During President Donald Trump’s trip to the Middle East earlier this month, he shuttled between Gulf capitals to announce major economic deals. In Qatar, it was an eye-popping $1.2 trillion economic commitment in trade agreements and direct investment. Saudi Arabia pledged to invest $600 billion in the United States in defense, energy and infrastructure. And in the United Arab Emirates, Trump announced a series of agreements — including one to build Stargate UAE, the largest artificial intelligence campus outside the United States, in partnership with OpenAI and Nvidia — worth more than $200 billion, on top of $1.4 trillion previously committed in U.S. investments.

Missing from the list of deals announced on Trump’s Middle East junket was any kind of similar agreement with Israel, which Trump did not visit on his first major trip abroad since returning to office. Economic ties between the U.S. and Israel are strong; Israel is a larger trading partner to the U.S. than either Saudi Arabia, the UAE or Qatar, and American investors are among the biggest investors in Israeli startups. But the country lacks the liquid financial firepower that is available to the oil-rich Gulf monarchies, which risks placing Israel at a disadvantage in the eyes of an American president who sees the world as a series of business deals. 

“You try not to compete in areas where you have a disadvantage. We have a capital disadvantage. So we should compete where we have an advantage, which is on innovation and technology,” said Michael Eisenberg, who co-founded Aleph, an Israeli VC firm. 

Some Israeli business leaders and innovators are now urging the country to seriously consider adopting a strategy of “economic diplomacy” to place the country more firmly on Trump’s radar. They think that startup founders and venture capitalists stand to serve as Israel’s best ambassadors, better suited to make the economic case for deepening U.S.-Israel ties than the buttoned-up bureaucrats who populate global capitals advancing Israel’s interests.

“Founders are Israel’s best ambassadors. They travel more than diplomats, pitch to the world’s biggest investors and solve real-world problems that transcend borders,” said Jon Medved, the Israel-based CEO of OurCrowd, a global venture investing platform. “Do they have a responsibility to engage in economic diplomacy? I think they already do, whether they realize it or not.” 

Where the Gulf countries have the ability to spend seemingly endless sums of money on American investments and projects to woo Trump, Israel offers “deep tech expertise” and a venue for early stage collaboration that cannot easily be replicated. 

“We’re the lab. The Gulf can be the scale-up market,” Medved continued. “There’s a powerful opportunity for synergy, not just competition.” 

It’s not news to the American government that Israel excels in technology. In 2022, the two countries launched a strategic high-level dialogue on technology as a way to advance cooperation on artificial intelligence, climate change and pandemic preparedness. (The dialogue slowed down after the Oct. 7, 2023, Hamas attacks.) 

Avner Golov, who until 2023 served as the senior director for foreign policy in Israel’s Prime Minister’s Office, thinks the collaboration between the two countries should be formalized with a photo op, like the signing ceremonies Trump participated in during his visit to the Gulf. The U.S.-Israel security memorandum of understanding, which promises Israel $3.3 billion in U.S. security assistance annually, expires in 2028, and Golov thinks the renegotiation of that agreement is an opportunity to strengthen the tech and economic ties between the countries — to put Israel’s tech diplomacy to the test. 

“I envision going to the White House Rose Garden, signing, for the first time, a formal strategic partnership between Israel and America, approved in both Congress and the Israeli Knesset,” Golov told Jewish Insider. Such a deal, as Golov sees it, might also include ways to make it easier for American businesses to operate in Israel. 

Eisenberg, who has invested in major Israeli startup successes such as WeWork and Lemonade, thinks changes to Israel’s “regulatory environment” can help make the sell to American companies and, by extension, Trump. 

“We’re not going to do zero taxes like Dubai, but we need to be attracting more capital here by making our regulatory environment much simpler and lowering our capital gains taxes to be competitive with the United States so that we can bring capital formation vehicles like hedge funds to Israel,” Eisenberg said. 

Of course, many leading tech companies already have large operations in Israel. The chip giant Nvidia announced a $500 million investment in an Israeli AI research data lab in January. In March, Google acquired the Israeli cybersecurity company Wiz for $32 billion, Google’s largest-ever acquisition. Nvidia CEO Jensen Huang and Google President Ruth Porat were with Trump in Saudi Arabia, along with other top CEOs. 

“Many of them have employees in Israel because of our innovation, but we need to build a strategy around attracting them, getting deeper engagement and using them in our attempt to build us into a regional superpower,” added Eisenberg. 

Israeli Prime Minister Benjamin Netanyahu has long touted Israel’s startup ecosystem, but some worry he has not sufficiently tapped into that world to meet the moment, when Trump — whom Netanyahu has always sought to present as a close friend — seeks flashy financial success on the world stage. 

