Former Ambassador Daniel B. Shapiro Remarks IBCA Luncheon

Thank you for coming here today.  It’s an honor to be here with the Israel, Britain and the Commonwealth Association and I would like to especially thank Dr. Alan Webber for his kind introduction and Austen Science for his help arranging this terrific event.  I appreciate the work of this organization to build stronger ties between Israel and Great Britain, something I know my colleague, British Ambassador Matthew Gould, is also working hard it.  He is a great partner, and I think he is doing a wonderful job.

Many of you know that I spent some time in Israel as a boy, but you may not know that I also spent a year in England when I was in the fourth grade.  We traveled throughout the country, visiting castles, museums, Stratford-upon-Avon.  Now, growing up with two English professors as parents, one a Shakespeare professor, I remember there was some confusion about whether Israel or England was the true Holy Land—but, eventually I figured it out.

I’m really happy to have the chance to speak with this group in particular about the U.S.-Israel relationship.  President Obama recently observed that the deep partnership between the United States and Israel is rooted in people-to-people ties based on shared values and common ideals.  And that ideal also explains our mutual dedication to Israel, the democratic example for this part of the world, and our commitment to Israel’s security.

I will speak more about America’s commitment to Israel’s security in a moment.  But fundamentally, the special relationship between the U.S. and Israel starts from a proposition that Israel as a strong, secure, Jewish, democratic state is a fundamental interest of the U.S.  All our policies seek to promote this goal.  The strategic reason is that Israel is the best and most reliable ally in the Middle East.  It is the region’s only stable democracy, and it is a stellar security partner.  But there’s also a moral reason to support self-determination for the Jewish people in their historic homeland.  The ancient ties of the Jewish people to this land are a strong enough justification.  Jewish history, a history of anti-Semitism and persecution, adds to that imperative.  We were recently reminded of the importance of this imperative by the anti-Semitic hate crime that took place last month in Toulouse, which took four innocent lives.

At the heart of US-Israel relations is our commitment to Israel’s security.  Last month, I visited Be’er Sheva, where I was reminded of how fragile the security situation here can be, and how easily life can be disrupted in Israel.  Over 200 rockets were launched during the most recent round of strikes in southern Israel only days before my arrival.  One million Israelis are living under the constant threat of rockets and mortars from Gaza.  No other country in the world faces this kind of onslaught on its citizens.  It’s unthinkable.  Yet, in Southern Israel, as you all know, it’s the reality.

I often think about how it would feel to know that at any moment sirens can sound and everyone will need to take cover.  And all I can think about is my children.  My wife and I are capable to logically understand what is going on, what we would need to do and so forth.  But what about our children?  Our oldest daughter is just 11.  The younger girls are seven and five.  Would they be able to understand what is happening?  Would the constant stress and panic linger or affect them as they grow up?  No other country in the world experiences this.  No other country has to fortify so many pre-schools, and kindergartens.

I accompanied President Obama when he visited Sderot in 2008 as a presidential candidate, and as he visited families whose homes had been destroyed by Hamas rockets.  And I know he was thinking of his children, he even said so.  That visit led him to seek an additional $205 million above our annual three billion dollar assistance package, shortly after taking office to support accelerated deployment of the Iron Dome system.  These funds will finance four batteries – the third and the fourth battery, which are already deployed, and the fifth and the sixth, which we expect to be deployed in 2013.

Last August, shortly after Julie and I arrived to Israel, one of my first visits was also to Ashdod.  Mayor Lasri took me to see a synagogue and school that had been just days before struck by a rocket.  Since then, a total of four Iron Dome batteries have been deployed around southern Israel.   And over the course of that week in March alone, they have intercepted some 50 rockets—nearly 80 percent of the rockets they targeted, an amazing success rate.

