Israel, Lebanon and the United States announced this week that a deal has been reached between Israel and Lebanon on each country’s maritime border. Negotiations between the parties over the 330-square-miles of the Mediterranean Sea have proceeded with stops and starts since 2020, but over the past few months edged toward a mutually acceptable outcome. Under the agreement, the contested waters will be divided by a line straddling the “Qana” natural gas field. Both parties would be able to produce gas on their side of the line, in addition to royalty arrangements agreed upon. A buoy line will remain between the two countries.

A drilling ship at sea off the coast of Haifa, Israel, Dec. 21, 2016. An historic agreement between Israel and Lebanon could rapidly expand Israeli energy production and provide longer-term economic benefits to Lebanon. (Bryan Denton/The New York Times)
A drilling ship at sea off the coast of Haifa, Israel, Dec. 21, 2016. An historic agreement between Israel and Lebanon could rapidly expand Israeli energy production and provide longer-term economic benefits to Lebanon. (Bryan Denton/The New York Times)

USIP’s Robert Barron, Mona Yacoubian and Hesham Youssef unpack the agreement, its significance for Lebanon and Israel and the implications for peace and stability in the region.

What is the importance of this deal for Israel?

Barron: For Israel, the agreement is valuable for a number of economic and political reasons. In his announcement, Prime Minister Yair Lapid extolled the deal as “an historic achievement that will strengthen Israel’s security, inject billions into Israel’s economy, and ensure the stability of our northern border.” Economically, the agreement offers Israel approximately 17 percent of revenues from Lebanon’s Qana-Sidon gas field. The agreement also eliminates some uncertainty around Israel’s offshore holdings, and could rapidly expand Israeli energy production, allowing for increased exports to Europe, which has been hard-hit by the decreased flow resulting from Russia’s invasion of Ukraine. The October 14 meeting of the Eastern Mediterranean Gas Forum in Cyprus should be instructive on the thinking of the parties and potential timeline of next steps.

For Israel’s security, the deal delineates the two countries’ maritime borders, which have been a point of friction for years (though it does not touch the 50-mile Israel-Lebanon land border, which remains highly contested). Importantly, the maritime agreement also seems to have gained the assent (however grudging) of Hezbollah’s leadership, who for weeks have signaled acceptance of the Lebanese government’s leadership on the negotiations. For many Israelis, an additional benefit of the agreement is increased access to energy for the people of Lebanon, where most citizens currently have only two hours of electricity per day — improving quality of life and stability, however minor, in a country facing a cascade of crises. Few see Lebanon’s further collapse as beneficial to Israel’s, or the region’s, security. Additionally, many hope that Hezbollah will now think twice about escalating its conflict with Israel, if a flare-up would result in a disruption of Lebanon’s newfound energy supply.

The agreement will be subject to a frenetic political picture in Israel, which is in the final weeks of a Knesset election campaign. On October 12, Lapid sought and received approval from his cabinet — though Interior Minister Ayelet Shaked objected, and Communications Minister Yoaz Hendel abstained. Over the next two weeks, the agreement will be reviewed by Israel’s attorney general, hotly debated (though probably not voted on) in the Knesset and returned to the cabinet for final approval. The agreement can be expected to be instrumentalized by opponents of the Lapid government — former Prime Minister Benjamin Netanyahu and his allies have begun strategizing around the issue. The critiques of the deal will likely fall along four lines: 1) that this constitutes a ceding of territory by Israel, requiring a two-thirds Knesset vote; 2) that revenues from Lebanon’s gas sales will bolster Hezbollah (which the United States has assured will not be the case); 3) that Israel could have received a better deal; or 4) that the Lapid interim government lacks legitimacy to make the agreement.

What is the significance of this deal for Lebanon?

Yacoubian: The deal will help to de-escalate tensions between Lebanon and Israel, reducing the prospects for conflict between the two countries in the near term.  While the agreement is limited in nature and does not represent a peace deal between the two warring countries, it nonetheless stands as an important step forward by embodying Lebanon’s implicit or “soft” recognition of Israel. It is notable that on the Lebanese side, the deal emerged as a rare point of consensus among Lebanon’s fractious political factions.

The maritime agreement also paves the way for Lebanon — suffering from an unprecedented economic crisis — to benefit from both enhanced energy resources and investment opportunities, although it cannot be expected to reap these benefits for some time. Given Lebanon’s pervasive corruption, safeguards that ensure the deal does not merely entrench further the country’s deep-rooted cronyism and patronage will be important.

What does this agreement say about the United States’ role, and the state of normalization and regional diplomacy?

Youssef: President Biden was right in calling the maritime agreement between Lebanon and Israel “historic.” It is historic. These two countries continue to consider each other as enemies, and they did not engage directly in this process. There is much that successive administrations have been criticized for in as far as U.S. policy in the Middle East is concerned, but also much to be appreciated in its efforts. The Biden administration has stated its aim to promote a more integrated, prosperous and stable region, and this is a step toward that goal that should be applauded.

No other power in the world could have mediated this agreement and there are many lessons to be learned from this success. First, the United States’ role in various conflicts in the Middle East remains instrumental. Second, win-win steps are possible even in the most difficult of situations. Third, this endeavor was risky. Failure could have led to a military confrontation, but the risk paid off and was worth it. Fourth, this achievement, although historic, did not entail heavy lifting on the part of the administration. Finally, this can be replicated in other disputes in the East Mediterranean, or even the Israeli-Palestinian conflict, by separating enduring conflicts from win-win arrangements. The Cypriot question would be a good example in this regard. It will not be easy. Nothing comes easy in this region, but the rewards would be significant.

This agreement proves that even when peace is not possible, significant steps can be taken with broader implications and potential. Lebanese officials said that the deal is not a step toward normalization of relations between the two countries. However, this agreement has the potential of becoming a game changer because it can open the door for progress toward peace between Israel and Lebanon.

In the medium term, gas produced from new fields can be channeled to Egypt for liquification and export in a manner similar to the current arrangements between Egypt and Israel, and perhaps through the Arab gas pipeline from Lebanon to Egypt if discoveries exceed Lebanon’s internal needs.

Much work is still needed until a final approval is complete and the agreements signed between both countries and the United States are deposited in the United Nations. Likewise, it will require significant effort to make sure that both sides implement their obligations. However, there are signals that with U.S. determination, this will be possible.

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