What a post-Islamic Republic Iran might mean for Israel

In the early days of 1979, Israeli diplomats in Tehran watched as crowds gathered outside of their embassy gates. For decades, they had lived quietly in the Iranian capital, part of a remarkably durable (albeit fraught) partnership between the two countries. Israeli engineers had helped develop irrigation systems across the Iranian countryside; Iranian oil flowed through European pipelines to European markets; intelligence officers from both states shared information about their common enemies.

But, as the Iranian Revolution gathered momentum, supporters of the returning cleric Ruhollah Khomeini seized the Israeli embassy and handed the building to the Palestine Liberation Organisation. Diplomatic relations were severed almost overnight. Yasser Arafat was the first foreign leader to visit Iran after the revolution.

Nearly half a century later, the hostility between Iran and Israel is often treated as an immutable feature of Middle Eastern politics – but these two countries were not always enemies.

For nearly three decades before the revolution, Iran under Mohammad Reza Pahlavi maintained a discreet partnership with Israel. Although Tehran avoided recognising Israel to preserve its standing in the Muslim world, there was still significant cooperation between the two states.

In the years following the Arab oil embargoes of the 1960s and 1970s, Iran supplied a significant portion of Israel’s oil. Tankers carried Iranian crude to the Red Sea port of Eilat, where it flowed north through the Eilat-Ashkelon Pipeline, allowing it to reach Mediterranean markets while bypassing hostile Arab territory. Meanwhile, Israeli companies provided agricultural expertise, infrastructure development and advanced technology to Iran’s rapidly modernising economy. The two even launched secret joint defence initiatives, including Project Flower, a late-1970s programme aimed at developing advanced missile systems.

Perhaps the closest ties, however, existed in the realm of intelligence. Officers from Mossad worked closely with Iran’s intelligence service, SAVAK, sharing information on regional threats and coordinating efforts to counter Soviet influence in the Middle East. At times, too, the cooperation extended to covert support for Kurdish insurgents fighting the Iraqi government.

Both countries viewed the rise of Arab nationalist regimes as a most serious threat, particularly the influence of Egyptian leader Gamal Abdel Nasser. While Iran worried that revolutionary Arab nationalism could spread to the Persian Gulf, Israel feared military confrontation with hostile Arab neighbours.

There had been an arrangement that had become known as the ‘periphery doctrine,’ an effort first articulated by David Ben-Gurion to seek alliances with non-Arab regional powers to counterbalance hostile Arab states. Iran, alongside Turkey and Ethiopia, became a cornerstone of that strategy. But this arrangement was only durable until the upheaval of 1979, when the monarchy collapsed and Ruhollah Khomeini established the Islamic Republic.

Under the new regime, opposition to Israel became a central pillar of Iranian political identity, and Israel was subsequently denounced as an illegitimate state. Over time, Iran would invest heavily in a network of proxy organisations across the region, including Hezbollah in Lebanon and Hamas in the Palestinian territories. And so began the axis of terror.

And yet, the fact that this hostility emerged so abruptly raises an intriguing question: if the very foundations of the Islamic Republic were removed, what might Iran’s foreign policy look like?

The answer would almost certainly not involve a simple return to the world that existed prior to 1979; the Middle East has undergone dramatic changes over the past four decades, and Israel’s regional position has evolved accordingly. During this time, Iran has spent decades building political and military influence across Iraq, Syria, Lebanon and Yemen.

Even so, the underlying strategic logic that once brought Israel and Iran together has not entirely disappeared. A post-Islamic Republic Iran would likely face powerful incentives to rebuild relations with the Western World. The country possesses enormous energy reserves and a large, well-educated population; however, decades of sanctions have severely constrained its economic potential. Any future rational Iranian government seeking to revitalise Iran’s economy would almost certainly pursue closer ties with Europe and the United States.

To achieve that, they would need to end their support of their proxy groups – not to mention that without the ideological framework that defines the Islamic Republic, continuing to maintain an extensive network of terrorist groups would offer far fewer strategic advantages. Ending support for these organisations could allow them to build past the last fifty years and reduce the constant confrontations that have dominated Iran’s foreign policy for decades.

While full diplomatic normalisation with the likes of Israel and the United States would likely take time, the disappearance of Iran’s ideological hostility could transform one of the region’s most dangerous rivalries into something closer to the cautious coexistence we could all live with.

Still, any return to the pragmatic cooperation of the 1970s would face significant obstacles. Iranian domestic politics, shaped by decades of revolutionary rhetoric, would place limits on how quickly relations with Israel could evolve. Not to mention that the regional terrorist militias supported by Iran have also become deeply embedded in the political systems of several Middle Eastern states.

If Iran’s political trajectory were ever to shift again, it is not fully impossible to imagine a future in which Israeli diplomats once more walk through the streets of Tehran. That is the new, and very different, sort of Middle East that we hope for.


© The Times of Israel (Blogs)