Israel, the United States, Saudi Arabia and the Fahd Plan of 1981: an historic missed opportunity

In August 2020, Israel announced that it reached historic peace deals with the United Arab Emirates and Bahrain that would become known as the Abraham Accords. At the same time, over the past five years, formal and informal ties between senior Israelis and Saudis have intensified, amid the shared perception of a threat from Iran. Yet amid the excitement over Israel’s quiet cooperation with the Saudis, there has been little scrutiny of the fact that forty years ago, the attitude of the Israeli government and much of the opposition towards Riyadh was not too dissimilar to the current mindset vis-a-vis the Islamic Republic of Iran which is viewed as an implacable enemy of the State of Israel. Indeed, in the wake of Saudi Crown Prince Fahd bin Abdul Aziz Al Saud’s announcement of a peace initiative in August 1981 that appeared to implicitly recognize the Jewish State, Israel’s hostility towards Riyadh intensified dramatically. Rather than viewing the Fahd Plan as an opportunity worth exploring as a means to widening the circle of peace in the Middle East, Israel launched a vitriolic campaign to demonize the regime in Riyadh and came close to igniting a war with Saudi Arabia in November 1981.

Saudi Crown Prince Fahd gave an interview to the Saudi Press Agency on 7 August 1981, in which he unexpectedly announced an eight-point programme for solving the Arab-Israeli conflict. The Fahd Plan, as it became known, was submitted for approval to the Arab summit in Fez, Morocco, but sharp Arab divisions over its terms led to the summit’s collapse. The seventh point of the plan appeared to implicitly recognize the State of Israel, with the clause that ‘all states in the region should be able to live in peace’. The plan envisaged a Palestinian State on the West Bank with its capital in east Jerusalem.Footnote¹ When taking into account Arab politics at the time, the Saudi proposal was ground-breaking. Kostiner has claimed that this plan was not merely conciliation or mediation of a regional conflict but an attempt to pacify the entire Arab-Israeli conflict. It also sought to win over the West by demonstrating that the Saudis were pursuing peace.Footnote² Jones and Guzansky argue that the Fahd Plan’s de facto recognition of Israel was historic. Until the Fahd peace initiative, no Arab country—with the exception of Egypt—had recognized Israel.Footnote³

Yet Israel was greatly alarmed by the Saudi initiative and angrily rejected the Fahd Plan. In August 1980, Fahd had called for a jihad against Israel following the Knesset law’s reaffirmation of a united Jerusalem as its ‘eternal’ capital.Footnote⁴ However after initial scepticism, there was growing support within the United States for the peace plan which was viewed as a welcome development for US strategic interests in the region. President Reagan who had entered the White House eight months before the Fahd Plan was unveiled stated that Saudi leaders were now ‘talking peace plans rather than jihad—holy war against Israel’.Footnote⁵

Israel’s prime minister Menachem Begin was a devotee of the Revisionist Zionist leader Vladmir (Ze’ev) Jabotinsky. A core component of Jabotinsky’s ideology was the ‘Iron Wall’ doctrine which held that Arab opposition to Zionism could only be overcome by persistent crushing defeats which would finally compel the more moderate forces among the Arabs to seek a compromise.Footnote⁶ Arguably, such a moment of moderation arrived with the announcement of the Fahd plan in August 1981. Yet the Begin government and the Israeli opposition ignored the potential opening in Saudi Arabia. This was extraordinary given the ground-breaking nature of the Saudi initiative which even hawkish politicians such as Moshe Arens could not overlook. Israel’s public diplomacy in regard to Saudi Arabia was often crude, manipulative and lacked credibility. The Begin government’s campaign to demonize Saudi Arabia created a febrile atmosphere in Israel which had damaging implications for US-Israel relations.

In 1981 alone, there were a series of serious challenges to US-Israeli relations, including Israel’s attack on the Iraqi nuclear reactor in June, Israel’s announcement of the annexation of the Golan Heights in December, the impasse over the establishment of a Multinational Force in Sinai and the controversy over the US sale of AWACS (airborne warning and control systems) to Saudi Arabia . The United States suspended the delivery of F-16 aircraft to Israel in response to its attack on Iraq. Israel invested great efforts in trying to prevent the sale of AWACS to the Saudis and the episode raised tensions between Jerusalem and Washington. In fact, the cases of AWACS and the Fahd Plan were interlinked as will become clear in this article.

Yet the Fahd Plan has received comparatively little attention in the literature discussing US-Israel relations during the early Reagan era. It is presented as a marginal episode at best in the bibliography discussing Israel’s diplomatic relations and the Arab-Israel conflict. To be sure, scholars such as Podeh and Kostiner have written extensively on the role of Saudi Arabia in regional diplomacy and have discussed the Fahd plan at length. However, much of the recent scholarship on the US role in the Arab-Israeli peace efforts has either referred to it briefly in several sentences or ignored it altogether.Footnote⁷

This article draws on official documents from the United States released between 2011 and 2019, British papers that have been declassified between 2011 and 2013 as well as Israeli documents released between 2020 and 2021. The paper fills a gap in the literature in shedding new light on a major crisis in Israel-US relations which went well beyond the sale of arms to an Israeli adversary. The papers cited in this article reveal the lengths Israel was prepared to go to in order to demonize the Saudi regime and undermine Washington’s relations with Riyadh. The Begin government insisted that the Saudis were bent on seeking Israel’s destruction, when Riyadh was signalling its readiness to open a new chapter with the Jewish State. With a few notable exceptions, there was no significant political opposition or challenge to the Begin government’s actions. An early opportunity for potential cooperation between Israel and Saudi Arabia was therefore squandered.

