Britain’s post-war government handed the problem of Palestine to the newly created United Nations.
The UN heard sharply divergent proposals. Zionists insisted on a Jewish state, with full control over immigration, a sanctuary for
refugees and Holocaust survivors. Palestinians argued for an independent Palestine, with full civil rights to the Jewish minority.
But, says Stephen Shalom, "They were not willing to give this minority the right to control immigration and bring in more of
their co-religionists until they were a majority to take over the whole of Palestine."
Jews in 1947 accounted for just one-third of Palestine’s population and owned only 6 percent of the
The UN General Assembly in November 1947 voted to divide Palestine into two independent states, one
Arab, the other Jewish, joined by an economic union. Jerusalem would be internationalized.
The UN action took place in the context of the collapse of the wartime alliance between the U.S. and
Soviet Union and the growing Cold War between the two superpowers. Writes Shalom, "Moscow favored partition as a way to reduce
British influence in the region; Israel was viewed as potentially less pro-Western than the dominant feudal monarchies." The U.S.
also backed the creation of Israel, but for different reasons.
Palestinians rejected partition. Some took up arms and battled Zionist military forces. Britain
withdrew in May 1948. Israel declared its independence on May 14, three and a half months before the date specified in the UN
resolution. President Truman immediately recognized the new nation. Arab armies entered the next day.
Israeli leaders had worked out a deal with King Abdullah of Jordan that his armies would invade only
the area assigned to the Arab state, not the Jewish territory. "Since Jordan was closely allied to Britain, this scheme also
provided a way for London to maintain its position in the region," observes Shalom. "The other Arab states invaded as much
to thwart Abdullah’s designs as to defeat Israel. The fighting was largely confined to Palestinian areas or Jerusalem.
"When the armistice agreements were signed in 1949, the Palestinian state had disappeared, its
territory taken over by Israel and Jordan, with Egypt in control of the Gaza strip," points out Shalom. "Israel now held 78
percent of Palestine. Some 700,000 Palestinians had become refugees."
To put it another way, only 133,000 remained of the 860,000 Arabs who had lived in areas of Palestine
that became Israel. The forcible expulsion of Palestinians has been compared to the ethnic cleansing in the former Yugoslavia in the
1990s. "Arab villages were bulldozed, citrus groves, lands, and properties seized, and their owners and inhabitants prohibited
from returning," says Shalom. The UN General Assembly in December 1948 passed Resolution 194 which called for the right of return
or compensation. Israel refused to accept its terms.
The U.S. now faced the dilemma that had bedeviled the British, as it increasingly assumed Britain’s
role in the region. The crux of the problem was described in 1948 by a British labor newspaper: "There are two oil pipe lines
from Iraq to the Mediterranean; one through Syria to the Coast, and the other through Transjordan to Haifa. Thus it is necessary to
placate or force the ruling groups in each of these territories to favour the production and transport of oil on behalf of Western
On the one hand, Israel physically divided the Arab world and provided a base that would help
safeguard Western interests. On the other, the U.S. needed to build firm alliances with conservative, anti-democratic Arab kingdoms
opposed to Israel. Reactionary rulers attempted to channel popular discontent over lack of democratic rights into opposition to
Israel. As the U.S. moved closer to both Israel and Saudi Arabia, U.S. policy placed Washington at odds with Arab workers and peasants
who accepted neither Israel nor feudal rulers.
What mattered to powerful interests in the U.S. was oil, not justice. Washington delegated foreign
policy, in part, to the Arab-American Oil Co. (Aramco). Aramco could be as pro-Arab as business required, with the government’s
approval, while Washington was publicly pro-Israel. "Certain advantages flowed from this separation of identity, particularly
during the early days of the development of Israel," according to a State Dept. document.
The commander of the U.S. Mediterranean Fleet told a British newspaper in late 1947, "American
forces will be allocated wherever there are American interests, in closest cooperation with the British." U.S. assumption of
Britain’s role in the Middle East meant facing the challenge posed by nations with plans for their oil that did not always coincide
with decisions made in American corporate boardrooms. In the case of Iran, the U.S. responded in a way contrary to American ideals.
Iran had been ruled since 1925 by a military dictator who crowned himself Shah with the blessing of
the British government. A joint British-Soviet invasion ousted the Shah in 1941 when he appeared sympathetic to the Nazis and
installed his 22-year-old son instead.
