The unravelling of Netanyahu's Iran policy: Trump's diplomacy with Iran creates political crisis for Israeli PM

For much of his political career, Israeli Prime Minister Benjamin Netanyahu cultivated an image as the indispensable guardian of Israel's security and also a Washington insider. No issue defined that identity more than Iran. For decades, Netanyahu warned that the Islamic Republic posed the gravest threat to Israel's future and made preventing Tehran from acquiring nuclear weapons the central mission of his political life.

Today, that carefully constructed legacy is facing perhaps its greatest challenge. Netanyahu finds himself increasingly isolated as President Donald Trump pursues a ceasefire and diplomatic understanding with Iran that cuts directly against the foundations of Israel's current security strategy. What was once regarded as one of the closest and most effective political relationships in the world now appears strained. The growing rift between the two leaders has left Netanyahu politically exposed, raising questions about his influence in Washington and his ability to shape the regional order he has spent years building.

The ongoing crisis is clearly a personal and professional setback for Netanyahu. It has clearly invalidated a strategy he thought would ensure Israel's dominance in the Middle East. He opted for an all-out attack against Iran and its proxies in the region following the Hamas attacks of 2023. Subsequently, Hamas, Hezbollah and other Iranian assets across the Middle East were targeted aggressively. Netanyahu thought it would weaken Iran's proxies and might even lead to the downfall of the regime in Tehran.

In fact, the broader vision extended beyond military objectives. Netanyahu believed that a weakened Iran would remove one of the principal obstacles to deeper cooperation between Israel and key Arab states. The prospect of normalisation with Saudi Arabia appeared within reach before the Gaza war erupted. Supporters of the government's approach argued that reshaping the regional balance of power could marginalise long-standing conflicts and create a new security architecture centred on Israel and its Arab partners.

Instead, events have unfolded very differently. The Iranian regime remains firmly in power and continues to wield influence across the region. Far from collapsing under pressure, Tehran has strengthened diplomatic ties with several regional actors while presenting itself as a central player in efforts to manage tensions. Israel, meanwhile, finds itself stretched across multiple theatres. Large military commitments remain tied to Gaza and Lebanon, while the political and diplomatic costs of prolonged conflict continue to grow.

The broader regional picture has also become more complicated. The war in Gaza has placed the Palestinian issue back at the centre of international diplomacy, making it far more difficult for Arab governments to pursue closer relations with Israel. Saudi-Israeli normalisation, once viewed as a potentially transformative breakthrough, now appears considerably more distant than it did before the conflict.

Against this backdrop, Trump's push for a diplomatic arrangement with Tehran has intensified Netanyahu's predicament. Trump, meanwhile, is under growing pressure to keep the United States out of another Middle East conflict and focus on problems closer to home, including economic uncertainty and rising energy prices. For Washington, de-escalation offers clear political advantages. For Netanyahu, however, the prospect of a deal raises fears that years of pressure on Iran could be undone through negotiations that leave much of Tehran's strategic capacity intact.

Particularly alarming for many Israeli strategists is the possibility of sanctions relief. From Israel's perspective, Iran represents more than a nuclear challenge. It is a large and resource-rich regional competitor with a population of roughly 90 million people, vast energy reserves and significant industrial capabilities. Israeli security thinkers have long argued that economic sanctions limit Iran's ability to convert those advantages into regional power. Any agreement that restores access to frozen assets or significantly expands Iran's economic opportunities would therefore be viewed in Jerusalem as a major strategic setback.

Adding to Netanyahu's difficulties is the increasingly personal nature of the dispute with Trump. Previous Israeli prime ministers have disagreed with American presidents, and Netanyahu himself frequently clashed with Barack Obama and later found points of tension with Joe Biden. Yet those disagreements often strengthened his domestic political standing by allowing him to present himself as a leader willing to stand up to Washington in defence of Israeli interests. Trump's criticism is different. His influence among conservative and pro-Israel voters has historically been strong, making public disagreements far more damaging for Netanyahu.

As a result, Netanyahu now faces the biggest political crisis of his life. As Trump goes along a path he has always opposed, he is worried that he is losing influence, which could have a direct impact on his election prospects as well. But Netanyahu has always been a survivor, and his supporters believe that he will have enough cards up his sleeve to effect yet another comeback.