Following the June 1967 War, the Khartoum Resolution, adopted by the Arab League on 1 September 1967, defined the Arab states position towards Israel as an insistence on the so-called ‘three no’s’—no peace with Israel, no recognition of Israel and no negotiation with Israel. Yet fourteen years later, the Saudis were hinting at a new diplomatic approach which held out the distant prospect of uniting the Arab world behind negotiation, recognition and even peace with Israel. From President Reagan down, the United States perceived this as a positive development. Even the US Secretary of State, Alexander Haig, consistent in his support for the policies of the Begin government, believed that the seventh clause of the Fahd Plan carried significance. The Reagan administration’s very refusal to disavow the proposal reflected its aspiration to strengthen ties with Riyadh and bring it into the peace process. The Israelis interpreted this as a sign that Washington was ready to abandon the Camp David process which had seen Israel and Egypt reach an historic peace agreement and an understanding over Palestinian autonomy, under the stewardship of the Carter administration. Moreover, the Begin government feared that a stronger US-Saudi relationship posed a threat to its own partnership with Washington. In contrast, Reagan administration officials maintained that Israel would ultimately gain through the United States building a closer relationship with the Saudis. Even the ambivalence of senior officials in the Reagan administration towards the Fahd plan provoked tensions between Israel and the United States which escalated to a full-blown crisis by November 1981.

The Fahd plan was understandably a non-starter for Israel because of its far-reaching demands such as the withdrawal from all Arab territory and the affirmation of the right of return for the Palestinians. However, the archival papers that this article draws upon suggest that there was a larger issue at stake: the very possibility that the Saudis could be willing to recognize Israel under certain conditions undermined the longstanding narrative that the Jewish State was surrounded by enemies that sought its destruction—a narrative that was already challenged by the historic 1979 peace treaty between Egypt and Israel. The Begin government had reached the limits of its concessions when it agreed to hand over the Sinai Peninsula to Egypt as part of the peace agreement. It deliberately chose to interpret the seventh point of the Fahd Plan in the most negative light, fearing that any other interpretation would run counter to Israel’s interests which ruled out territorial concessions to the Palestinians and any notion of an independent Palestinian State. Separately, the Likud-led government could not countenance the notion of the United States establishing a close strategic relationship with the Saudis which was perceived as a major threat to the US-Israel special relationship. Furthermore, in prioritizing its relationship with the United States over the cultivation of ties with the Arab states, Israel was effectively carrying out a policy that was leading to friction in its relationship with Washington—one that it had been so determined to protect.

The factors behind the Fahd Plan

Unlike its immediate Arab neighbours, Saudi Arabia and the other Gulf monarchies only rarely became directly involved in military operations against Israel.Footnote⁸ However, following the Six-Day War of 1967, with Egypt, Jordan and Syria suffering economic setbacks, Saudi Arabia as the region’s largest oil producer and the host of Islam’s two holiest shrines asserted its claim to leadership of the Islamic World and became a prominent champion of the Palestinian cause.Footnote⁹ Moreover, the Saudis played a leading role in the imposition of oil embargoes against a number of Western states, including the United Kingdom and the United States, for their perceived support of Israel in the June 1967 war. The most successful embargo was imposed immediately following the October 1973 war. Only those nations that were supportive of the Arab position or who were actively pressuring Israel to make significant concessions were excluded from it.Footnote¹⁰ Thus, Israel’s hostility towards Saudi Arabia was well founded.

In the course of the 1970s and the early 1980s, the Saudis worked actively in a bid to enhance their status in the region. Thus, in October 1976, the Saudis brought the leaders of Egypt and Syria to Riyadh, in a bid to defuse tensions between the two countries. The success of Saudi Arabia in improving ties between Egypt and Syria encouraged it to formulate a unified Arab position on Israel hinging upon an agreement with Egypt, Syria and Saudi Arabia. The idea was that these countries would present a peace proposal to US president Jimmy Carter in April 1977, but the negotiations between Israel’s Begin government and Egypt’s President Anwar al-Sadat thwarted the Saudi plan.Footnote¹¹

Saudi Arabia viewed the signing of the Israel-Egypt peace treaty of March 1979 as an opportunity to expand its regional mediation role. The Saudis sought to develop a new peace initiative that would, at the same time, focus on the Palestinians and involve all of the Arab states. Through this initiative, they hoped to develop a new level of Arab solidarity, which would hinge on cooperation among all the Arab states. It was designed to end the inter-Arab tensions that had resulted from the Camp David Accords. The Saudis were also anxious to prevent a situation where Moscow would come to the assistance of radical Arab states, thereby igniting potential conflict with Israel and damaging the flow of Saudi oil supplies to the West.Footnote¹²

Saudi Arabia along with the Gulf States believed that a just solution to the Israeli-Palestinian conflict would bolster regional security. In the wake of the 1979 Islamic revolution in Iran, Iranian propaganda threatened the legitimacy of the Gulf Arab rulers by depicting them as American and Zionist pawns. Iran’s new leaders accused Saudi Arabia, Egypt and Jordan of abandoning their Islamic obligation to Palestinians, while at the same time asserting that Iran was the last true defender of Palestine. Saudi Arabia sought to cultivate a unified Arab position against Iran vis-à-vis Israel while positioning itself as the key coordinator of moderate policy in the Arab world.Footnote¹³

Thus, the ‘Fahd Plan’ has to be seen in this context. It called for Israeli withdrawal from all Arab territory occupied in 1967, including Arab Jerusalem; the removal of all Israeli settlements; affirmation of the right of Palestinian refugees to return to their homeland and of compensation for those unwilling to return; a transition period of regime transfer for the West Bank and Gaza, not exceeding several months, under the auspices of the UN; and the establishment of a Palestinian state with Jerusalem as its capital. Of the eight points of the Fahd Plan, the most controversial was the seventh, which said: ‘All states in the region should be able to live in peace’—an implicit recognition of Israel.