In January 1952, democratic elections produced a majority for a grassroots political party, the
National Front. The Shah had little choice but to appoint Dr. Mohammad Mossadeq, a National Front leader, as prime minister.
A reformer with years of public service, Mossadeq was European-educated and pro-American. (He led a
post-war fight to deny the Soviet Union oil concessions in northern Iran.) Mossadeq considered foreign control of his country’s oil
riches as a barrier democracy and independence. His government nationalized the Anglo-Iranian Oil Co., to the joy of the Iranian
people and horror of corporate executives and policy-makers in Britain and the U.S.
Britain took its grievance to the UN, but got no satisfaction. So Britain imposed an embargo on
Iranian oil and other economic sanctions. After two years of economic hardship, Mossadeq considered selling oil to the Soviet Union.
This, and his government’s cooperation with the left-wing Tudeh ("Masses") Party, gave the new Eisenhower Administration
an excuse for action. The Central Intelligence Agency received authorization to jointly organize a coup with British secret service to
destroy the democracy movement and restore the power of the Shah.
CIA operatives disguised as Mossadeq supporters harassed and threatened religious leaders. General
Norman Schwarzkopf (father of the Gulf War general) smuggled more than $1 million into Iran. The CIA staged riots and bribed top
military and police officials. In August 1953 the Shah returned to power, backed by the military, the U.S. and Britain. The following
month the U.S. granted the Iranian government $45 million.
The brief period of democracy and independence ended. Formerly a kind of British colony, Iran was now
firmly in the U.S. sphere of influence.
In 1954, a consortium of oil companies, including British Petroleum, Exxon, Mobil, Texaco, Chevron,
Gulf, Royal Dutch/Shell and CFO, negotiated an agreement with the Iranian government for oil production. Amoco signed an agreement
with the Shah in 1958.
In Egypt, the military government of Abdul Nasser in 1956 nationalized the Suez Canal, owned by
French and British investors owned the canal. Nationalization of the canal, and Nasser’s encouragement of Arab unity, triggered a
joint Anglo-French-Israeli invasion. (Nasser had come to power in 1952 in a coup approved by the CIA.) According to British historian
Hugh Thomas, "Ever since Churchill converted the navy to the use of oil in 1911, British politicians have seemed to have a
feeling about oil supplies comparable to the fear of castration."
In Iraq, a nationalist military uprising in 1958 removed a pro-British dictator. The U.S. government
feared the consequences for the hugely profitable oil concessions in Iraq and Kuwait.
Also that year, civil disorder erupted in Lebanon when the government was accused of rigging the
election. Facing opposition from Arab nationalists opposed to Western interests, the Lebanese government asked for U.S. assistance.
This provided the Eisenhower Administration an opportunity to send a message to Iraq. The U.S. government declared a nuclear alert and
sent 14,000 marines to Lebanon in 1958. U.S. forces left once the Iraqi government agreed to "respect its obligations."
Meanwhile, British troops moved into Jordan to support the monarchy, which also faced a pro-Nasser nationalist movement.
To defeat an uprising against the Sultans of Oman in the 1960s, Britain sent special forces and
officers to command Omani units. In the early 1960s, British troops battled insurgents seeking to end British rule in Aden, in the
western corner of the Arabian peninsula, and rebels seeking to topple a British-friendly ruler across the border in Yemen.
Kuwait declared its independence from Britain in 1961; Iraq’s General Quasim threatened to annex
Kuwait, which Iraq still considered part of the province of Basra. Britain pledged to defend Kuwait.
The new Iraqi republic instituted agrarian reform, breaking up the huge landholdings of feudal
owners, and industrialization. Another military uprising in 1963 brought a new regime, pledged to neutrality and cooperation with
neighbors Syria, Turkey and Iran, and Egypt. This government declared war on Israel and subsequently severed all ties with the United
States during the 1967 Arab-Israeli War.
Anticipating an attack by Arab armies, Israel launched a war on its neighbors in June 1967. Its
military prevailed — and Israel seized the West Bank and East Jerusalem from Jordan, the Gaza Strip and Sinai Peninsula from Egypt
and the Golan Heights from Syria. Large numbers of Palestinians — in cities, towns and villages, as well as refugee camps —
suddenly found themselves in Israeli-controlled territory.
