Gaza conflict tests UAE-Israel ties
13 June 2024

The stance of the UAE towards Israel has cooled dramatically in the past eight months amid the conflict in Gaza, which is proving to be a major test of the partnership built between Abu Dhabi and Tel Aviv.
From boasting of warm and open trade dealings, the UAE has gone quiet on its business deals with Israeli partners, while on a political and diplomatic level the humanitarian tragedy in Gaza has increasingly drawn condemnatory statements from UAE officials.
It is a twist in developments that neither country could have foreseen, as nor indeed had Saudi Arabia, which was nearing its own normalisation agreement with Israel. It has also taken a bilateral strategic partnership that was long in the making into uncertain territory.
Long-term partnership
The 2020 Abraham Accords that normalised relations between the UAE and Israel came at the tail end of at least a decade’s worth of interaction between the two countries. The agreement emerged first and foremost as a set of shared strategic interests in opposition to regional threats in the early 2010s.
In a very tangible interaction in 2016, pilots from the UAE and Israel for the first time participated together in aerial combat training exercises hosted by the United States Air Force (USAF) in Nevada.
The UAE’s relationship with Israel also intersects with its relationship with the US, including its hope of securing access to advanced US military technology and assets, such as the F-35 Stealth Fighter Jet.
In September 2020, UAE foreign ministry spokesperson Hend Al-Otaiba stated that a request for the F-35 had been made six years previously, and that, “given that the UAE intends to be a partner to Israel, and already has a deep strategic partnership with the US, we are hopeful the request will be granted”.
While the sale of the F-35 by the US to the UAE has yet to materialise, relations between the UAE and Israel have nonetheless thrived on their own since the accords, on the basis of ongoing shared security interests and the opportunities for business, trade and investment between the two countries.
Since 2020, the value of trade between the UAE and Israel has swollen to about $3bn annually, and defence ties have only strengthened. In 2022, Israel supplied the UAE with air defence systems following long-range attacks on the UAE's oil infrastructure by the Iran-aligned Houthi movement in Yemen.
Israel-Palestine problems
It was as early as June 2023, however, that US Secretary of State Antony Blinken first warned that rising tensions in Palestine and Israel’s actions in the West Bank could imperil the process of normalisation.
With the advent of the war in Gaza, those fears of a damaging escalation in tensions have been realised.
As the conflict erupted in October, the UAE kept its distance and restricted itself to only the most limited commentary, condemning the “serious and grave escalation” by Hamas-led militants while calling for the full protection of all civilians under international humanitarian law.
By November, as the violence in Gaza ratcheted up, Abu Dhabi similarly affirmed its commitment to the accords even as individual UAE officials publicly condemned Israel’s actions and called for an end to the violence, pushing for a ceasefire, humanitarian aid and the release of hostages.
Anwar Gargash, a diplomatic adviser to the president, labelled the conflict a “profound setback” for the region, and stressed that the tragic course of events should lead to a political re-engagement on the issues of realising a two-state solution with East Jerusalem as its capital.
The close working relationship between the UAE and Israel nevertheless continued, as evidenced by Israel’s acquiescence to Abu Dhabi’s humanitarian efforts in Gaza, which have included the UAE setting up a field hospital and performing aerial aid drops in the territory.
The long grind of the conflict and the increasing inflexibility and intransigence on ceasefire negotiations by Israeli Prime Minister Benjamin Netanyahu have nevertheless steadily eroded this early good will.
While in early January, Gargash affirmed that the normalisation agreement was “a strategic decision, and strategic decisions are long-term”, by late January, senior UAE officials were ringing alarm bells.
Four months on, speaking at the Arab Media Forum in Dubai in late May, Gargash lambasted the conflict in Gaza as having taken on “brutal and inhuman dimensions”, stating that the “heinous attack in Gaza and Rafah cannot be overlooked” – a far more critical tone than his earlier conciliatory speech.
Unreliable partner
On the international stage, the disinclination of the Israeli government to listen to any of its key allies or partners has been trying for all, including the US. For Israel’s normalised partners in the Middle East, the conflict has underscored the tension between the Abraham Accords and underlying regional sentiments.