Up to this point, with the exception of Egypt, no Arab state had been willing to recognize Israel’s right to exist, even using such a vague formula. Yet the relative Saudi moderation in relation to the Arab-Israel conflict did not begin with the Fahd Plan. In May 1977, Fahd came to Washington to meet with President Carter and discuss the possibility of securing a Middle East peace settlement. Fahd made it clear that the Saudis would be prepared to live alongside Israel if the territories that Israel had occupied in 1967 were returned to the Arabs with minor border adjustments. The Saudis wanted the Palestinians to have their own independent state. Fahd later told US Secretary of State Cyrus Vance after the historic trip of Egyptian President Anwar Sadat to Jerusalem in November 1977 that it ‘was an impulsive act’ but also an ‘important step’. He later told Carter that the Saudis wanted Sadat to succeed. Carter noted that the Saudi Crown Prince was ‘eager to accommodate us on almost anything I request’.Footnote¹⁴ Furthermore, in the late 1970s, the Saudis had exerted pressures on the PLO leadership to accept UN Resolution 242 which called for a just and lasting peace in which every state in the area could live in peace and security.Footnote¹⁵

The Saudis were open in their talks with other Arab leaders regarding recognition of Israel. Fahd had told Britain’s ambassador to Saudi Arabia, James Craig, of his conversation with Syria’s Hafez Assad who was opposed to the Fahd plan. Assad admonished Fahd for ‘giving Israel a commitment’. Fahd responded: ‘Can you say Israel does not exist?’ President Chadli Bendjedid of Algeria said to the Saudi Crown Prince that it was Algerian policy to support only what the Palestinians approved of. Fahd replied that the Palestinians were sceptical of the seventh point, but everyone supported UN Resolution 242, even the Syrians to some degree. ‘What did “secure borders” mean if not that Israel should continue to exist?’ Fahd said to Chadli that this was an opportunity that the Arabs should not let slip. ‘Leave Israel to do the refusing’.Footnote¹⁶

Some months later in November, the British foreign secretary Lord Carrington held talks with Fahd in Riyadh. Carrington stated that the Israelis used Arab non-recognition of Israel as an excuse for their unwillingness to negotiate. They would maintain that the seventh point of Prince Fahd’s plan did not acknowledge their right to exist because the Arabs believed that Israel was not a state. Fahd responded that Israel was ‘naturally included as a country in the region’. But he questioned why Israel did not first accept the eight points and then offer conditional withdrawal on the proviso that the Arabs recognize their right to exist. Fahd had also told Carrington of a conversation with Arafat in which he had urged the PLO leader to help the Palestinian cause by being the first to endorse his eight points.Footnote¹⁷

The Fahd peace plan was driven by several Saudi interests, including securing the approval of the US Senate for selling AWACS aircraft and F-15 equipment to Saudi Arabia. By initiating a moderate plan that implicitly recognized Israel, the Saudis hoped to persuade the United States to develop closer relations with it, at the expense of its ties with Israel, with a view to eventually bringing about a US-PLO dialogue—a prospect that terrified Israel which viewed the PLO as a terrorist organization. Riyadh was concerned that the US Congress under pressure from the pro-Israel lobby would prevent an arms deal that was deemed to be a threat to Israel’s military dominance in the region. The initiative was designed to send a signal, both to Washington and the wider region, that Saudi Arabia was a dependable partner for peace, and a responsible power that was ready to contribute towards regional stability, amid the threat from the Soviet Union.Footnote¹⁸

It was clear that President Reagan shared this view. He had written that ‘the basis for such stability’ in the Middle East ‘must be peace between Israel and the Arab nations. The Saudis are a key to this’. Reagan sought to increase the cost of Moscow’s expansionist foreign policy by promoting democracy, heightening military spending and supporting anti-Soviet insurgencies in the developing world. Senior figures in the Reagan administration viewed Saudi Arabia as a useful partner in advancing this doctrine, which Riyadh enthusiastically supported. Reagan believed ‘it was important to strengthen ties with this relatively moderate country, not only because its oil exports were essential to our economy, but because, like Israel, it wanted to resist Soviet expansion in the region’.Footnote¹⁹ Reagan inherited a pledge made by the Carter administration to provide airborne early-warning aircraft to the Saudis including additional equipment on the F-15s that Carter had sold them. The US president viewed the AWACS sale as a way to demonstrate US credibility to its Arab allies:

Saudi Arabia looked to the United States for new markets and for support in the modernization of its country. Above all, Fahd believed that Saudi Arabia’s security was best safeguarded by close ties to Washington.Footnote²¹ In addition, Saudi Arabia feared that the Soviet Union would exploit its relations with the radical Arab regimes, such as Iraq, Syria and Libya, to increase its influence and embolden those governments that were opposed to the Gulf monarchies. Any failure to resolve the Arab-Israel conflict would play into the hands of the so-called rejectionist regimes and potentially damage the flow of Saudi oil exports to the West.Footnote²²

The US reaction to the Fahd Plan

Initially, the public US reaction to the Fahd Plan was unenthusiastic. The tepid US reaction stemmed from the Reagan administration’s unwillingness to get entangled in the Arab-Israeli conflict, which, at that point, was considered a low priority in Washington. In particular, the United States was unwilling to deviate from the Camp David track. Of all the senior figures in the Reagan administration, Haig was one of the most dismissive when it came to the Fahd plan. However, he also believed that the Camp David process was deficient because no effort was made to bring in additional Arab countries.Footnote²³ Yet Haig’s refusal to reject the Saudi peace proposal, as long as it was on the table, angered the Israelis and heightened their suspicion of the motives of the Reagan administration. Furthermore, President Reagan was unrestrained in expressing support for the Fahd plan.

