Netanyahu as Patriarch of Iran Sanctions Is Wary of Shift

Oct. 1 (Bloomberg) -- Israeli Prime Minister Benjamin Netanyahu talks about Israel's determination to prevent Iran from obtaining nuclear weapons and the outlook for peace talks with the Palestinians. Netanyahu addresses the United Nations General Assembly. (Video courtesy of United Nations. Source: Bloomberg)

For more than 15 years and more than any other world leader, Benjamin Netanyahu demanded sanctions against Iran to stop it from getting nuclear weapons. Now, as the sanctions are credited with weakening the Iranian economy enough to prompt a thaw between the U.S. and the Islamic nation, the Israeli prime minister is among the skeptics who remain unconvinced that anything significant has changed.

Netanyahu told the United Nations General Assembly today that the “soothing rhetoric” offered by new Iranian President Hassan Rouhani is contradicted by country’s “savage record” of sponsoring global terror attacks and continued development of its nuclear program. “The pressure on Iran must continue,” Netanyahu said. “When it comes to Iran’s nuclear program here’s my advice: distrust, dismantle, verify.”

In office, Netanyahu has prodded American and European leaders for a tougher line and said Israel would consider military strikes to stop Iran getting nuclear weapons should diplomacy fail. Out of office, too, he devoted time to the issue.

Going back about two decades, Netanyahu would travel to state capitals across the U.S., urging pension funds to stop investments in Iran, according to an official traveling with the prime minister in the U.S. this week, who asked not to be identified because he wasn’t authorized to speak on record.

Photographer: Chris Kleponis/Bloomberg

Israeli Prime Minister Benjamin Netanyahu listens during a meeting with U.S. President Barack Obama, not seen, at the White House in Washington, D.C., on Sept. 30, 2013. Close

Israeli Prime Minister Benjamin Netanyahu listens during a meeting with U.S. President... Read More

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Photographer: Chris Kleponis/Bloomberg

Israeli Prime Minister Benjamin Netanyahu listens during a meeting with U.S. President Barack Obama, not seen, at the White House in Washington, D.C., on Sept. 30, 2013.

‘Dual Fear’

“Netanyahu appreciated more than most that sanctions are held together by a dual fear of the threat of Israeli military strikes and U.S. financial penalties,” said Mark Dubowitz, executive director of the Foundation for the Defense of Democracies in Washington. “He’s deeply concerned that any sanctions relief will lead to sanctions dismantlement, with no way to reconstitute if and when the Iranians cheat.”

Oil dropped last month as the breakthrough with Iran followed a decline in tensions over Syria, with the U.S. stepping back from a possible attack on the Iranian ally. West Texas Intermediate for November delivery is down more than 8 percent since Sept. 6. Israel’s benchmark stock index has surged as the risk of a wider Middle East war receded, and it rose today to the highest in more than two years.

Saber-Rattling

Tighter curbs on Iran came during the past two years, as the U.S. and European Union ramped up financial and industrial penalties that drove Iranian oil output to the lowest level since 1990.

In Europe, the saber-rattling emanating from Israel helped to consolidate support for an “enlarged scope of sanctions, as people sought to forestall a possible attack that could have wider consequences for the region,” said David Makovsky, a senior fellow at the Washington Institute for Near East Policy. The EU shut off oil imports from Iran in July last year.

The sanctions are taking their toll. Iran’s gross domestic product will shrink 1.3 percent this year after contracting 1.9 percent in 2012, according to International Monetary Fund estimates. A quarter of Iranians aged 15 to 29 were jobless in the Iranian year ended in March, official figures show.

The economic gloom became a central issue in Iran’s June election, won by Rouhani on a vow to restore the country’s global standing. On his first trip to the West last week, Rouhani’s phone chat with President Barack Obama broke a silence stretching to the Islamic republic’s birth in 1979. At the United Nations, the Iranian leader vowed swift action for a nuclear accord.

‘Rogue Regime’

As Western policy makers welcomed the signs of détente and congratulated themselves for the role sanctions played in bringing it about, Israel is reminding them that nothing has been achieved yet.