I visited one of the Iron Dome radar sites earlier this month, the day the fourth Iron Dome battery was deployed.  I met with senior IDF officers at the site, as well as some of the talented young IDF soldiers who operate the system, commanded by a young woman named Revital, who were getting ready for their Seder.  We are so proud to see America’s early investment in the Iron Dome helping to save the lives of Israeli citizens.  And this system does not just save lives by preventing missile strikes.  It also gives Israeli leaders time, space, and flexibility in deciding when and how to respond to these attacks.  On March 27th, the Defense Department announced that it would again request additional funds from Congress to support further deployments of the Iron Dome system.

That doesn’t make the rocket and missile fire from Gaza acceptable.  It is not acceptable, and the terrorists who fire them must be stopped.  And the United States will always support Israel’s right to defend itself and its citizens.  But we are proud of our partnership with Israel in bringing this lifesaving technology to the field.

Iron Dome is just one example of America’s ironclad commitment to Israel’s security.  When you face threats like Israel does, there is no greater priority than security.  Because we recognize that, the Obama Administration has undertaken to deepen and strengthen the exchanges and ties between our militaries and intelligence services.  The security coordination, from the highest levels down to working levels, has reached unprecedented heights.   As the U.S. Ambassador, I can tell you that we facilitate a constant stream of delegations in both directions to ensure the closest possible security coordination, with each of us benefitting from the unique capabilities and knowledge that that other brings to the table.  Ramatcal Benny Gantz was in Washington last month, meeting with his counterpart, CJCS General Martin Dempsey, who visited Israel in January.  Minister of Defense Barak will be in Washington this week, and so on.

It is a true partnership in every sense of the word.  Over the decades, America has invested tens of billions of dollars in Israel’s security, always with the goal of ensuring that Israel maintains its qualitative military edge and has the means to defend itself.  With strong bipartisan support, our roughly $3 billion dollars in annual military assistance enables Israel to purchase the most advanced U.S. military technology, including the F-35 Joint Strike Fighter, the world’s most advanced fighter aircraft.

But our security relationship is not simply about what America does for Israel.  This is about what we do together When President Obama says the bonds between the United States and Israel remain unbreakable and the commitment of the United States to the security of Israel is ironclad, he knows that Israel’s commitment and contribution to America make this a two-way street in ways that are good for Israel and good for the United States.

Our militaries train together, to help each learn from the other’s special knowledge and skills.  I can tell you that our forces love to train with their Israeli counterparts, and have learned some of the most effective counter-terrorism and counter-insurgency techniques from them, which has made us more effective in Iraq and Afghanistan.

We collaborate on defense technology development, from which the benefits flow in both directions.  Our work to jointly develop missile defense systems has led to technological breakthroughs that we are both employing to defend ourselves.  The successes of the Arrow and Iron Dome programs, and the David’s Sling program, which is still in development, are critical advances that save lives and enhance Israel’s strategic position.

also want to mention an Israeli technological breakthrough that has had enormous strategic significance for the United States.  I recently visited Kibbutz Sasa in northern Israel, the home of a small company called Plasan.  Plasan met the call to help protect American soldiers serving in Iraq and Afghanistan when they were able to surge the production of up-armor kits for Humvees and for mine-resistant vehicles.  These armor kits were critical in saving the lives of thousands of U.S. soldiers, sailors, marines, and airmen when they faced the threat of IEDs and RPG attacks.  So we help each other, we protect each other, and we work to ensure each other’s security.

Many of the challenges and threats that Israel faces, America faces as well.  As President Obama said in his speech last month to AIPAC, no issue is higher on the agendas of the United States and Israel than Iran’s efforts to achieve nuclear weapons capability.  Through extraordinarily close, high-level coordination, including during the visit of National Security Adviser Tom Donilon earlier this year, and Prime Minister Netanyahu’s visit to Washington in March, the United States and Israel have developed a common understanding of the nature of the threat a nuclear-armed Iran would pose, a common intelligence basis on which to judge the progress of the Iranian nuclear program, a common strategy – together with many other nations – to use unprecedented sanctions and economic pressure to induce Iran to change course, a shared preference to try to resolve this issue diplomatically, but also a shared principle that no options are off the table to achieve our goal.   Additionally, President Obama has been clear that we fully respect Israel’s sovereign right and responsibility to make its own decisions to safeguard its security.

