Stopping the Nuclear Deal Won’t Halt the Funding of Regional Terror

One of the reasons Israel says sanctions should be maintained against Iran is that, otherwise, it will provide a financial bonanza to the likes of Hezbollah and Hamas. But most of their funding already comes from other countries with ties to Israel.

Amos Harel
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A Palestinian youth carries an RPG launcher during a graduation ceremony as part of a summer camp organised by Hamas' military wing, July 25, 2015.Credit: AFP
Amos Harel

Prime Minister Benjamin Netanyahu started revving up his engines this week, ahead of the diplomatic offensive he’s planning in Washington, D.C. in a last-ditch attempt to halt the nuclear accord signed between the world powers and Iran. This battle will peak next month, at the start of debates at the UN General Assembly, on September 15, and until the U.S. Congress votes on whether to ratify the deal and lift American sanctions on Iran. This vote is expected to take place by the end of September.

In the meantime, Netanyahu and U.S. President Barack Obama continue to exchange blows. The target audience at this point – one step before the dispute lands on the doorstep of senators and congressmen – is the various (partly competing) organizations that represent American Jews. This is based on the assumption that their involvement will affect the vote in Congress. Netanyahu warns that the deal will lead to war, since Iran will eventually violate its terms and resume developing a nuclear weapon. Obama claims the opposite: that scrapping the deal under Israeli pressure will lead to a war in which missile barrages will be launched at Tel Aviv.

Alongside substantial arguments about the gaps in the proposed methods of monitoring Iran’s nuclear sites, and concern that the powers won’t deal with possible violations with sufficient speed, Israel raises some major concerns regarding the regional implications of the deal. It’s not just the upgrading of Iran’s strategic standing, with the United States and the world powers willing to close a deal while recognizing Tehran’s ambitions to play a dominant regional role.

The deal also includes specific economic benefits to Iran, which Israel believes will ultimately be converted into extensive and vigorous financial assistance to a host of terrorist and guerilla groups. These will continue to erode what little regional stability remains, in accordance with the interests of their patrons in Tehran. These groups include various militias, some Shi’ite, that support the Assad regime in Syria; Hezbollah in Lebanon; Hamas’ military wing and Islamic Jihad in the Gaza Strip; and the Houthi rebels in Yemen.

The U.S. administration and the other powers claim in response that the fact the agreement deals only with restraining Iran’s nuclear program (and not stopping its missile development program, or making Iran desist from aiding terror activity and the undermining of regimes across the Middle East) has been known to Israel for a long time. Furthermore, they say, it was Netanyahu who for years preached to the powers that they must focus on nuclear matters. Israel’s current complaints are perceived as “moving the goalposts” (as the English say): namely, changing the rules of the game after negotiations have reached an advanced stage.

According to a recently published article by Dennis Ross, a former senior official in the Obama administration and currently a fellow at the Washington Institute for Near East Policy, the Iranian economy will benefit from an injection of nearly $150 billion once the UN Security Council lifts the sanctions imposed by the UN, European Union and United States. Israel’s Military Intelligence estimates that, in a second phase, deals worth hundreds of billions of dollars will be signed between Iranian and foreign firms. Businessmen from China, Russia, Germany, Italy and other countries have already begun advanced negotiations ahead of finalizing gigantic deals, including the export of Western-made cars to Iran, and resumed development of oil and gas fields (which had been frozen due to the nuclear program crisis).

Obviously, most of the money will be used to extract the Iranian economy from the deep hole it’s been in over recent years due to the ayatollahs’ insistence on continuing with the nuclear program despite international criticism. Judging by Tehran’s conduct over the 36 years that have elapsed since the Islamic revolution, the continued development of its missile program and weapons industry will remain a top priority, along with a strengthening of various terror organizations and increasing assistance to the Assad regime. Israeli estimates say that Iranian funds for these purposes could grow by hundreds of millions of dollars a year, if not more. Since Iran is the player that principally financed the growth of Hezbollah and its acquisition of an arsenal estimated to include more than 100,000 rockets and missiles since 2006’s Second Lebanon War, and given that Tehran (along with Russian military aid) is keeping President Bashar Assad’s head above water in Syria’s civil war, it’s hard to ignore these figures.

Complicated relations

Iranian aid to Hamas has fluctuated over the past decade. Tehran continues to send money and weapons to Islamic Jihad in Gaza, which is perceived as an Iranian delegate there, but relations with Hamas are more complicated. Ever since the war in Syria broke out in 2011, Hamas’ political wing has distanced itself from the Shi’ite-Alawite axis, stressing solidarity with the Sunni camp that’s laboring to topple Assad. The head of Hamas’ political bureau, Khaled Meshal, left his offices in Damascus and moved to Qatar. Recently, he’s been trying to improve relations with Saudi Arabia and even Egypt – whose government of generals has exhibited strong hostility toward Hamas – at the expense of ties with Iran.

Tehran itself carefully distinguishes between the political and military leaderships of the Palestinian organization: Military commander Mohammed Deif and his staff receive large sums (the Shin Bet security service estimates this at tens of millions of dollars a year) through bank transfers, but Iran isn’t transferring any funds to Hamas’ political wing at present.