It was a priority for the United States to construct a geopolitical bulwark against what was perceived as an imminent Soviet threat to Gulf stability following the Iranian Revolution and the Soviet invasion of Afghanistan, both in 1979. Saudi Arabia was viewed as a key player in fending off the Soviet threat in the region because of its geopolitical position, its oil and petrodollar reserves, its dependence on Western military equipment and its strong anticommunism.Footnote²⁴ Arguably, this was a significant factor in the Reagan administration’s growing inclination to give the Saudi initiative a chance. The Saudi monarchy at this time was generally divided between ‘liberals’ led by Fahd and ‘conservatives’ led by Prince Abdallah who was third in line to the throne and a half-brother of Khalid and Fahd. Although both factions were pro-American, the conservatives were more suspicious of the United States and concerned that the pace of change was too rapid.Footnote²⁵

The AWACS and F-15 equipment sale, which was finally approved by the Senate in October 1981, was connected to President Reagan’s determination to strengthen US-Saudi relations. The Reagan administration believed that the sale of AWACS strengthened the US strategic posture in a ‘vital’ arena and it provided the foundation for initiatives designed to bring Saudi Arabia and other moderate Arab states into the peace process.Footnote²⁶ Indeed, the Reagan administration had come out publicly with the argument that the AWACS deal was essential for the peace process. In order for the process to succeed, the United States believed that Saudi Arabia, as the most influential of the moderate Arab states had to play a greater role.Footnote²⁷ Thus, from a US perspective, in spite of some early misgivings, the Fahd plan overall was a welcome development.

During a visit to Washington in September 1981, Begin had expressed his opposition to the AWACS sale in the strongest terms, describing it as a grave threat to Israel’s security. Pro-Israeli organizations lobbied intensively in Congress to thwart the sale. Reagan was surprised by the intensity of Jewish opposition to the AWACS sale to Saudi Arabia, and wrote in his diary: ‘It must be plain to them, they’ve never had a better friend of Israel in the W.H. than they have now’.Footnote²⁸

The United States became more supportive of the Fahd Plan in the wake of the assassination of Egypt’s President Sadat, in October 1981. The death of Sadat and the uncertainty over the future direction of Egypt’s orientation meant that the United States would need to develop stronger ties with other moderate Arab countries. The demise of Sadat and the fall of the Shah in Iran, two strongly pro-American leaders, forced the United States to seek closer ties with Saudi Arabia.Footnote²⁹ The US president stated in the wake of the successful AWACS vote in Congress that ‘it was the first time they [Saudi Arabia] had recognized Israel as a nation and it is a beginning point for negotiations’.Footnote³⁰

Israel’s response to the Fahd Plan

Israel’s prime minister, Menachem Begin, led the way with his fierce denunciation of the Fahd plan and his hostility towards the Saudi regime. In November 1981, Begin described Saudi Arabia as ‘a desert petro-dollar state, where the darkness of the Middle Ages still exists, with the amputation of hands and heads, with unheard of corruption’.Footnote³¹ In a meeting with the US Ambassador, Samuel Lewis, Begin described the Fahd plan as ‘the peace plan of the graveyard. In the graveyard there is complete peace’.Footnote³² Opposition leader Shimon Peres agreed, describing the plan as a ‘decorated version of extreme Arab positions, which pay some pale lip-service to world public opinion’.Footnote³³ This deep-seated negative perception of Arab intentions brought many Israelis to distrust every Arab initiative, even when expressed in peaceful language.

By November 1981, the tensions between Israel and the United States over the Fahd plan had become so acute that Israeli parliamentarians established a bipartisan delegation to promote the government position in the United States. Israel’s Labour opposition stood firmly behind Begin’s position. Indeed, some Labour politicians such as Chaim Herzog outflanked their Likud counterparts in their opposition to the Saudi initiative. There was no attempt even to make the case that the Fahd plan with all its flaws could constitute a potential starting point for negotiations with the Saudis. Intriguingly, it was the hawkish Likud MK Moshe Arens, as the head of the delegation, alongside Labour MK Victor Shem-Tov, who came closest to suggesting that the Fahd plan could be viewed as a step forward.Footnote³⁴

Yet the US State Department maintained that the fierce opposition of the Israelis to the Fahd plan was not simply a result of its defeat over the AWACS deal or the fear that close US-Saudi ties would undermine the bilateral relationship with Washington. The Begin government was nurturing a paranoid mindset:

However, there is evidence that some within Israel’s government did believe that the Arabs were ready to make peace with Israel but they were simply unwilling to pay the price of such a peace. There were at least two attempts by the Saudis during 1977 to establish direct covert contact with Israel but these initiatives were spurned.Footnote³⁶ Moshe Dayan, a leading Labour personality who had become foreign minister under the first Begin government, expressed this view in 1977 when he stated in a conversation with US National Security Adviser Zbignew Brzezinski that ‘if Israel were offered peace tied to full withdrawal, he would oppose peace’. Dayan acknowledged that he believed that the Arabs were ready to sign peace treaties and this left Israel in an ‘awkward position’ in American and public opinion.Footnote³⁷

Israel and the United States at loggerheads over Saudi Arabia

The very suggestion that the Saudis were now ready to recognize Israel posed a threat to the longstanding narrative that Israel was encircled by enemies that sought its destruction. This narrative was already challenged by the peace treaty that Israel had signed with Egypt in 1979.