“[Netanyahu] should have realized that in a competition for the affections of a strongman like Trump, Israel had little to offer,” The Atlantic’s Yair Rosenberg wrote this month. 

But the basis of the U.S.-Israel relationship has never been purely about dollars and cents. 

“If we’re going to make sure, ‘Hey, don’t forget about us,’ it’s not about money. It’s about morality and humanity and the purpose of Israel on the world stage,” former U.S. Ambassador to Israel Tom Nides told JI. “Obviously there’s this whole notion that there are a lot of deals to be done. But that’s not how we compete.” 

Secretary of State Marco Rubio said in his first appearance on Capitol Hill since being confirmed as secretary of state that Iran’s support for regional terrorist proxies has not been part of the ongoing talks between the Iranian government and Middle East envoy Steve Witkoff, which Rubio said have been focused wholly on Iran’s nuclear program and enrichment capabilities.

At the same time, Rubio insisted that any sanctions related to terrorist activity and weapons proliferation would remain in place if such issues are not part of the nuclear deal. 

Rubio’s comments indicate the deal might still be subject to what some critics in the United States and the region described as a key flaw of the original nuclear deal — that it failed to address other malign activity by the regime. One U.S. lawmaker who traveled to the Middle East recently said that U.S. partners in Israel and the Arab world had argued that any deal must include non-nuclear provocations.

Rubio added that sanctions will remain in place until a deal is reached, and that European partners are working separately on re-implementing snapback sanctions, potentially by October of this year, when such sanctions expire.

He also said that Iran cannot have any level of nuclear enrichment under a nuclear deal, as it would inevitably provide a pathway for Iran to enrich to weapons-grade levels.

“About 90% of the work of enrichment is getting to that 3.67% level [necessary for civilian nuclear power]. After that, the rest of it is just a matter of time,” Rubio said. “They [Iran] claim that enrichment is a matter of national pride. It is our view that they want enrichment as a deterrent. They believe that it makes them a threshold nuclear power, and as a result, [become] untouchable.”

Rubio said that reaching a nuclear deal will not be easy, but that it is the administration’s preference. He reiterated that Iran can be permitted to have nuclear energy for civilian use, but only if it imports nuclear material from elsewhere. He said at a second hearing later in the day that a so-called 123 Agreement for civilian nuclear cooperation with the United States or an equivalent deal would be possible if Iran dismantles its enrichment capacity.

Addressing the war in Gaza, Rubio said that the U.S. is ultimately hoping to end hostilities, adding that ending the war will require Hamas freeing the hostages and ensuring that Hamas and similar terrorist groups do not maintain power in Gaza. He placed blame on Hamas for failing to agree to a ceasefire.

Rubio said that regional partners are willing to step up to help support the reconstruction of Gaza, but said that the territory’s future governance will be the key question going forward. He said that a stable governing authority capable of providing peace and security will be necessary to keep Hamas out of power.

Rubio also denied any plans for forcible or permanent relocation of Palestinians in Gaza, but said that the administration had been engaged in discussions with other regional partners about allowing Gazans who want to temporarily relocate to do so. He said he was not aware of any such conversations with Libya, as a recent NBC News report suggested.

“You don’t want people trapped [in Gaza]. They may want to come back, they may want to live there in the future, but right now, they can’t,” Rubio said. “And if there’s some nation willing to accept them in the interim period, yes, we’ve asked countries preliminarily whether they would be open to accepting people, not as a permanent situation, but as a bridge towards reconstruction.”

He said that the U.S. was “pleased to see that aid is starting to flow” into Gaza, after Israel had blocked it for 11 weeks.

He rebutted accusations that Israel is seeking to destroy Gaza, saying that Israel has told the U.S. and the world that “they need to root out the remaining elements of Hamas — who, by the way, have been an impediment to multiple ceasefires.”

Later in the day, Rubio reiterated that the U.S. sees resuming humanitarian aid as a priority and has encouraged Israel to allow aid into Gaza — a divergence from some Israeli officials and congressional Republicans who have opposed allowing aid into Gaza. He appeared to acknowledge that the humanitarian situation in Gaza is dire.

“Many of you have noticed there’s been a growing number of anti-Hamas protests and demonstrations as well. So there are people there that understand that this is a root cause of it,” Rubio said. “That said, you have this, you have this acute, immediate challenge of food and aid not reaching people, and you have existing distribution systems that could get them there.”