Netanyahu said after talks with Obama in Washington yesterday that Iran is still “committed to Israel’s destruction.” He warned at the UN today that Israel is prepared to take unilateral military action against Iran.

“Israel will never acquiesce to nuclear arms in the hands of a rogue regime,” Netanyahu said. “If Israel is forced to stand alone, Israel will stand alone.”

Ignoring Iran’s overtures would also carry risk, said Paul Ingram, executive director at the British-American Security Information Council, a policy advisory group.

“The way in which you get concrete action is by taking people at their word and following through,” Ingram said. “We have to engage with what people are saying and Rouhani is saying a lot of positive things. Without being naïve about it, we then need to follow through.”

‘Curious Nexus’

If Iran doesn’t deliver then “that’s the point at which you start being cynical, rather than in advance,” he said.

A sustained policy of undermining Rouhani may strengthen his foes at home.

“Netanyahu doesn’t want an agreement with Iran, he wants a capitulation,” said Scott Lucas, a professor at the University of Birmingham in England. “There’s a curious nexus where Netanyahu is aligned with American hardliners and Iranian hardliners, who don’t want negotiations.”

Obama echoed Netanyahu’s caution after their meeting yesterday. He said Iranian words aren’t enough until they’re backed by action to dismantle the nuclear program. “We take no options off the table, including military options,” he said.

Previous Spats

The two leaders haven’t always sounded so harmonious. Four years ago, after Netanyahu emerged from his first Oval Office meeting with Obama, he briefed reporters looking slightly disheveled and with an uncharacteristically loosened tie. He said he’d resisted intense U.S. pressure for his government to accept a link between sanctions on Iran and a freeze in Israeli settlements on the West Bank.

Netanyahu’s argument was always that sanctions wouldn’t work unless backed by a credible threat of force, and he repeatedly hinted that he was ready to authorize strikes.

Netanyahu’s calls on the U.S. to set out “red lines” that would trigger military action against Iran sometimes led to tensions with Obama, and public disagreements over the urgency of the threat posed by the Islamic republic.

Asked about the issue during his campaign in September 2012, Obama said he would “block out any noise that’s out there” if Netanyahu kept pushing for an attack. By the time Obama visited Jerusalem in March this year, the differences had been bridged and Obama hailed their coordination on Iran.

Death Camps

Netanyahu, Israel’s UN envoy from 1984 to 1988, has used props in recent speeches at the world body to illustrate what he says is a growing Iranian threat. Last year, he pulled out a drawing of a cartoon bomb, pointing to a red line near the sizzling fuse. In 2009, he brandished a blueprint from the Auschwitz death camp to dramatize concerns that, like the Nazis, Iran’s then-President Mahmoud Ahmadinejad was bent on slaughtering Jews.

Rouhani has sought to distance himself from Ahmadinejad, acknowledging Nazi crimes against the Jews in speeches and interviews during the U.S. visit. His Western-educated Foreign Minister Javad Zarif, who like Netanyahu is a former ambassador at the UN, appeared on American television to mock the Israeli premier for what he described as fear-mongering.

Netanyahu was warning in 1991 that Iran would develop a nuclear bomb within six months, Zarif told ABC’s “This Week,” and 22 years later he’s “still saying we’re six months away.”

Spinning Centrifuges

Iran says its nuclear program is for peaceful purposes and Rouhani has affirmed the country’s right to continue enriching uranium, something that Israel says it shouldn’t be allowed to do. He also said during his campaign that technological progress shouldn’t come at the expense of public welfare. “It’s fine for centrifuges to spin if people are also getting by,” Rouhani said during an election debate.

If the economic squeeze succeeds in pushing Iran toward a compromise, that will be a vindication for Israeli policy and an echo of the Cold War’s end, when economic isolation led to the Soviet Union’s collapse, said Gerald Steinberg, a political scientist at Bar Ilan University in Israel.

In the latter case, “the use of economic tools as a source of power did have a cumulative effect,” Steinberg said. In the former one, “those that argue sanctions brought Iranians to the table have to say Netanyahu’s strategy was the core of that success.”

To contact the reporters on this story: Jonathan Ferziger in Tel Aviv at jferziger@bloomberg.net; Calev Ben-David in Jerusalem at cbendavid@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net

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