiations will be a full and complete return to the armistice lines of 1949." The Obama Administration generally opposed Israeli settlement activity, but took differing approaches at various points. During the Administration's first term, it sought to freeze all settlement activity, including in East Jerusalem. Israel responded with a partial 10-month moratorium. In February 2011, the United States vetoed a draft U.N. Security Council resolution that would have characterized Israeli settlements in the West Bank and East Jerusalem as illegal. During President Obama's second term, he signed trade and customs legislation ( P.L. 114-26 and P.L. 114-125 ) opposing punitive economic measures against Israel (such as measures advocated by a non-governmental boycott, divestment, and sanctions [BDS] movement). However, he asserted in a presidential signing statement for P.L. 114-125 that certain provisions treating "Israeli-controlled territories" (i.e., West Bank settlements) beyond the Green Line in the same manner as Israel itself were not in line with U.S. policy. Finally, in December 2016, the Obama Administration decided to abstain from (rather than veto) a U.N. Security Council resolution (Resolution 2334) similar to the one it vetoed in 2011. To date, the Trump Administration has been less critical than the Obama Administration of Israeli settlement-related announcements and construction activity. In February 2017, the White House press secretary released a statement with the following passage: While we don't believe the existence of settlements is an impediment to peace, the construction of new settlements or the expansion of existing settlements beyond their current borders may not be helpful in achieving that goal. As the President has expressed many times, he hopes to achieve peace throughout the Middle East region. Some reports suggest that Israel at some point coordinated settlement construction plans with Trump Administration officials. However, in February 2018 a White House spokesperson denied reports that U.S. officials may have discussed the possible annexation of some settlements with Prime Minister Netanyahu. Appendix A. Israeli Knesset Parties and Their Leaders Appendix B. Selected U.S.-Based Interest Groups Relating to Israel Selected groups actively interested in Israel are noted below with links to their websites for information on their policy positions. American Israel Public Affairs Committee: http://www.aipac.org American-Israeli Cooperative Enterprise/Jewish Virtual Library: http://www.jewishvirtuallibrary.org American Jewish Committee: http://www.ajc.org American Jewish Congress: http://www.ajcongress.org Americans for Peace Now: http://www.peacenow.org Anti-Defamation League: http://www.adl.org Conference of Presidents of Major Jewish Organizations: http://www.conferenceofpresidents.org Foundation for Middle East Peace: http://www.fmep.org Hadassah (The Women's Zionist Organization of America, Inc.): http://www.hadassah.org Israel Bonds: http://www.israelbonds.com Israel Institute: http://www.israelinstitute.org The Israel Project: http://www.theisraelproject.org Israel Policy Forum: http://www.israelpolicyforum.org J Street: http://jstreet.org Jewish Federations of North America: http://www.jewishfederations.org Jewish National Fund: http://www.jnf.org Jewish Policy Center: http://www.jewishpolicycenter.org New Israel Fund: http://www.nif.org S. Daniel Abraham Center for Middle East Peace: http://www.centerpeace.org Zionist Organization of America: http://www.zoa.org

Summary: Since Israel's founding in 1948, successive U.S. Presidents and many Members of Congress have demonstrated a commitment to Israel's security and to close U.S.-Israel cooperation. Strong bilateral ties influence U.S. policy in the Middle East, and Congress provides active oversight of the executive branch's actions. Israel is a leading recipient of U.S. foreign aid and a frequent purchaser of major U.S. weapons systems. By law, U.S. arms sales cannot adversely affect Israel's "qualitative military edge" over other countries in its region. The two countries signed a free trade agreement in 1985, and the United States is Israel's largest trading partner. Israel regularly seeks help from the United States to bolster its regional security and defense capabilities. Legislation in Congress frequently includes proposals to strengthen U.S.-Israel cooperation, such as the U.S.-Israel Security Assistance Authorization Act of 2018 (S. 2497 and H.R. 5141). Concerns about Iran dominate Israel's strategic calculations. Prime Minister Binyamin Netanyahu influenced President Trump's May 2018 decision to withdraw from the 2015 Iranian nuclear agreement and to reimpose sanctions on Iran, and Israel has made common cause with several Arab states to counter Iran's regional activities. During 2018, Israel and Iran have clashed over Iran's presence in Syria, fueling speculation about the possibility of broader conflict between the two countries and how Russia's presence in Syria might affect the situation. A serious threat persists from Hezbollah's rocket arsenal in Lebanon, adding to the uncertainty along Israel's northern border. Hamas and other militant groups in Gaza may present less of an immediate threat to Israeli population centers. Nevertheless, various forms of conflict have taken place around the Gaza-Israel frontier in 2018. Improving difficult living conditions for Palestinians in Gaza while also ensuring Israel's security presents a challenge, given: Hamas' control of Gaza, Israeli and Egyptian control of its access points, and recent reductions in U.S. and Palestinian Authority (PA) funding. Israel's political impasse with the Palestinians continues. Israel has militarily occupied the West Bank since the 1967 Arab-Israeli war, with the PA exercising limited self-rule in some areas since the mid-1990s. The Trump Administration's recognition of Jerusalem as Israel's capital in December 2017 and its relocation of the U.S. embassy there in May 2018 were greeted warmly by Israel but rejected by Palestinians and many other international actors. The success of an anticipated U.S. diplomatic proposal may depend on a number of factors, including whether Israel embraces it and can persuade Palestinians or Arab state leaders to do so. Approximately 590,000 Israelis live in residential neighborhoods or "settlements" in the West Bank and East Jerusalem. These settlements are of disputed legality under international law. Israel has a robust economy and an active democracy. Prime Minister Netanyahu's governing coalition includes various right-of-center and religious parties. Domestic debates continue about the government's commitment to rule of law and freedom of expression, and how to balance market-friendly economic policies with individuals' concerns about cost of living. The role and status of Arab citizens presents challenges for the state and society. Netanyahu is facing a number of corruption allegations, and some political commentators anticipate that Netanyahu will call national elections ahead of the attorney general's decision on whether to indict him.