The UAE’s own founding father, Sheikh Zayed, was an ardent personal supporter of the Palestinian cause, and under his watch, the UAE was one of the first states to recognise Palestine as an independent state.
In the present, the humanitarian catastrophe in Gaza is drawing the competing influences of the UAE’s contemporary strategic interests and underlying sympathy for the Palestinian people into stark relief, and it is having a chilling effect on relations.
Public announcements in the UAE of deals with Israeli companies, which abounded before the conflict, have evaporated, and at least one very public deal has been put on hold amid the uncertainty.
Abu Dhabi National Oil Company (Adnoc) had been due to take a $2bn stake, alongside the UK’s BP, in Israeli gas producer NewMed, which holds 45% of Israel’s Leviathan offshore gas field.
In mid-May, Netanyahu suggested that the UAE could be involved in the governance of Gaza – drawing a swift rejection from UAE Foreign Minister Sheikh Abdullah Bin Zayed Al-Nahyan, who stated: “The UAE refuses to be drawn into any plan aimed at providing cover for the Israeli presence in the Gaza Strip.”
The episode was a stark demonstration of the breakdown in communication and diplomatic alignment between Abu Dhabi and Tel Aviv, and it joins a wider pattern of reports that UAE officials are already looking beyond Netanyahu and cultivating relations with his potential successors.
On 5 June, the UAE’s foreign minister again condemned the Israeli government after it allowed the divisive annual ‘Flag March’ of Israeli settlers through Jerusalem’s old city, as well as settler activism in the Al-Aqsa Mosque compound, despite the extraordinarily heightened tensions over Gaza.
For UAE-Israel ties to thrive, Abu Dhabi needs a government partner in Tel Aviv that it can work with on a productive basis to safeguard interests between the two countries while avoiding diplomatic affronts.
Unfortunately for the UAE, the current Israeli government – with the far-right ministers that Netanyahu has brought into the cabinet – has had a habit of proving itself to be the very antithesis of such a partner.
Looking ahead, it could be a long road for UAE-Israel ties to return to resembling their halcyon state of 2021-22, and it will take a government in Israel under someone other than Netanyahu to get there.
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Dubai real estate buys time17 March 2026
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A new report from S&P Global Ratings, published on 16 March, outlines the parameters of the risk.
The core argument is that while Dubai is not facing an immediate 2008-style collapse, the market’s resilience is now a function of time. If the conflict intensifies beyond a one-month horizon, the strains on prices, investor confidence and developer balance sheets could become severe.
Momentum stalls as caution takes hold
The most immediate impact of the conflict has been psychological. According to S&P, official sources are already reporting lower transaction volumes since the war began. The prolonged war could mark the end of the post-pandemic boom, shifting the market into a phase of guarded caution.
The luxury segment, which has driven much of the recent growth, is seen as the most vulnerable. High-net-worth individuals who relocated to Dubai for its perceived safety and tax advantages may now reconsider their positions, given that the city’s ‘safe haven’ status is being tested.
S&P’s baseline forecast assumes the most intense phase of fighting will last up to four weeks. Under this scenario, the market will likely experience a slowdown in both volumes and prices, with the declines being more pronounced the longer the uncertainty drags on.
The report notes a flight to liquidity, predicting that secondary market transactions will become more prevalent as investors seek to offload properties, further suppressing values.
Apartments are expected to suffer steeper price drops than villas due to a robust supply pipeline.
Regulatory shields and the threat of a prolonged conflict
One of the central tenets of the report is that Dubai’s post-2008 regulatory framework provides a crucial buffer. Escrow accounts and stringent payment plans mean that for projects already under way, developers should be able to complete construction, barring a wave of mass investor defaults.
The rules offer significant protection: developers can retain up to 40% of the property value if construction is on schedule, refund the remainder, and repossess the unit for resale.
However, this protection has limits. S&P warns that a prolonged war scenario would test these regulations. If the Strait of Hormuz remains closed, supply chains for construction materials could bottleneck, driving up input costs. More critically, the rules that protect developers would only be effective up to a point.
In a deep and lasting downturn, project cancellations would become likely, particularly for newly launched developments that have not secured substantial presales.
