IRANGATE AFFAIR.Israel, along with the United States, suffered a
grave loss with the fall of the Shah of Iran at the end of 1979. The Is-
raeli leaders assumed that consistent geopolitical interests would
eventually triumph over religious ideology and produce an accom-
modation between Israel and Iran. The onset of the Iran-Iraq War in
1980 gave Israeli leaders a special incentive to keep their door open
to the Islamic rulers in Iran. The director-general of Israel’s Foreign
Ministry, David (Dave) Kimche, recommended selling arms to rela-
tively moderate Iranians in positions of power, such as Ali Akbar
Hashemi Rafsanjani. The Israeli defense minister, Ariel Sharon, sup-
ported the idea. He believed that Israel’s vital interest was a continu-
ation of the war in the Persian Gulf, with an eventual Iranian victory.
The head of the Jaffee Center for Strategic Studiesat that time,
Aharon Yariv, a retired major general and former director of Mili-
tary Intelligence(DMI), stated at a scholarly conference at Tel Aviv
University in late 1986 that it would be to Israel’s advantage if the
Iran-Iraq War ended in a stalemate, but it would be even better if it
continued; when that war ended, Iraq might open an “eastern front”
against Israel. Uri Lubrani, Israel’s chief representative in Iran un-
der the shah, also justified the continued sale of Israeli arms to Iran
since it might lead to the disappearance of Khomeinism. Strengthen-
ing the relatively moderate Iranian faction was thought potentially to
be capable of toppling Khomeinism. Israeli leaders in talks with their
American counterparts occasionally raised the notion of restoring the
shah’s regime; such an event might afford Israel and the United
States influence in Iran once more.
Israel had its own considerations for deciding to continue selling
arms to Iran: it was simply good for business. One out of 10 Israeli
workers was then employed in arms-related industries; military items
constituted more than a quarter of Israel’s industrial exports. Israeli
pro-Iranian policy was guided by the profit motive rather than strate-
gic considerations. It resulted from the situation of severe unemploy-
ment that hit the Israeli arms industry in 1979 after the Iran market
shriveled.
The first renewed Israeli arms sales to Iran in 1980 included spare
parts for U.S.-made F-4 Phantom jets; a later deal that year included
parts for U.S.-made tanks. Israel informed Washington only after the
fact, when deliveries were well under way. Israeli policy makersIRANGATE AFFAIR• 12506-102 (03) H-P.qxd 3/24/06 7:24 AM Page 125