Smotrich: Saudi normalization deal won’t happen if it requires Palestinian state
‘If that’s a deal breaker, the deal will sink,’ far-right minister tells Bloomberg; also tells reporters fall of Assad gives Israel opportunity to occupy and resettle Gaza
Finance Minister Bezalel Smotrich said on Monday that Israel will not agree to a normalization deal with Saudi Arabia if it requires establishing a Palestinian state.
“If that’s a dealbreaker, the deal will sink,” he told Bloomberg in a rare interview with a foreign media outlet.
US and Arab officials have told The Times of Israel that Saudi Arabia, before the Gaza war, had been prepared to settle with steps by Israel that create a pathway for a Palestinian state in exchange for normalization. Riyadh has raised the price of the Palestinian component of the deal over the past year, stressing in no uncertain terms that it will not agree to recognize Israel without a Palestinian state being established.
Smotrich told Bloomberg that the incoming administration of Donald Trump “understands the obligation to ensure the future existence of Israel,” arguing that this involves scrapping the two-state paradigm.
Brian Hook, who is leading the Trump transition at the State Department, said last month that Trump’s 2020 peace plan, which envisioned the establishment of a semi-contiguous Palestinian state, would likely be back on the table.
For his part, Smotrich has said Trump’s victory provides Israel with an opportunity to annex large parts of the West Bank in the coming year. Israel’s Arab neighbors fear the move could collapse the Palestinian Authority, which has limited autonomy over 40 percent of the West Bank.
It is unclear that Trump would back such a plan.
US President Joe Biden’s administration and much of the international community have supported strengthening the Palestinian Authority and enabling it to return to governing the Gaza Strip after the war.
Smotrich told Bloomberg that he and Netanyahu oppose the idea. Both of them have likened the PA to Hamas. Though the PA has expressed support for a two-state solution, it has also lionized terrorism in its education system and regularly pays stipends to jailed terrorists and the families of slain terror operatives.
Netanyahu has instead floated the idea of Arab countries like the United Arab Emirates and Saudi Arabia contributing to the administration of Gaza after the war. However, those countries and others in the region have repeatedly said that they would not take part in the post-war management or reconstruction of Gaza without the PA’s involvement.
Smotrich said Israel won’t agree to end the war unless it successfully dismantles Hamas’s governing capabilities — which Israel says it has yet to do after over 14 months of fighting. The US and Israel’s security establishment have warned that a failure to advance a viable alternative to Hamas rule, such as the PA, will allow the terror group to re-fill vacuums temporarily created by IDF operations in Gaza.
As for the West Bank, where some 160,000 Palestinian laborers have been barred from returning to their jobs in Israel and the settlements since Hamas’s October 7, 2023, onslaught, Smotrich said that the ban will not be lifted.
While Bank of Israel Governor Amir Yaron has come out against that decision due to the ramifications for Israel’s economy and construction sector, Smotrich said it will pay off in the long run. “It will be a difficult year or two, but eventually the construction sector will emerge with better building technologies and productivity,” he told Bloomberg.
The finance minister also insisted that Israel’s economy remains strong, despite several major agencies lowering Israel’s credit rating in recent months. “It’s important to me that our partners, investors in Israel and abroad, know our hands are firmly on the wheel,” he said.
Pointing out that the shekel was up eight percent against the dollar last Friday, Smotrich argued that the International Monetary Fund and the credit rating agencies were “misreading the Israeli economy.”
Smotrich also highlighted that tech funding in October reached $9 billion year-on-year — fourth only to Silicon Valley, New York City and Boston: “The economy’s working much better than might have been expected.”
He also argued that Trump’s victory provides an opportunity to topple the Islamic Republic of Iran: “We need to deal with the octopus head and eliminate the Iranian regime.”
“We should join hands on this with the new Trump administration. The Western world cannot afford a dictatorial regime which strives for nuclear weapons and threatens to destroy it,” Smotrich said.
Hook said last month that the Trump administration was not seeking regime change in Iran but would take a much harder line against Tehran.
Time to take advantage
Also on Monday, the far-right minister told Israeli reporters that the sudden fall of Bashar al-Assad in Syria marks a “dramatic change” in the Middle East that Israel should take advantage of, saying it was time to push for full occupation of Gaza and the re-establishment of settlements there.
