Israel

July 2007 | Risk Summary

Overall we do not see the US arms deal with anti-Israel states like Saudi Arabia as any real threat to the state's security, particularly since Washington is softening the blow with a 25% increase in military aid, from US$2.4bn to US$3.0bn. Indeed, the better the relationship Saudi Arabia has with the US, the more likely it is to soften its stance towards Israel: we expect continued incremental rapprochement between the two countries over the next few years. Meanwhile the additional aid from the US sends a message of strength to hostile states throughout the region. Most notably Syria will

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