A nuclear-armed Iran is not just an existential threat to Israel.  It also poses a grave threat to the security of the United States, our allies, our forces in the region and the world.  It would also risk a nuclear arms race across the Middle East, the collapse of the global nuclear non-proliferation system, an emboldened Iran sponsoring terror by Hezbollah, Hamas, and other groups—just as it does today—but under a nuclear umbrella, and severe threats to freedom of navigation in the Persian Gulf.  It would be too dangerous to permit this regime, which calls for Israel’s destruction, sponsors terrorism, and seeks to dominate and intimidate its neighbors, to acquire nuclear weapons.

Despite strong pressure from the international community, Iran continues to engage in a variety of destabilizing activities and refuses to address the international community’s serious concerns about Iran’s nuclear program.

These concerns have been underscored by Iran’s refusal to permit IAEA inspectors access to sensitive sites, and by the detailed description of the possible military dimensions of Iran’s nuclear program in the IAEA’s November 2011 report, as well as the troubling findings Director General Amano presented to the IAEA Board of Governors last month.

As a consequence, we have taken steps in coordination with our partners to dramatically increase the pressure on Iran, leading an effort to isolate Iran diplomatically as never before.  We have led the world in imposing the toughest sanctions ever on the Iranian regime, building on U.N Security Council Resolution 1929.  Sanctions have imposed steep costs on the regime.  Iran’s leaders admit publicly that sanctions are hurting their economy, especially targeted sectors like energy, finance, and transportation.  We are urging all governments to further increase the pressure on Iran and to deepen the impact of these measures through the application of sanctions against the Central Bank of Iran (CBI) and concerted efforts to reduce Iran’s oil revenues.

On December 31, President Obama signed new legislation to target the Central Bank of Iran and Iran’s crude oil revenues, and intended to encourage a multilateral initiative to reduce Iran’s oil revenues.  We are also working with oil consuming countries to help them respond to the new legislation and find alternatives to energy supplies from Iran.  Allies like the EU share our goals and are imposing measures of their own, such as an embargo of Iranian oil purchases, which we support.  Last month, the SWIFT financial transaction center in Brussels announced it would no longer process financial transactions from EU-sanctioned Iranian banks, choking off Iran’s last lifelines to the international financial system.

Taken in combination with the many other sanctions that have been imposed and continue to be implemented, we believe that such aggressive pressure could have an impact on Iran’s strategic calculus.  And changing Iran’s calculus is essential to achieving a diplomatic solution.  We will do everything possible to achieve a diplomatic solution, but as President Obama has made clear, the window for a diplomatic solution is shrinking.  The clock is ticking and Iran must change course.  We will not pursue talks for the sake of talks.  We are interested in results and will not allow the talks just to drag out in a stalling process.

Recent behavior shows Iran’s desperation in the face of increasing international pressure.  Iran is isolated and is seeking to divert attention from its behavior and domestic problems.  I think that pressure, in part, explains Iran’s decision to come to the P5+1 talks held this weekend in Istanbul.  But until Iran chooses to address international concerns about its nuclear program, we will further increase the pressure.  We are not taking any options off the table, and we will not let up until we achieve our goal.  Our policy is to prevent Iran from achieving nuclear weapons, not to contain an Iran with nuclear weapons.  Like Israel, the United States is interested in results, and we will continue our close coordination with Israel toward our common goal, following the important and positive meeting between President Obama and Prime Minister Netanyahu in March.

The talks between the P5+1 countries and Iran occurred this weekend in a positive and constructive atmosphere, allowing for us to meet on May 23 in Baghdad to continue discussions.  We will be working on urgent practical steps that Iran can take to address the international community’s concerns about the nature of the Iranian nuclear program.  But as Secretary of State Clinton said, “the burden falls on Iran to demonstrate their seriousness.”  In the meantime, the toughest sanctions on Iran are yet to come.

