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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Israeli offensive leaves Beirut in limbo5 June 2026

Lebanon is being held in economic and political limbo by Israel’s open-ended offensive in the south, which has killed more than 3,500 people since March and is characterised by strategic objectives that offer no clear end in sight.
Political leaders in Tel Aviv are justifying the operation on the grounds of eliminating Hezbollah – a far‑fetched goal against a dispersed guerrilla organisation, as with Hamas in Gaza – while ignoring overtures from Lebanon’s leadership for a ceasefire.
The recently formed Lebanese government, meanwhile, continues to look impotent: unable to secure its territory from Israeli incursions or Hezbollah activity, and unable to deliver on promises of stability, reform, IMF funding and reconstruction.
Echoes of the past
The overarching shape of Israel’s military campaign is ominously familiar, echoing the 1978, 1982, 1985 and 2006 Israeli invasions of southern Lebanon – all entailing creeping encroachment without strategic resolution.
Since fighting resumed on 2 March 2026, Israeli forces have gradually pushed north, crossing north of the Litani for the first time since the 2006 Lebanon war and seizing Beaufort Castle above Nabatieh on 31 May.
Israeli Prime Minister Benjamin Netanyahu has framed the goal as establishing a “security zone” – the same term and concept Israel used to justify the occupation of a roughly 800-square-kilometre belt of southern Lebanon from 1985 to 2000.
That occupation was a debacle for Israel’s military and ended in unilateral withdrawal.
Israeli analysts are already drawing the modern parallels as the cost of holding ground in southern Lebanon rises, driven by Hezbollah’s deployment of cheap fibre‑optic first‑person‑view (FPV) drones that inflict a steady drip of Israeli casualties and losses.
As with Russia in Ukraine, Tel Aviv is being tactically embarrassed by the advent of these fibre‑optic drones, which are immune to jamming and – of particular concern to Israeli forces – are too small to be reliably detected and intercepted by conventional counter‑drone systems.
This leap in Hezbollah’s operational threat – based on cheap technology that can be locally assembled – has sharply raised the price of maintaining a military presence in the country.
In an attempt to exact a retaliatory price, Israel’s air strikes rose by 110% between 19-22 May and 23-26 May as Hezbollah’s drone successes accumulated, according to conflict monitor Acled. But the underlying tactical dilemma remains.
Israeli politicians, irate at the situation, have demanded escalation and intensified strikes on civilian areas, including in Beirut – only to face US pushback.
Tehran as the lever
Planned strikes on Beirut, including on 3 June, have been held off in recent weeks under pressure from Washington after Tehran made Lebanon a bargaining chip in its wider negotiations with the US, repeatedly suspending talks following Israeli escalation in the Levant country.
Tehran has also gone further than walkouts, warning it could respond directly if Israel strikes Beirut – adding an explicit threat of retaliation to diplomatic pressure.
With a Gulf ceasefire and the reopening of the Strait of Hormuz both riding on the outcome, Washington is strongly motivated to keep Israel from striking Beirut.
In this way, Iran is one of the few powers wielding any leverage over Israel’s actions in Lebanon – even if that leverage is a source of discomfort for Lebanon’s leaders, for whom Tehran’s clout contrasts starkly with their own lack of influence.
That protection nevertheless remains narrowly tied to the Lebanese capital, with Washington turning a blind eye to Israel’s ongoing destruction of civilian infrastructure in Lebanon’s south.
Within the border belt that Tel Aviv has dubbed the “yellow line” – amounting to about 7% of Lebanese territory – Israeli forces have accelerated the demolition of villages since the April truce and barred residents from returning.
More than a million people, overwhelmingly Shia from the south and the Bekaa, have been displaced since March, and UN human-rights experts have pointed to the blanket evacuation orders and levelling of housing as mirroring Israel’s conduct in Gaza.
The Lebanese state remains trapped in inaction, partially of its own making. Beirut was initially close to indifferent to renewed strikes on Hezbollah, whose unilateral re-entry into the war it had condemned for endangering the state.
But as the strikes have shifted methodically towards civilian areas, Beirut’s restraint satisfies no one: the domestic audience wants protection, while Israel and the US want decisive Lebanese army action against Hezbollah.
Yet the Lebanese army – still adhering in spirit to the November 2024 ceasefire framework and loath to move seriously against Hezbollah for fear of stoking civil war – has remained aloof from the conflict.
Parliament speaker Nabih Berri, who is close to Hezbollah and maintains dialogue with the group, says it would honour a genuine ceasefire if only Washington could deliver one.
But repeated attempts to shore up the ceasefire have remained conditional on the Lebanese army stepping up to rein in Hezbollah, while failing to guarantee an end to Israel’s destruction of civilian structures in areas it is occupying.
On 3 June, a fourth round of US‑mediated trilateral talks produced a fresh ceasefire announcement, hailed in Washington as a step towards comprehensive peace.
Yet its conditions – a complete halt to Hezbollah fire, the group’s withdrawal south of the Litani and Lebanese army control of undefined “pilot zones”– merely reiterate past failed protocols. The declaration was unsigned by Hezbollah and unenforceable by Beirut.
Within hours, Hezbollah leader Naim Qassem rejected the declaration, stating that any ceasefire must cover the south and begin with Israeli withdrawal, not Hezbollah’s.