“Enemies that seemed threatening and invincible to us are falling and crashing thanks to the power of the IDF and the transition from containment and defense to initiative and attack,” he argued.
“We are still in the middle of the campaign, but now is the time to complete the task and take advantage of the disintegration of the axis of evil to powerfully strike Iran, which is the head of the snake, before it has time to recover from the series of blows we have inflicted on it and its arms,” the far-right politician told reporters in the Knesset ahead of his Religious Zionism party’s weekly faction meeting.
Meanwhile, in the south, “we must also complete the task of occupying Gaza and destroying Hamas in order to return all the hostages and ensure that [the terror group] no longer poses a threat to Israel,” he added.
“The time has come to occupy the territory and take civilian control of Gaza from Hamas, thereby cutting it off from its source of oxygen that still keeps it alive. We have now seen in Syria how the regime’s leaders flee like mice as soon as they realize that they have lost power and control over the citizens. We can do it in Gaza, too,” he said.
“Instead of talking about partial deals that will leave behind many of the hostages… we need to step on the gas pedal, stop being afraid of our own shadow, and do what is required,” he added.
Prime Minister Benjamin Netanyahu has repeatedly denied that Israel intends to resettle the Strip. However, his pro-settler coalition partners, and members of his own Likud party, have increasingly lobbied for resettlement.
Turning to Netanyahu’s ongoing corruption trial, Smotrich asserted that requiring him to begin testifying on Tuesday “seriously harms national interests,” and that whoever ignores warnings about this “may be found responsible for security failures and history will judge them for it.”
Nearly every member of the 11-person security cabinet signed a letter Sunday to Attorney General Gali Baharav-Miara and judiciary director Judge Tzachi Uziel to request that Netanyahu’s testimony be delayed in light of developments in Syria.
Smotrich argued that as a member of the security cabinet, he is exposed to information both public and confidential and that he supported delaying the testimony based on this.
“The fact that the prime minister is required to appear in court at such a critical time is nothing less than bizarre, and constitutes a serious violation of national interests,” he stated.
Even before the developments in Syria, Netanyahu’s lawyers had repeatedly attempted to have the testimony delayed, citing the need to attend to war-related matters. Netanyahu’s opponents have accused him of trying to indefinitely push off his potentially damaging testimony.
Netanyahu has insisted that he can continue running the country’s affairs effectively regardless of his trial. In recent days his allies have argued otherwise, but have placed the blame on the court for failing to accommodate the premier’s needs.
Smotrich said he hopes that in “the moment of truth,” the attorney general and the court will reverse course “and allow the prime minister to manage the affairs of the war.”
All ministers in the security cabinet apart from Foreign Minister Gideon Sa’ar and his fellow New Hope member Minister Ze’ev Elkin signed the letter seeking the delay. However, Sa’ar sent his own request in a similar vein to Baharav-Miara on Sunday.
Netanyahu is scheduled to begin his testimony in an underground room in the Tel Aviv District Court on Tuesday at 10 a.m. The testimony has been pushed off several times by the ongoing war in Gaza, fighting in Lebanon and security concerns regarding shelter space in the Jerusalem District Court building where the trial has been held until now. Netanyahu’s defense team recently agreed to stop requesting delays.
The ministers wrote that the fact the prime minister will be required to present himself in court three times a week “at this crucial hour” was “nothing short of bizarre and completely reckless, and a serious harm to national interests” as well as “a loss of basic values.”
The ministers demanded that the attorney general and the court “find a solution that will enable [Netanyahu] to fulfill his central role in leading the country at this fateful time.”
Any decision on delaying Netanyahu’s testimony lies with the court.
The premier is on trial for bribery, fraud, and breach of trust in Case 4000, on allegations that he authorized regulatory decisions to benefit a telecommunications tycoon in exchange for more favorable media coverage on a news outlet owned by the businessman.
Netanyahu also faces fraud and breach of trust charges in two other cases. One, Case 2000, concerns allegations Netanyahu tried to obtain positive media coverage in the Yedioth Ahronoth newspaper in exchange for legislation curtailing its competitor, Israel Hayom. In the other, Case 1000, prosecutors say Netanyahu inappropriately received expensive gifts from billionaire benefactors.
The premier has consistently denied any wrongdoing in all three cases. He has claimed, without evidence, that the charges were fabricated in a witch hunt led by the police and state prosecution.