The analysis suggests that while top-tier developers weathered past downturns with delinquency rates of just 3-10%, the figure for newer, less experienced players could be much higher.
Rated developers have headroom, but it is not infinite
The four major developers rated by S&P with exposure to Dubai are Emaar Properties, Damac Properties, PNC Investments and Omniyat Holdings. All of these players enter the period of uncertainty from a position of relative strength.
The report highlights that years of strong sales have created significant revenue backlogs covering several years.
Emaar leads with the revenue backlog of about $37bn, equivalent to 2.7 years, while Damac holds about $22bn of backlog, representing 2.3 years.
Their leverage is low, and cash positions are meaningful. As of 31 December 2025, Emaar held $7.5bn in cash and liquid investments, with $11.7bn as escrow cash balance.
Damac holds $1.7bn in total cash, including $6bn in escrow, while PNCI and Omniyat hold more modest balances of $600m and $600m, respectively.
S&P has built “substantial headroom” into their credit ratings to absorb sudden shocks.
The liquidity assessments for all four companies are adequate, with manageable debt maturities in 2026.
The critical question is duration. If the conflict grinds on, the buffers will narrow.
S&P states that in a prolonged scenario, its reassessment will focus on construction progress, cash collection and working capital.
The financial policies of management teams, specifically their willingness to maintain low leverage and cut dividends, will be key to preserving creditworthiness.
Capex and dividends under review
The war will also force a recalibration of corporate strategy. The report notes that investment decisions are likely to be postponed or cancelled. While commitments for projects nearing completion will proceed, companies will prioritise liquidity over new land purchases.
This is most pronounced for Emaar, which has sizeable capital expenditure plans of AED10bn-AED11bn ($2.7bn-$3bn) annually in 2026-27 for projects such as Dubai Creek Tower, Dubai Creek Mall and the expansion of Dubai Mall. S&P believes a significant portion of this spending is flexible and can be delayed if needed.
Dividend policies will also be tested. The report expects dividend distributions to remain substantial but potentially adjustable.
S&P’s analysis paints a picture of a market that is braced for impact but not yet broken. The fundamentals are stronger than they were in 2008, thanks to tighter regulations and well-capitalised developers with $10bn in combined cash reserves.
However, the market’s fate is now externally determined. If the conflict remains contained and short-lived, Dubai’s real estate sector should absorb the shock with manageable declines.
But if the war becomes a protracted regional crisis, the meaningful correction that S&P flags as a possibility will move from the realm of the theoretical to the probable, testing the resilience of both the developers and the regulatory framework designed to protect them.
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Saudi Energy pushes back deadlines for power projects17 March 2026
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The contract was originally tendered in December, and the deadline had previously been extended to 9 March.
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The new bid submission date is 26 March.
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Fujairah oil hub targeted in fresh drone strike17 March 2026
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The Fujairah Oil Industry Zone (FOIZ) was hit by another drone attack early on 17 March, causing a fire, authorities in Fujairah said.
No injuries have been reported in the attack, and the emirate’s civil defence teams are dealing with the situation and trying to control the fire, the official Emirates News Agency (Wam) reported, citing the media office of the Government of Fujairah.
This is understood to be the fifth attack since the start of March that FOIZ has suffered from drone or debris resulting from interceptions by the UAE’s air defence systems, as Iran continues to hit energy and industrial facilities in the UAE.
Fujairah benefits from its strategic geopolitical location outside the Strait of Hormuz, which Iran has blockaded in its ongoing conflict with Israel and the US, choking about a fifth of the world’s oil and gas supplies.
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Oman has signed 17 international investment and development agreements worth over RO762m ($1.98bn) at the Mipim 2026 event held in Cannes, France.
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Ashghal tenders northern Smaisma infrastructure17 March 2026

Qatar’s Public Works Authority (Ashghal) has issued a tender covering infrastructure development in the northern Smaisma area.
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The contract duration is four years from the start of construction works.
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According to a notice published on its website, these include six building projects, most notably the redevelopment of Hamad General Hospital, with a contract value of about QR1.1bn ($301m).
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According to UK analytics firm GlobalData, Qatar’s construction industry is expected to expand by 4.3% in 2026, supported by investments in renewable energy and transportation infrastructure.
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