This was reflected in an extraordinary letter that Begin sent to President Reagan on 30 October in which he expressed fierce opposition to the US position on the Fahd plan:

The Begin government was not prepared to pay the price of peace or even to encourage the idea that the Saudis were changing their attitude towards Israel. Instead, Israel sought to demonize the Saudi regime in the hope of persuading the Americans to publicly reject the Fahd plan. Yet this policy backfired as the Reagan administration expressed growing public support for the Saudi initiative.

Through October and November, there were growing tensions between Israel and the United States over the Fahd plan. Following his meeting with George Lambrakis, US Regional Affairs Director at the State Department, Shlomo Marom, a counsellor in the Israeli Embassy in Washington, warned Jerusalem that the US would be increasingly likely to pursue other alternatives if the Camp David track reached a dead end.Footnote³⁹ The deadlock in the negotiations over Palestinian autonomy between 1979 and 1982 was linked in large part to the incompatible conceptions of the Israelis and Palestinians relating to autonomy. The Begin government was prepared to grant only limited individual autonomy to the Palestinian residents of the West Bank and the Gaza strip while Israel would claim sovereignty over these areas.Footnote⁴⁰

Lambrakis told Marom that the AWACS affair ‘had been blown up out of all proportion’ and that the Israelis were now seeking ‘an unnecessary confrontation’ over the Saudi plan. Lambrakis claimed that the AWACS saga had angered the president, his Secretary of State and his Defence Secretary, but they wanted to move on. Israel had to understand that the United States wanted to bring the Saudis and other like-minded countries towards Washington’s position. Lambrakis added that the United States was not moving towards the Saudis by abandoning Israel—rather, it was acting to protect US interests in the region by getting Riyadh to move ‘inch by inch’ in the direction of the United States and was doing so without harming Israel’s interests.Footnote⁴¹

The tensions between the United States and Israel over policy towards Saudi Arabia also exposed growing divisions within the Reagan administration over the Fahd plan. The US Secretary of Defence, Caspar Weinberger and other officials in the Pentagon believed that the United States was excessively supportive of Israel. Weinberger perceived Israeli policies as a liability and believed that the United States would be more effective in confronting Soviet threats by selling arms to the Saudis and other US allies in the Arab world. Weinberger argued that Israel would have more to gain by a stronger US relationship with Saudi Arabia:

Some US officials in the State Department expressed resentment over the Begin government’s efforts to thwart Washington’s objective to broaden the involvement of moderate Arab countries in the Middle East peace process. In a cable to London, Britain’s ambassador to the United States, Neville Henderson, reported that ‘the Israelis and their committed supporters in the US media appear determined to undercut what they see as a closer US/Saudi relationship following the AWACS decision and in particular to prevent any further shift of US opinion in favour of Fahd’s eight points’.Footnote⁴³ Frank Carlucci, the US Deputy Defence Secretary told Henderson, that the Israeli response to the Fahd proposals and the AWACS sale demonstrated that they were working to prevent Washington getting too close to moderate Arab countries such as Saudi Arabia. Carlucci noted that AWACS was significant because of the opportunity it provided to develop the US relationship with the Saudis. He maintained that the greatest failure of the Camp David process was the exclusion of the Jordanians and Saudis. It would now be a priority for the United States to involve these two countries in the peace process.Footnote⁴⁴

While the US President and State Department officials viewed the Saudi initiative as an opportunity to be seized, some other White House officials remained sceptical and wary of angering Israel. There were concerns in the White House that the president’s positive remarks about the Saudi initiative were creating difficulties. In a memo to President Reagan, national security adviser Richard V. Allen wrote:

Amid Israel’s growing agitation over the Fahd plan, US State Department officials took pains to calm the concerns over Reagan’s positive remarks. Thus, Robert McFarlane, a counsellor in the US State Department, told Israel’s ambassador to Washington, Ephraim Evron, that the US President’s remarks on the Fahd Plan were ‘injudicious’ and came in the wake of the euphoria of his victory in the Senate vote on the AWACS deal. McFarlane said to Evron that he understood why Reagan’s remarks had provoked anxiety in Israel but sought to reassure him that there was no ‘wrongheadedness’ or ‘maliciousness’ on the part of the US president. Evron responded that while he was pleased to receive this reassurance, the words of the president and other administration officials had caused great harm to the peace process and had stirred up Israeli fears and suspicions that would not quickly subside.Footnote⁴⁶

McFarlane said to Evron that the Reagan administration had shown naivety in its ‘receptivity to the seductive approach to the Saudis’. Incomprehensibly, the Reagan administration was ready to believe everything that it heard from the Saudi regime. Moreover, continued McFarlane, ‘Washington is beguiled by their wealth’. The US official blamed this on the ignorance among Reagan administration officials when it came to political realities in the Middle East. McFarlane claimed that with the exception of Haig, there were no senior officials in the administration with policy planning experience. Instead, policy was made on ad hoc basis in response to developments, particularly in the Middle East. The US President had good instincts but in order to make good decisions, he needed to have information at his disposal and to be acquainted with the facts—this did not currently exist in the White House. Reagan possessed only ‘primitive knowledge’.Footnote⁴⁷

In November, the Begin government with the backing of the Labour opposition sent a joint parliamentary delegation headed by Moshe Arens to the United States to explain Israel’s position to Washington. It was the Labour politician Chaim Herzog who was among the fiercest critics of the US policy. During the delegation’s meeting with Haig, Herzog remarked:

