The peace process has not only affected Israel’s relations with the Arab world, but has also greatly improved Israel’s standing in the international community. In quantitative terms, Israel today maintains diplomatic relations with 163 states, an increase of 71 since the convening of the Madrid Conference in 1991. In qualitative terms, special note should be taken of the development of relations with the two great Asian powers: China and India. The establishment of relations with these powers holds promise of tremendous strategic and economic potential.

In this same context, we should note the change which has occurred in the entire Euro-Asian sphere. In the huge territory extending from former East Germany in the west to Vladivostok in the east and India in the south, there were in the beginning of 1991 only two Israeli embassies, in Romania and Nepal, and a consulate in Bombay. Today there are Israeli diplomatic missions in all but five of the countries in this area: North Korea, Pakistan, Afghanistan, Bangladesh and Bhutan.

A breakthrough has also been achieved in Israel’s relations with non-Arab Moslem countries. Diplomatic ties have been established with nine states: Albania, Gambia, Nigeria, Azerbaijan, Kazakhstan, Kyrgystan, Turkmenistan, Tajikistan and Uzbekistan. There has also been a marked improvement in our relations with Turkey, which hold special significance.

In December 1993, Israel signed a Fundamental Agreement with the center of the Catholic world, the Vatican, following decades of total refusal on the part of the Church to establish diplomatic relations with us, for both theological and political reasons.

The peace process also facilitated the conclusion of an agreement improving the terms of Israel’s free trade agreement with the European Union, allowing Israeli companies to better compete on the attractive EU markets.

In Africa, Israel today has ties with 39 of the 43 states south of the Sahara which are not members of the Arab League. Of these 33, relations have been renewed with 30 since 1991. Israel maintains contacts with those states which have not yet renewed diplomatic relations.

The peace process also also led to an improvement in Israel’s status in international organizations, reflected in a decline in the number of debates and resolutions pertaining to Israel and the Middle East. We have also begun to see Israelis being elected to senior positions in the United Nations organizations and agencies.

All this notwithstanding, the most dramatic change in Israel’s international standing can be seen in our growing relations with the Arab world. In addition to full diplomatic relations with two of its neighbors, Egypt and Jordan, an Israeli liaison office is functioning in Morocco, an interest office has been opened in Tunisia, and trade offices in Oman and Qatar. With the resumption of the peace initiative by Prime Minister Barak, there is talk of upgrading these relations. The first expression of this was the establishment of full diplomatic relations between Israel and Mauritania on October 28, 1999.


While the convening of the multilateral working groups in such countries as Tunisia, Morocco, Oman, Qatar and Bahrain has made Israeli visits to these states commonplace, several top-level visits are noteworthy. Environment Minister Yossi Sarid was the first Israeli minister to visit Bahrain as head of the Israeli delegation to the Working Group on the Environment in October 1994, and on November 1, 1994 attended the Conference of Environment Ministers from Mediterranean States in Tunis.


The November 7, 1994 visit by former Deputy Foreign Minister Yossi Beilin to Oman at the invitation of the Omani Foreign Minister was the first such visit outside the multilateral framework. These visits culminated in the first official visit by Prime Minister Shimon Peres to Oman and Qatar in April 1996.


The peace process, as it has evolved since the Madrid Conference in October 1991, has provided the stimulus for noteworthy economic momentum in both the regional and the Israeli economies.

One of the first concrete expressions of the change which has occurred in the region as a result of the peace process was the public declaration by the Gulf States on October 1, 1994 to support a review of the Arab boycott of Israel, in effect abolishing the secondary and tertiary boycott against Israel.

In the wake of the peace process and the collapse of the Communist regimes in eastern Europe and central Asia, Israel established diplomatic and economic relations with states in Asia, the Middle East and Europe, thus opening new markets and fields of activity to the Israeli economy. A salient example is the growth in Israeli exports to Asia: In 1991, exports to Asia decreased by 4.1%, followed by successive increases of 52% in 1992, 49.6% in 1993, 25.8% in 1994, 24.4% in 1995, and 6.5% in 1996.

There has been a marked improvement in Israel’s economic relations with Egypt. The Egyptian authorities have facilitated the movement of businessmen in both directions, and joint ventures between industrialists from the two countries are beginning to develop.

Following the Israel-Jordan Peace Treaty, a trade agreement has been signed between the two countries. Contacts between industrialists and commercial organizations in both countries have already begun (see Israel-Jordan).

Despite the absence of full diplomatic relations, business contacts have been established with Morocco and in several of the Gulf states.

The peace process has aroused great interest in the international business community with regard to the regional potential of the Middle East in time of peace. This interest is reflected in the large number of visits to Israel by private sector representatives and delegations from many countries. Many examples can be cited of cooperation with foreign companies which for years refrained from activity in the Israeli market, whether because of the Arab boycott or because of instability in the region. A salient example of the qualitative change in this field in the wake of the peace process is the authorization given at the end of 1994 by the Tokyo stock exchange to Japanese firms to invest in the Israeli stock market.