2016: Current Surge of Terrorist Attacks is Evolving, Defense Exports are
Recovering
With the new Israel Defense issue making its way to subscribers and
bookstores, we give you a sneak peek to Amir Rapaport's column, analyzing
the terrorism surge in Israel, the situation in Azerbaijan, the US-aid
agreement and the Israeli defense export
Amir Rapaport | 19/05/2016
http://www.israeldefense.co.il/en/content/2016-current-surge-terrorist-attacks-evolving-defense-exports-are-recovering

Terrorism Surge

The data are very clear: at least judging by the number of attacks, the
current surge of terrorism that started in October 2015 is diminishing.
Nevertheless, the Israeli defense establishment is in no hurry to announce
that the current surge has ended, and the prevailing estimate is that it is
merely evolving.

In October 2015 there were no less than 78 terrorist attacks regarded by the
defense establishment as severe, owing to the fact that they were executed
using knives or firearms. In March 2016, the number of attacks dropped to 20
and in early April the attacks stopped altogether, right up to the suicide
bombing attack on board the Jerusalem bus on April 18, in which 19 persons
were injured.

Many reasons may be found for the decrease in the number of terrorist
attacks, but one thing is certain: the majority of the Palestinian public is
not involved in the current surge of terrorism, and just as important –
coordination with the security forces of the Palestinian Authority remain as
effective as ever. As far as the Palestinians are concerned, this is not the
result of their love for Israel, but the outcome of their concerns regarding
Hamas – which the Palestinian Fatah leadership in the Judea and Samaria
region shares with Israel.

The Israel Security Agency believes that the main reason for the decrease in
the scope of terrorism is the effectiveness of Israeli counterterrorism
efforts. In a situation where most of the territory of the Judea and Samaria
is surrounded by a security fence and IDF operate freely in the hearts of
all Palestinian cities, the potential for staging significant terrorist
attacks inside Israeli territory faces serious restrictions.

The above notwithstanding, the current surge of terrorist attacks cannot be
concluded yet. Historic precedents can actually lead to the opposite
conclusion, according to which the peak of the current surge is still ahead
of us.

For example, in the second Intifada that erupted in the year 2000, bus
bombings began only after shooting attacks had not produced the desired
effects in the Palestinians’ view. Can we deduce, then, that Hamas intends
to renew the suicide bomber attacks? According to ISA, attempts to stage
suicide bombing attacks were encountered throughout the recent months, but
they were prevented.

Meanwhile, one of the most serious concerns of the Israeli defense
establishment is a scenario where Mahmoud Abbas (Abu Mazen), Chairman of the
Palestinian Authority, decides to step down while voicing serious
accusations against Israel. A leadership reshuffle in the Palestinian
Authority can be accompanied by an eruption of widespread violence,
according to several scenarios currently being taken into consideration in
Israel.

Another important point: the terrorist attacks are not taking place in a
vacuum. Apparently, they derive their inspiration from the confrontations of
ISIS and from the regional chaos whose effects extend from Iraq to Europe.
That inspiration, along with the Islamic religious fervor, will remain with
us for a long period of time.

The Gaza Strip First?

The next evil, as far as Israel is concerned, may originate not only from
the Judea and Samaria but from the Hamas-dominated Gaza Strip as well.

The subterranean tunnel threat is particularly serious: a severe terrorist
attack by Hamas, staged through a tunnel leading into Israeli territory,
will render all statements regarding the diminishing Intifada ridiculous.
One effectively excavated tunnel leading into Israeli territory and
discovered during the month of April has demonstrated how serious this
threat really is.

The fact that Hamas is investing a tremendous effort in the building of new
tunnels is well known – tunnels had gained them a strategic achievement
vis-à-vis Israel, and Hamas has been preparing for the next confrontation
from the day the previous one had ended.

The primary change that has taken place in the time that passed since
Operation Protective Edge in the summer of 2014 involves the fact that Hamas
has lost the logistic infrastructure it had possessed during the reign of
the Muslim Brotherhood in Egypt, when most of the tunnels the organization
used during Operation Protective Edge had been excavated. Despite the
difficulties, the rate at which the excavation activity progresses is very
high. Thousands of inhabitants of the Gaza Strip are currently involved in
that activity.

Israel, on the other hand, has positioned the tunnel challenge at the very
top of its scale of priorities. Each and every idea on how to cope with this
threat is examined by the defense authorities. Hundreds of millions have
already been invested in various technological projects intended to locate
and “handle” the tunnels and in all probability – billions more will be
invested in the future. Apparently, intelligence supplied by human agents is
still of the utmost importance – along with a little bit of luck, which
always helps.

The discovery of the tunnel in the spring of 2016 has led to a state of high
tension in the southern region of Israel.

The assumption in Israel is that Hamas is constantly preparing for the next
round of fighting, but is not interested in such a round at this particular
point in time. The same applies to IDF. Nevertheless, a renewed round of
fighting can erupt owing to a “misunderstanding”. After all, it was an IAF
air strike against the opening of a tunnel near Kerem-Shalom that
constituted the move that led to Operation Protective Edge whose final
results could not be predicted.