There was no evidence for the Israeli claim that the PLO had ‘dictated’ the contents of the Fahd plan. The Saudis did provide the PLO with an update on details of the plan. While the PLO leader Yasser Arafat had expressed some support for the Fahd proposals, there was substantial opposition within the PLO.Footnote⁴⁹ Haig responded by stating that there was no alternative to Camp David. The United States totally rejected the Fahd plan’s clauses in relation to Jerusalem and a Palestinian State. All issues had to be resolved through negotiations. Yet, he also told the Israeli parliamentary delegation that they would be surprised to learn that the moderate Arab states also wanted to see the peace process succeed. The eight points did not reflect the position of the United States but they implied Saudi recognition of Israel and its readiness to become involved in the peace process. This was a positive step but no more than that. Arens countered that Saudi Arabia was a fundamentalist Arab state that spoke of Jihad. He continued, ‘so when they make a statement that could imply recognition of Israel, it’s a step ahead but unless it is made clear that the precondition is talking, they have a long way to go’.Footnote⁵⁰

Arens would soon discover that his remark about Saudi Arabia had caused discomfort for the Israeli hasbara campaign in the United States. Israel’s embassy in Washington acknowledged that the remarks made by Arens were a public relations debacle but insisted that the delegation had put its message across effectively.Footnote⁵¹ Upon the delegation’s return to Israel, Arens appeared before the Knesset Foreign Affairs and Defence Committee and expressed frustration over the US media coverage of his comments. After all, he had told the Americans that the Fahd plan was unacceptable and compelled Israel to accept conditions that placed it in danger. Yet Arens admitted that the plan hinted at the possibility that the Saudis could recognize the existence of the State of Israel under certain conditions. However, the Saudis would need to learn to mention the State of Israel by name and to negotiate without preconditions. He regretted the fact that his words had been taken out of context. However, Arens also had criticisms of Israel’s public diplomacy: ‘A hasbara campaign that ignores the facts is not a hasbara campaign. It is true that the Saudis have changed their tactics … You cannot claim that [the Fahd plan] is synonymous with Jihad’.Footnote⁵² Dror Zeigerman, a Likud MK, added that while the Fahd plan was unacceptable, he believed it was regrettable that the Knesset had ignored the statement Arens made regarding the ‘interesting change’ in Saudi policy.Footnote⁵³

The Labour MK Victor Shem-Tov was the most outspoken in criticizing his Knesset colleagues for ignoring the change in the Saudi position. He argued that the Saudis had reached the conclusion that the continuing Arab-Israel conflict was increasing radicalization in the Arab world and that the Soviet exploitation of this situation posed a danger to the future of the Saudi regime. The Saudis now realized that Israel could not be destroyed and that there was a need for the conflict to be resolved through diplomatic means. Addressing Arens, Shem-Tov remarked:

In the course of November 1981, Israel hardened its position over the Saudi plan. Israel’s foreign minister Yitzhak Shamir told Haig that the Israeli public was disappointed and embarrassed by the US support for the Fahd plan.Footnote⁵⁵ The assistant secretary of state for Near Eastern and South Asian Affairs, Nicholas Veliotes, told Henderson that the atmosphere in Israel was ‘explosive’. The Americans were having ‘serious problems’ with the Israelis who were insisting that they reject the Fahd plan. Washington was doing its utmost to calm the situation amid Israeli threats to move into Lebanon.Footnote⁵⁶ Veliotes maintained that the Americans were trapped between the Saudi desire for a positive US response to the Fahd initiative and Israel’s insistence on an absolute rejection of the eight points. The administration had therefore decided to say nothing more in public about it. It was not in US interests therefore to make further public statements about the Fahd plan amid the rising uncertainty and anxiety in Israel which the Americans were trying to dampen down.Footnote⁵⁷

Haig had spoken to Henderson about ‘paranoia’ in Israel.Footnote⁵⁸ He wrote to Carrington on 5 November to inform him that ‘the last 48 hours have seen a deepening of the tensions in our relationships with Israel and we now have a full blown crisis on our hands’.Footnote⁵⁹ Britain's ambassador to Israel, Patrick Moberly cabled the British Foreign Office, maintaining that Israel’s confrontational approach towards Washington reflected the hardening public mood, combining a deep distrust of American motives and a strong dislike of the European policy towards the Arab-Israeli conflict. They were convinced that ‘the rest of the world was now determined to gang up on little Israel’.Footnote⁶⁰ In a separate dispatch, the British ambassador also presented a grim picture of worsening US-Israel relations:

Haig’s deep concern was reflected in a note he sent to President Reagan. Haig reported Arens’ anxiety over the perception that the regional balance of power was shifting against Israel and the fear that the Arabs would speculate that they could now defeat Israel militarily. The US secretary of state was worried that ‘this kind of mentality could lead to an Israeli first strike in the region’ and was anxious to reassure Arens of America’s support.Footnote⁶² Henderson reported in a cable to London that the US Ambassador to Israel had never before seen the Israelis in such a state of tension and uncertainty as they were after the AWACS decision and the favourable comments by US leaders on the Fahd plan. Henderson added that ‘Haig evidently believes the Israelis may be about to go over the edge and wants to do everything possible to stop them’.Footnote⁶³