Israel announced that Jerusalem, not Tel Aviv, would henceforth be its capital, and began to
establish settlements in the newly seized West Bank and Gaza. The Geneva Conventions prohibit a conquering power from settling its
population on occupied territory. The UN Security Council, in November 1967, unanimously called for the "withdrawal of Israeli
armed forces from territory occupied in the recent conflict. Resolution 242 also called for all countries in the region to end their
state of war and to respect the right of each country "to live in peace within secure and recognized boundaries."
After the war, the U.S. became Israel’s chief weapons supplier (replacing France) as well as Israel’s
principal diplomatic backer. The U.S. declined to push for Israeli implementation of Resolution 242. "U.S. officials determined
that Israel would be an extremely valuable ally in the Middle East, writes Stephen Shalom.
Given the importance of Middle Eastern oil, U.S. support for Israel would be self-defeating if the
conflict were simply Israel versus the Arabs. But instead, the U.S. has brokered an uneasy alliance of Israel and conservative Arab
states against radical Arab nationalism — at the expense of the millions of Arabs living in poverty despite the region’s oil
In 1970, the net assets of the petroleum industry in the Middle East totaled $1.5 billion, with a
return on investment of 79 percent.
U.S. government strategy came under severe strain in the early 1970s. The Middle Eastern nations
within the Organization of Petroleum Exporting Countries (OPEC) in 1973 demanded a better share of oil profits from Western oil
corporations and Western restraint of Israel. These demands were followed by higher prices and a boycott. As John Rose writes,
"the oil-boycott was successful only because it temporarily united the most radical of the oil-producing countries with the most
reactionary — including the two most decisive and pro-American, Saudi Arabia and Iran."
Later that year, Israel decisively repulsed a joint Egyptian-Syrian attack. "The United States
saved Israel from collapse at the end of the first week by our arms supply," stated Henry Kissinger, then U.S. Secretary of
State. "Some have claimed it was American strategy to produce a stalemate in the 1973 war. This is absolutely wrong. What we
wanted was the most massive Arab defeat possible."
Specifically, what the U.S. government wanted, in Kissinger’s words, was "to break up the Arab
united front," in order to return to the previous alliances and maintain U.S. corporate control of Middle Eastern oil. After the
war, the U.S. readily agreed to sell Saudi Arabia and Iran military hardware worth billions of dollars. Kissinger’s strategy led
eventually to the 1979 Camp David Accords, with an Israeli withdrawal from the Sinai peninsula in exchange for Egyptian recognition of
Israel. Egypt had been detached from "the Arab united front."
The big oil companies, meanwhile, had done quite well. Exxon’s profits for 1973 set an all-time
record for any corporation.
ISRAEL BANKROLLS HAMAS
In the late 1970s, the Israeli government began providing direct and indirect funding to the Islamic
Association, the parent organization of the Palestinian terrorist group, Hamas.
According to Tony Cordesman, Middle East analyst for the Center for Strategic Studies, "the
Israelis wanted to use [Hamas] as a counterbalance to the PLO (Palestinian Liberation Organization)." A former senior CIA
official told journalist Richard Sale that Israeli support for Hamas "was a direct attempt to divide and dilute support for a
strong, secular PLO by using a competing religious alternative."
An Israeli general reportedly told U.S. officials that he helped bankroll "Islamic movements as
a counterweight to the PLO and communists."
The real goal, some observers believe, was to undermine prospects for negotiations that might give
concessions to the Palestinians. The financial support of the Islamic Association/Hamas took place under the government formed in 1977
by the Likud Party, organized by Menachem Begin and other veterans of 1940s Jewish terrorist organizations.
In Iraq, the government established by a 1968 coup nationalized the country’s petroleum industry
and directed its wealth toward economic development. That coup consolidated the government in the hands of top Ba’ath Party leaders,
among them Saddam Hussein. Hussein directed purges and assassinations aimed at eliminating opposition within and outside of the ruling
party. In 1979 Ahmad al Bakr resigned as Iraq’s ruler, replaced by Hussein, who became president, commander of the military and
secretary-general of the party.
In the 1970s the U.S. provided the Shah of Iran with billions of dollars in arms and advisers to
train his army and secret police. But the Shah’s autocratic methods, repression, perceived corruption, and tolerance of Western
domination united much of the population against him. Installed in 1953 by the U.S. and Britain, the Shah was toppled by strikes and
popular protests in early 1979. A referendum led to establishment of an Islamic republic led by the Ayatollah Khomeini, just returned
from exile, and other radical clerics. The West had lost one of the pillars of its Middle Eastern policy.