There are other challenges in this region, of course, on which the United States and Israel coordinate closely.  From Tunis and Tripoli to Sanaa and Cairo, straight on through to Damascus, people have taken to the streets to insist that their governments respect them and reflect their political and economic aspirations.  Many in Israel are watching this process with concern, unsure of the implications for Israel’s security of the instability that has accompanied these upheavals.

For the United States and Israel, the transitions in the Arab world pose both opportunities and challenges.  The people of the Arab world will now determine their own destiny.  We must all strive to encourage a more positive regional atmosphere.  We must, and are, aiming to strengthen the forces in Arab societies that believe in and promote democratic values; to make clear what those values are; to make clear that every such new regime must respect the universal rights of their people, must govern transparently, must honor the rights of minorities and women, must reject violence, must honor international commitments and agreements, and in the case of Egypt, must honor the peace treaty with Israel.  We will not compromise our decade’s long commitment to Middle East peace, and will continue to pursue prospects for peace just as we work toward an Arab world that is freer and more democratic.

Parties cannot go to the polls with a gun in one hand and a ballot in the other.  They have to choose.  And we have to be practical and smart.  We are less concerned what a political party or organization calls itself than what it does in practice, and we will reach out to those who act according to democratic principles, respect their fellow citizens’ rights, and do not use force or violence to impose their views.

At a time of great uncertainty and change, we have deepened our coordination with Israel.  We both recognize that there is significant risk and opportunity in the changes in the Arab world.  The opportunity presented by the emergence, over time, of peaceful, stable, democratic regimes is undeniable, and we must work for it, supporting those in the Arab world who share these goals.  But these outcomes are far from guaranteed, and they are beyond the ability of the United States or Israel to control.  So at the same time, we are working together to prevent, mitigate, and be prepared to deal with the real risks in this period – from terrorists using Sinai as a base of operations, to instability in Syria.  And throughout this period, we will remain as committed as ever to helping Israel deal with any threat to its security.  We demonstrated this commitment on a night last September when President Obama and out entire government worked overtime to help ensure the safety of six Israelis trapped inside the Israeli Embassy in Cairo.

The changes that are underway in the region will not take weeks or months to play out, but rather years.  And we will have to continue to work hard to help these new governments realize their potential, support their people, and stabilize their countries.  But, we’ll do that while maintaining our total and uncompromising commitment to Israel’s security.

I’d like to turn now to the continued goal of the United States to ensure that Israel remains a secure, Jewish and democratic state.  This is a goal that runs as a common thread through our entire government, is a litmus test of our policy, and inseparable from our determination to see the State of Israel living in peace and security alongside a sovereign state of Palestine.  Two states for two peoples.  Israel as a Jewish state and homeland of the Jewish people.  An independent Palestine as the homeland of the Palestinian people.  Each side enjoying self-determination, mutual reconition, security and peace.  This is a goal that we share with Prime Minister Netanyahu and his government.

Now, we need to be clear:  a peace agreement between Israel and the Palestinians would not be a remedy to all of Israel’s security challenges.  It is not a silver bullet that will lead to a resolution of regional disputes.

However, an agreement along the lines outlined by President Obama, one that is a realistic agreement, reached through direct negotiations, that ensures Israel’s security and leads to two states for two peoples, would fundamentally improve Israel’s strategic picture.  It would secure Israel’s future as a Jewish and democratic state.  It can also open the door to engaging with Arab publics, who will now have a greater say in their own governance and foreign policy.

We are looking for ways to overcome hurdles, push through the political stalemate, and close substantive gaps in negotiations.  This is not easy to do.  If it were, we would have done it already.  As we have said many times, this conflict can only be resolved through direct negotiations.  It cannot be resolved by unilateral measures by either side.  It cannot be resolved through appeals to the UN, which we will continue to oppose.  We have been crystal clear that the core issues of the conflict can only be resolved through direct negotiations.