Azerbaijan

The renewed conflict between Armenia and Azerbaijan in the Nagorno-Karabakh
region has once again illuminated the special relations Israel maintains
with Azerbaijan. According to reports that have not been denied,
Israeli-made UAVs were employed by the Azerbaijanis during the fighting.
Today it is no longer a secret that the relations between the two countries
started to develop a short while after the disintegration of the former
Soviet Union and after Azerbaijan became an independent state in 1993.

For many years, the relations between Israel and Azerbaijan remained a
secret. After more than 20 years, it was Azerbaijan that publicized its
relations with Israel, despite the intricacy of its international relations:
it has tense relations with Iran, which has a ‘minority group’ of 30 million
Azerbaijanis, and an alliance with Turkey, which is politically hostile to
Israel. On the other hand, Azerbaijan is involved in a severe conflict with
neighboring Armenia and has tense relations with Russia (this tension was
somewhat relieved recently pursuant to a visit by Russian President Vladimir
Putin). All of the states located on the shores of the Caspian Sea are
involved in severe economic conflicts over the gas and oil resources in that
sea.

Azerbaijan is a completely secular Shi’ite-Muslim state that shares a long
border with Iran. According to foreign sources, the Israeli Mossad has a
field station operating out of Azerbaijan. The Israeli defense industries
logged sales amounting to billions of dollars to Azerbaijan, especially
before the oil prices dropped. The reduced oil prices have adversely
affected the local economy and the Azerbaijani government is currently
facing difficulties committing to new purchases. However, the Aeronautics
Company of Israel has a UAV assembly plant in Baku, the capital of
Azerbaijan, in partnership with the local government.

3.7 Billion?

With all due respect to Israel’s other allies around the world, one
strategic alliance remains an inseparable element of Israel’s national
security concept: the alliance with the USA. Today, the main issue in the
context of the Israel-US relations is the question of the scope of defense
aid the USA will provide Israel with over the coming decade.

The present aid agreement came into effect during the time of the Bush
administration in 2008, and is valid through the end of 2017. According to
the agreement, Israel will receive a cumulative amount of about 30 billion
dollars over the course of a decade, in the form of an annual grant that
increases by 50 million dollars every year, as a compensation for the
devaluation of the US Dollar. According to this outline, Israel will receive
defense aid in the amount of more than 3.2 billion dollars this year,
including the compensation. Additionally, the USA finances various defense
projects such as the Arrow, Iron Dome and David’s Sling missile defense
systems, and more recently – technological systems intended to cope with the
subterranean tunnel threat – outside the scope of the aid agreement.

Israel has requested a dramatic expansion of the aid agreement as a
‘compensation’ for the implications of the nuclear agreement signed with
Iran in the summer of 2015. Allegedly, the agreement triggered an extensive
arms race in the Persian Gulf: both Iran and the Gulf states are acquiring
arms worth many billions of dollars from Russia, the USA and France, which
could adversely affect Israel’s strategic position. The USA itself sells
massive amounts of arms to such countries as Saudi Arabia, which is regarded
as a “moderate” state, but those arms could be directed at IDF in the
future, and Israel expects to be “compensated” for that, in order to
maintain her qualitative advantage, as prescribed by US law.

Prime Minister Netanyahu is in charge of the negotiations for the US aid,
through the National Security Council. As far as could be gathered thus far,
the USA is willing to increase the amount of annual aid to 3.7 billion
dollars per year. None of the parties to the negotiations has confirmed this
amount. It is a fact, however, that as late as May 2016, Prime Minister
Netanyahu has refused to sign the new agreement.

5.7 Billion

2016 began with a reshuffle at the Israel Ministry of Defense: the present
Director General, Maj. Gen. (res.) Dan Harel, decided to step down after
three years in that position. He will be replaced by Maj. Gen. (res.) Udi
Adam, who served as the Chairman of IMI Systems over the last few years.

Brig. Gen. (res.) Ofir Shoham, the head of MAFAT, IMOD’s Weapon System &
Technological Infrastructure Research & Development Administration, is also
retiring.

Udi Adam’s appointment as IMOD’s new DG could have implications on the
privatization of IMI Systems, which has been delayed recently after Elbit
Systems remained the only contestant in the bidding for the acquisition of
this defense industry. Elbit Systems does not appear to be over-enthusiastic
about concluding the transaction and the State of Israel is no longer in a
hurry to sell after the company had successfully completed a comprehensive
recovery program.

Harel can be particularly proud of two significant achievements during his
last year as IMOD’s DG – the agreement reached with the Ministry of Finance
regarding a long-term defense budget and the sales turnover of not less than
US$ 5.7 billion from Israeli defense exports in 2015, despite the fact that
during that year it had seemed that those exports would hardly reach the
four billion dollar bar.

Israel managed to maintain its status as one of the world’s top five defense
exporters, despite the difficult conditions that emerged pursuant to
worldwide defense budget cuts owing to the drop in oil prices and the end of
military operations in Afghanistan. The Israeli defense industries managed
to adapt themselves to new geographic markets (mainly in Asia) and to new
technological fields of activity (such as cyber).

This achievement may be attributed, first and foremost, to IMOD’s SIBAT
(Defense Export & Defense Cooperation) Division headed by Brig. Gen. (res.)
Michel Ben-Baruch and to the people of the industries, who travelled around
the world during the last quarter of 2015 and managed to close a long list
of important transactions.