He said that Israel can defeat Hamas and prevent diversion of aid while still permitting “sufficient quantities” of aid to move into the territory. He said that organizations like the World Food Program have the capacity to immediately begin distributing aid, reflecting the reticence of Israeli and U.S. officials to rely on the U.N. for distribution.

The secretary of state continued to embrace the administration’s policy of revoking student visas and residency permits from individuals alleged to be involved in anti-Israel activity on college campuses, adding that such revocations will continue.

“We’re going to do more. There are more coming. We’re going to continue to revoke the visas of people who are here as guests and are disrupting our higher education facilities,” Rubio said. “I want to do more, I hope we can find more.”

Rubio said later in the day that thousands of student visas have been revoked, but many for reasons unrelated to anti-Israel activity.

He denied reports that the administration is planning to eliminate the position of U.S. security coordinator for Israel and the Palestinian territories, saying that there had instead been discussions about bringing the mission under the authority of the U.S. embassy in Jerusalem.

Rubio also pushed back on accusations from Sen. Jacky Rosen (D-NV) that the administration was “abandoning” a push for normalization of relations between Israel and Saudi Arabia, saying instead that “the Saudis are the ones that have expressed their inability to move forward on it, so long as the conflict is happening in Gaza. But we would love to see normalization.”

The secretary of state spoke at length about the situation in Syria and the administration’s decision to remove sanctions on the country. He acknowledged that, even with U.S. engagement, the situation in Syria could still collapse, but argued that collapse would have been a certainty if the U.S. had not chosen to engage and lift sanctions.

“It is our assessment that, frankly, the transitional authority, given the challenges they’re facing, are maybe weeks, not many months, away from potential collapse and a full scale civil war of epic proportions, basically the country splitting up,” Rubio said.

Despite President Donald Trump’s announcement that the U.S. would remove “all” sanctions from Syria, Rubio said in the second hearing that the sanctions would be removed “incrementally.” He said that Syria’s designation as a state sponsor of terrorism should be removed if Syria meets the conditions for such a move.

Rubio said that resolving internal divisions, restoring a unified Syrian national identity and creating a situation in which millions of displaced persons can return will be critical challenges going forward.

Rubio described the fall of the Assad regime and the possibility of a stable and peaceful Syria as an “opportunity for Israel,” despite the Israeli government’s deep concerns about the new Syrian government and its leader’s past jihadi loyalties. 

“They’re not viewing themselves as a launch pad for revolution. They’re not viewing themselves as a launch pad for attacks against Israel,” Rubio said. “So we think this is an extraordinary thing, if, in fact, you have in Syria a stable government that encompasses all the elements of their society and has no interest whatsoever in fighting wars with Israel over borders or anything else. I think that’s an extraordinary achievement for Israel’s security.” 

He said that the U.S. has been working to mediate conflicts between Turkey and Israel inside Syria, but added that Syrian government decisions in the medium term about whether to allow Turkey or Russia to maintain bases inside Syria will be a key issue going forward. 

He said Iran is still working to foment violence inside Syria, which he characterized as one of the most critical threats to the new government’s stability.

Rubio said Trump had moved more quickly than anticipated in meeting with Syrian President Ahmed al-Sharaa, but said that removing sanctions will allow regional partners to surge aid in, helping to build a more stable government and unify armed forces in the country.

But Rubio also said that action from Congress will be needed to repeal other sanctions legislation like the Caesar Act that can only be temporarily waived by the president, pending performance from the Syrian government.

He described the situation in Syria as the “first test” of what he characterized as a new approach to U.S. foreign aid and engagement driven more by local personnel and bureaus than Foggy Bottom.

Rubio said that the U.S. Embassy in Syria remains closed due to concerns about potential attacks from other armed groups in the country, explaining that the U.S. does not see the new government led by former jihadist fighters as a security threat.

He said that ISIS, with which al-Sharaa was previously affiliated, “hates the transitional authority, and they hate al-Sharaa, and they hate everybody in his government and I think pose a grave risk to them.”

He said that the Syrian government is willing to take over counter-ISIS operations but currently lacks the capacity to do so.

He added that stability in Syria would help bring stability in Lebanon, and if those two countries become stabilized, it “opens up incredible opportunities around the region for all kinds of peace and security and the end of conflicts and wars.”

Rubio denied any knowledge related to a potential gift of a Boeing 747 jet from Qatar to Trump or the U.S. government.

Asked about the situation, the secretary of state declined to speak publicly about conversations with the United Arab Emirates regarding its backing of one of the warring parties in Sudan that the U.S. has found is committing genocide, but said that it doesn’t “serve the interests” of international parties to back belligerents in the conflict “because instability there is going to create a breeding nest for radicalism.”