The Israeli incursions into Saudi Arabia

Israel had already overflown Saudi territory in June 1981 when it launched an attack on Iraq’s nuclear reactor in Osirak, exposing Saudi Arabia’s vulnerability.Footnote⁶⁴ On 9 November, Israel carried out a number of reconnaissance flights over the Saudi Tabuk airfield. The Saudis warned the Americans that they would open fire if the aircraft encroached again. They feared the Israeli action was a dress rehearsal for an attack on Tabuk. The Saudis had put their missiles into position and were on a very high state of alert. The US ambassador in Saudi Arabia, Richard Murphy, had no hard information on the reasons for the Israeli action, but believed that ‘the Israelis simply wanted to give a fright to Arabs who went around touting peace plans’. According to Murphy, the action had included not only Israeli jets but also a hawkeye aircraft. A similar incident had taken place a month earlier, but the Saudis sought to keep it quiet and denied that there had been a violation of airspace. On this occasion, reports of the Israeli action were covered on the front pages of Saudi newspapers, with Riyadh exploiting the propaganda value of depicting the Israelis as warlike and aggressive while the Arabs were doing their utmost to secure peace.Footnote⁶⁵

The Americans urged the Saudis to avoid action that would exacerbate the situation. The Saudis notified the Americans that six Israeli aircraft had penetrated Saudi airspace. The US Ambassador to Israel, Samuel Lewis, told the Israelis in the strongest terms to halt the overflights.Footnote⁶⁶ In a memorandum to President Reagan, Haig claimed that the overflights were a ‘deliberate Israeli signal’ to the United States that Israel now regarded Saudi Arabia as a threat requiring periodic airspace violations, although the Israelis had also told the Americans that such flights should not be interpreted as ‘a warlike act’ against Riyadh.Footnote⁶⁷

The United States viewed the Israeli incursions as a fundamental violation of a pledge made by Begin to Carter in 1977 that Israel would not overfly Saudi Arabia. Although previous Israeli violations of Saudi airspace had taken place, the action of 9 November was a significant escalation. The Israelis had denied the incursions when first pressed by the Americans on the matter, but they eventually admitted responsibility in the wake of the Saudi publicity. One US official told Henderson that the violations were part of an Israeli campaign to undermine US-Saudi relations and a sign that Israel no longer trusted the United States to fulfill its part of the Begin-Carter agreement. The Israelis were increasingly treating Saudi Arabia as a frontline state.Footnote⁶⁸ Haig wrote to Reagan that the United States would have to make it clear to the Israelis and in public statements that it could not ‘condone any such violations of Saudi airspace’.Footnote⁶⁹

The rejection of the Fahd Plan at the fez summit

The Fahd plan was facing strong opposition within the Arab world. Syria rejected the plan, arguing that it was too conciliatory towards Israel and failed to stipulate a timetable for Israeli withdrawal from the occupied territories. The extremist forces in the region also believed that the Fahd plan did not give sufficient support to Arab objections to the Camp David accords. The Saudi effort to obtain formal Arab League recognition for the Fahd Plan was foiled by Syria at the onset of the Arab summit meeting in Fez, Morocco, in November 1981.Footnote⁷⁰ Haig reported to Reagan that the moderates adjourned the summit once they saw that the radicals could not accept even the implied recognition of Israel. Arafat had tried to sit on the fence, and his unwillingness to support the Fahd plan had ‘doomed its prospects at the summit’.Footnote⁷¹ Senior US diplomat Walter J. Stoessel expressed relief over the outcome of the summit, and wrote to the president:

Britain’s ambassador to Saudi Arabia, James Craig, told his colleagues in London: ‘Fahd will now feel that he has done his bit for peace. If his efforts have failed, it is not his fault. Someone else must now try’.Footnote⁷³

A relieved Shamir observed during his meeting with Haig: ‘It is clear that when the Arabs assemble, there is no agreement. Once again, it has become clear that Saudi Arabia has more influence in the West than in the Arab world’.Footnote⁷⁴ The Saudis, however, were not willing just yet to give up on their peace plan. The plan was reintroduced by Saudi Arabia at another Fez Conference of the Arab League in September 1982 towards the end of the Lebanon War. This time, the point emphasizing that all states in the region have a right to exist was eliminated. In its place was a point which stipulated that the UN Security Council would provide guarantees of peace among all states in the region, including an independent Palestinian state. The Syrians and Palestinians accepted what now became known as the Fez plan. In another point, the PLO was described as the ‘sole legitimate representative of the Palestinian people’. The Fez plan was effective in bringing the Arabs together in support of a peace formulation and was accepted as an Arab programme for peace by the Arab League.Footnote⁷⁵

However, the Arab peace plan ultimately fell by the wayside. The Saudi deputy foreign minister Abdal Rahman Mansouri told Craig that it was no longer a Saudi plan so there could be no expectation of the Saudis taking the lead to promote it.Footnote⁷⁶ The Saudis had enthusiastically launched their peace initiative in August 1981, but no other Arab country was willing to lead the newly adopted Arab plan. Israel rejected it out of hand because of the call for an independent Palestinian State and the significant role attached to the PLO. The United States quickly withheld its support in the face of Israel’s fierce opposition.Footnote⁷⁷ Moreover, the Reagan administration did remarkably little to promote its own peace plan that was unveiled in early September 1982, at the height of the fighting in Lebanon because of Israel’s opposition. The Reagan plan supported the establishment of a self-governing Palestinian authority which would be established through free elections in association with Jordan on the West Bank. While the plan called for an immediate settlement freeze by Israel in the territories, Reagan emphasized that the United States would not support the establishment of an independent Palestinian State in the West Bank and Gaza. Jerusalem would remain undivided, but its final status would be decided through negotiation. Even this was too much for Begin who wrote to the US President stating that ‘a friend does not weaken his friend; an ally does not put his ally in jeopardy’.Footnote⁷⁸

Exactly twenty years later, King Fahd’s brother, Crown Prince Abdullah bin Abdulaziz Al-Saud followed in his footsteps with a new peace initiative in February 2002 offering full normalization with Arab states in exchange for Israel’s withdrawal from the entire Occupied Territories.Footnote⁷⁹ This time round, the main Saudi motivation for the initiative was to improve its image in the United States following the involvement of Saudi hijackers in the September 11 terrorist attacks although it also viewed the peace plan as an attempt to contain the violence of the second Palestinian uprising of 2000 which was destabilizing the Middle East.Footnote⁸⁰ The Saudi initiative was also motivated by concerns over Iran’s growing clout in the Middle East and the need to consolidate its influence among Sunni Arabs.Footnote⁸¹ Yet Israel’s prime minister Ariel Sharon did not provide a formal response to the Saudi initiative.