In recent weeks, the parties have been meeting with one another, initially with the help and heavy lifting of the Jordanian government and under the auspices of the Quartet.  These talks have led to direct contact between the parties, including a promised exchange of letters.  We hope this exchange can lead to additional dialogue on substantive on issues of concern for both sides, while at the same time supporting immediate and operational issues like continued security cooperation and strengthening the viability of the Palestinian Authority.  This dialogue, if it is serious and realistic, can help the parties gain what has most been lacking throughout our efforts – the mutual confidence that they each have a partner with whom they can achieve their goals.

At the same time, we must also seek to sustain the impressive progress that has been made on the ground in the West Bank, including economic gains, institution-building and reform led by Prime Minister Salam Fayyed, and the dramatically improved security environment for both Israelis and Palestinians, which the Palestinian Security Forces and the IDF have cooperated to produce, and of which they are justifiably proud.  To support these gains, the United States must continue to provide assistance to the Palestinian Authority.  U.S. assistance to Palestinians and timely Israeli revenue transfers are irreplaceable elements in Israeli efforts to counter terrorism and ensure peace and stability.  This is not just my opinion – it is what we hear from Israeli leaders and security professionals every day.

Finally, I want to highlight what is, in my view, one of the most overlooked elements of the U.S.-Israel relationship: the economic sphere.  Our economic relationship is growing rapidly, but huge potential growth still remains.

Israel’s future doesn’t just depend on security.  It also depends on creating economic opportunities for a new generation of Israelis who are globally connected and ambitious for a better future.  Israel’s ability to retain them and to maintain the social cohesion and economic vitality that will enable them to succeed is vital to its survival and strength—and therefore to U.S. interests.  We want to help Israel, the country that made the desert bloom in the 20th century, compete economically in the 21st.  American-Israeli economic partnerships can help achieve that goal.

There are about one dozen American-Israel Chambers of Commerce throughout the United States, based in New York, Chicago, Dallas, Miami, Los Angeles, and elsewhere.  In 2011 alone, the U.S. imported $23 billion of Israeli goods and services; that’s ten percent of Israel’s GDP.   American companies and their representatives here directly employ about 60,000 Israelis; that’s fully two percent of Israel’s entire workforce.  This figure does not include the many thousands more that are supported by American companies here as subcontractors or in downstream businesses.

American companies have opened two-thirds of all foreign R&D facilities in Israel and brought in nearly 60 percent of all foreign direct investment.  American-sourced venture capital provides more than half of all money for nascent technology companies to get off the ground.  Last year, American companies acquired at least ten Israeli startups to the tune of $1.5 billion dollars, not just for their products, but for their technology and to establish leading international R&D centers.  These companies tap into the greatest asset of Israel’s people—their brainpower.

Virtually every major U.S. technology company has chosen to base major research and development centers in Israel to draw on the talent and innovation of the Israeli work force and start-up culture.  That makes American companies more competitive globally and supports our economic growth.

There are also tremendous opportunities for increased US-Israeli cooperation in the field of energy.  Israeli advances in renewable energy technologies such as electric cars, and Israel’s discovery of significant off-shore energy resources—which U.S. companies are helping to develop and where we bring great expertise—only scratch the surface of the possible expansion of our economic relationship.   One of my goals as Ambassador is to create as many opportunities as possible for exchange – in the fields of security, business, culture, education, and others – between Israelis and Americans of all walks of life.

To conclude, the political climate in the Middle East is more challenging now than it has been in quite some time.  We have a lot of work to do.  But in a time of change, one thing that will not change is the strength of the U.S.-Israel relationship.  Thank you for taking the time to be here today, I’m happy to take your questions.  Also, please check out my Facebook page – Ambassador Dan Shapiro, and my twitter feed: @AmbShapiro.