Israel

The proposed peace talks with the Palestinian Authority have been further complicated by an untimely arms deal between Russia and Syria. The Israeli government is concerned that Lebanon's militant group Hizbullah may later be able to gain arms indirectly through this deal, thus further increasing the group's ability to launch a strike on Israel. While internal political risks are relatively low, the ongoing dilemma of relations with the Palestinians and increasingly tense relations with neighbouring Syria and Lebanon have weighed down our political risk rating for Israel.

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