The following month, the Arab League modified and adopted Crown Prince Abdullah’s peace proposal, much as it did with the Fahd plan of 1981 with what became known as the Arab Peace Initiative (API). The API called for Israel to withdraw from all the Occupied Territories and to accept an independent Palestinian State with East Jerusalem as its capital in return for normal relations between all the Arab states and Israel in the framework of a comprehensive peace agreement. With regard to the Palestinian refugees, it was stated that ‘a just solution’ would have ‘to be agreed upon on the basis of UN General Assembly Resolution 194’. In return, the Arab states offered to ‘consider the Arab-Israeli conflict ended, and enter into a peace agreement with Israel, and provide security for all the states in the region’.Footnote⁸² However, amid the bloodshed of the second Palestinian Intifada, the API had limited appeal in Israel. Furthermore, the inclusion of the reference to UN Resolution 194 and the right of return of Palestinian refugees to Israel enabled critics to claim that the API was a denial of Israel’s right to exist as a Jewish State.Footnote⁸³

Conclusion

Rabi and Mueller have argued that the API ‘effectively reversed the “three no’s” of the 1967 Khartoum Summit’ and constituted ‘a major break with the past’.Footnote⁸⁴ However, the ‘three no’s’ of the Khartoum Summit were rendered irrelevant at least two decades earlier. The Saudis reached out to Israel in the late 1970s and the announcement of the Fahd plan in August 1981 signalled a readiness to recognize Israel. Yet, Israel emphatically rejected this opportunity to transform Israel’s relations with Saudi Arabia.

Israel’s rejection of the Fahd Plan, in itself, cannot be viewed as a missed opportunity since the formula was too vague with far-reaching demands which no Israeli government at that time could have accepted. The opportunity squandered lay in Israel’s failure to build on the peace treaty with Egypt of 1979 and to at least explore the intriguing opening offered by the Saudis, as a means to breaking out of its isolation in the Middle East. The Begin government could have argued that while the Fahd plan was unacceptable, it would have been willing to explore the opening offered by the Saudis, holding out the hope of eventually reaching a comprehensive resolution of the Arab-Israel conflict. The Saudis had a strong interest in defusing and resolving the conflict, amid the threats posed by the Soviet Union, the fledgling Islamic Republic of Iran and the radical Arab states, but Israel looked away.

Instead, the Begin government fostered an ‘us against the world’ mentality and a febrile atmosphere with crude, misleading and manipulative rhetoric regarding Saudi intentions to destroy the State of Israel. The United States was alarmed by what it perceived as the paranoid mindset of its close ally. The Begin government got so carried away in its fierce opposition to the Saudi initiative that it only narrowly avoided a major break with the United States. The rejection of the Fahd plan by the Fez summit in 1981 ultimately let the Israelis off the hook and helped to prevent a damaging rupture in the US-Israel relationship.

The escalating tensions between the United States and the Soviet Union helped the Begin government in its efforts to restore ties with Washington. Israel’s defence minister Sharon and the US defence secretary Weinberger signed a memorandum of understanding on strategic cooperation on 30 November in Washington.Footnote⁸⁵ The main goal of the memorandum was to deter Soviet threats in the Middle East. Israel positioned itself adeptly as an asset to the United States. Some US officials could see the risks of such an approach to wider US regional strategy, and remained unhappy with Israel’s pushback over policy towards Saudi Arabia, as well as its attack on the Iraqi nuclear reactor and the decision to annex the Golan Heights.Footnote⁸⁶ Nevertheless, by the end of 1981, President Reagan was more focused on the ideological struggle with the Soviet Union. He was ready to move on and would increasingly view Israel as a potential regional asset against the threat of Soviet penetration of the Middle East.

As for Saudi Arabia, the practice of announcing a plan, which could be modified as a result of consultation with other Arab parties, became a key component of future Saudi attempts at diplomacy between Israel and the Arabs. The Saudis were ready to establish coordination with other Arab states, including radical parties, but they also viewed cooperation with the United States as essential to achieving their prime objectives. The Saudis were aware that Washington had the strongest influence over Israel and was necessary for obtaining any Israeli cooperation. The anti-Soviet stance of the Saudis and their efforts to dampen down tensions in the region helped to cement the US perception that Riyadh was a regional asset and a partner.Footnote⁸⁷ For Saudi Arabia, through the 1980s and beyond, its efforts to establish itself as the leading coordinator of moderate policy in the Arab world helped it to become the region’s most influential actor in the international arena.Footnote⁸⁸

After the crisis over the Fahd plan subsided, Israel remained fiercely opposed to the sale of arms to Saudi Arabia and indeed other Arab countries, claiming that they threatened its qualitative military advantage over its Arab neighbours. Nevertheless, Israeli attitudes towards Saudi Arabia have now been transformed. There is quiet mutual cooperation between Israel and Saudi Arabia. Israel now expresses little opposition to the arming of the Saudis and other Gulf states because it perceives Riyadh as a potential partner in countering the rising threat from Iran.