Hezbollah fighters during a rally.Credit: AP

Since the money doesn’t pass through Israel’s banking system, the ability to disrupt these transfers is very limited. A joint Israeli-Egyptian effort is much more effective in combating the smuggling of weapons from Iran to the Gaza Strip. Most of the smuggling tunnels from Sinai into the Gazan side of Rafah have been destroyed, and in recent years all attempts to smuggle weapons by sea have failed. The blockade of smuggling routes has forced Hamas’ experts to rely on self-production of medium-range rockets, whose improvised nature limits their accuracy and deadliness.

Nevertheless, Hamas is still expecting to receive Iranian aid that won’t be restricted only to finances. The militant group is interested in any weapon that can reduce the gap in capabilities between itself and the Israel Defense Forces – this could include anti-aircraft missiles; armor-piercing, anti-tank missiles; naval commando equipment, as well as land-to-sea missiles (in March 2011, Israeli naval commandos seized the Victoria, a vessel carrying C-704 anti-ship missiles that was en route from Iran to Islamic Jihad in Gaza).

Iran also sends money to Hamas’ military wing in the West Bank. In recent months, senior Iranian officials have talked openly about the need to help finance a second Hamas front against Israel, in the West Bank. The expectation of an imminent financial bonanza following the lifting of sanctions is shared by all the groups backed by Tehran. Hezbollah leader Hassan Nasrallah directly addressed this issue in a speech last month, after the signing of the nuclear accord.

However, according to Israeli intelligence, Iran is not the prime sponsor of Palestinian terror. That title goes to Qatar, which has maintained good relations with Israel over the past year, with the emir regularly sending his emissary here as part of efforts to rehabilitate the Gaza Strip.

The emirate also hosts the Qatar Foundation, which Israel says is an unlawful organization that transfers financial aid to Hamas-linked associations in Gaza and the West Bank; some of this is used for military activity, it adds. It’s estimated that tens of millions of dollars were sent by the foundation over the past five years.

More substantial financing comes from Turkey. The Turks have, for several years, hosted dozens of Hamas activists in Istanbul, headed by Saleh al-Arouri, commander of Hamas’ West Bank operations. He’s been activating terror cells in areas controlled by the Palestinian Authority. Istanbul also serves as the military wing’s recruiting station for Palestinian students, where they receive training in conducting terrorist activity. Two of these students, who were later arrested by the Shin Bet in the West Bank, explained how they were driven by their commanders to a forest only 30 minutes outside of Istanbul, and received training in firing small arms. When Israel learned of this, Turkish intelligence agencies lowered the public profiles of Arouri and his deputy, Zaher Jabarin. The headquarters continues to function, though, finding ways of raising additional funds.

Several Turkish organizations outlawed in Israel also transfer money to Hamas – most notably IHH, which was behind the Mavi Marmara flotilla that tried to break the naval blockade of Gaza in 2010. According to Israeli intelligence sources, Hamas’ military wing receives a significant portion of its financial assistance from Turkey. The distribution of these funds involves internal struggles, but Deif and his people have stood firm. They believe that without military growth ahead of an inevitable next round against Israel, Hamas won’t be able to maintain its rule in Gaza.

Hamas in Europe

Money flows to Hamas from yet another source: Islamic charity groups that operate in different European countries. The organization has expanded its activity in Europe in recent years, changing its pattern of fund-raising from voluntary collections in a few mosques to a regulated system of organizations whose work is coordinated. The effort is supervised by Hamas’ political wing, but sources in Israel estimate that much of the money raised goes to the military side. The collection is organized by Palestinians who have migrated to Europe, some following academic studies and others after spells in Israeli prisons. Israeli intelligence calls this system the “European branch of Hamas.”

Among Hamas’ most prominent activists in Europe are Muhammad Kazem Sawalha, from the village of Asira al-Shamaliya near Nablus – Israel says he left the country using false papers and now holds British citizenship; Majid Zeir, from Hebron, also currently a British citizen; Essam Yusuf, a Jordanian Palestinian now residing in Britain; and Amin Abu Rashad, a former Hamas military activist who left Lebanon and now lives in Holland. Abu Rashad also heads a fund called al-Isra. Yusuf heads a fund called Interpal, a London-based nonprofit that has been outlawed in the United States and Israel. These activists and organizers are involved in propaganda work, recruiting new members into Hamas and raising money. Some of them present these organizations as humanitarian groups and maintain regular contact with members of the European parliament.

“This money does not go directly to those in need,” says a senior official in the Israeli defense establishment. “It reaches Hamas institutions in Gaza and the West Bank, and some of it is used to fund terrorist activity carried out by the military wing.”

Israeli intelligence agencies pass information about these groups to the European countries that host them, but what happens next depends on the nature of relations between these countries and Israel and the Palestinians. The work of Israeli agencies in trying to disrupt the transfer of funds is more coordinated than in the past and relies on extensive documentation, but success is limited. It’s occasionally possible to apprehend couriers crossing into Israel from Jordan. It’s more difficult, and nigh-on impossible, to lay hands on money that is wired by computer or mobile phone in a bank transfer conducted through branches that have no ties with Israel, or Western countries that have no interest in confiscating money that supports terror.

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