Both Israeli strikes and Hezbollah attacks have continued since the ostensible deal.
Recovery on hold
The economic cost to Lebanon, meanwhile, compounds by the day. The country entered 2026 already in crisis: cumulative GDP down close to 40% since 2019, the pound down 98%, public debt at 150% of GDP, and reserves as low as $11bn as of June 2025.
The government of President Joseph Aoun and Prime Minister Nawaf Salam staked its credibility on a long‑deadlocked IMF programme finally unlocking external support. The war has upended this, driving away investment and delaying reform.
The World Bank’s November 2024 assessment – covering only the previous round of fighting, before the March resumption – placed the economic cost at $14bn and recovery needs at $11bn, figures that the current war is now inflating by the day.
Lebanon’s Bank Audi has warned of zero growth this year if the war continues, versus a pre‑escalation projection of reconstruction‑led recovery. Tourism, historically a fifth of the economy and the engine of the 2024 rebound, has been the biggest casualty.
Looking ahead, no reconstruction can be financed while the destruction continues, and no IMF programme can advance while the state cannot ensure stability.
Iran’s leverage may be keeping the bombs off Beirut, but the south’s entrenchment as a war zone is only deepening – with hopes for recovery receding further with every village levelled.
While the costly occupation is imposing a rising political price on the Israeli government that may, in time, bring it to an end, this will be little consolation for those displaced – many of whom now have no communities to return to, and homes built over decades that are gone.
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Morocco tenders Falit dam project5 June 2026
Morocco’s Ministry of Equipment & Water has opened an international tender for the construction of the Falit dam in Figuig province.
According to local media reports, the project has an estimated budget of MD428m ($46m), with commissioning expected between 2029 and 2030.
The bid submission deadline is 15 July.
The dam will be built on the Moulouya River north of Bouarfa in eastern Morocco. The roller-compacted concrete structure will be 59 metres high and have a storage capacity of 25 million cubic metres.
The project is intended to provide drinking water supplies, support agricultural irrigation and enhance flood protection in the region.
Figuig is one of Morocco’s driest regions. It is also vulnerable to flash floods caused by sporadic but intense rainfall events.
Reported ministry data indicates that annual flows at the project site can reach 40.8 million cubic metres in wet years. Long-term average flows are estimated at about 10.3 million cubic metres a year.
The dam will include a spillway and a bottom outlet equipped with a 1,500-millimetre pipe. The outlet will have a discharge capacity of 28 cubic metres a second and will allow the reservoir to be emptied within 15 days if required.
Morocco dam infrastructure
The Figuig region is also home to the Kheng Grou dam project, which is designed to have a storage capacity of 1.07 billion cubic metres.
According to regional project tracker MEED Projects, the dam is on track to be completed by the end of the year.
Morocco-headquartered Bioui Travaux is the engineering, procurement and construction (EPC) contractor for the project, valued at $96m.
Another local firm Novec is acting as the main contractor on the project.
The Falit dam tender comes as Morocco continues to invest in new dams, desalination plants and water transfer schemes to address growing pressure on water resources.
The country currently has over $13bn-worth of dam projects under construction, the largest of which is the Ratba dam project in the province of Taounate.
Construction is also set to begin on the $238m Bou Ahmed Dam project, covering 259 hectares, in the province of Chefchaouen. According to MEED Projects data, this was the only major dam contract awarded last year.
The joint venture of Societe Generale des Travaux du Maroc and Stam Morocco, a subsidiary of the TGCC group, will carry out EPC works on the project.
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Saudi Energy commissions 2.5GW battery storage project5 June 2026
Saudi Energy, formerly Saudi Electricity Company, has commissioned a major 2.5GW battery energy storage project across five regions in Saudi Arabia.
The project, which serves power grids in Riyadh, Rabigh, Dawadmi, Jouf and Qassim, completed all grid-tied charging and discharging tests at the end of May, said Chinese supplier NR Electric in a statement.
National Grid Saudi Arabia, a wholly owned subsidiary of Saudi Energy, awarded Saudi firm Alfanar Company and China’s BYD Energy Storage the contract to build and install five battery energy storage system (bess) facilities with a total combined installed capacity of up to 2,500MW, equivalent to a rated capacity of up to 12,500 megawatt-hours, in January 2025.
Alfanar was appointed as the project’s engineering, procurement and construction contractor, while BYD Energy Storage was responsible for the design, supply, supervision of installation, testing and commissioning, and maintenance of the bess plants.
The 12.5 gigawatt-hour (GWh) project is the world’s largest grid-scale energy storage deployment, requiring 2,364 system cabinets in total.
NR Electric said it supplied the project’s grid-forming control technology and more than 2,000 power conversion system units.
The main applications for the planned bess facilities include load shifting, black start, frequency regulation and voltage support.
They are expected to replace part-load operation of existing power plants by charging and discharging electricity according to system load variations and primary and secondary reserves, among other potential applications.
Shenzhen-based BYD previously announced that the five bess plants would take its total deployments in Saudi Arabia to about 15.1GWh.
It deployed its bess products on Saudi Arabia’s first on-grid bess plant in Bisha, one of 17 projects globally with a capacity of over 1GWh that entered operations in 2024.
> Be recognised among the best in the industry at the MEED Projects Awards 2026 …
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Kuwait prepares to tender refinery project deal5 June 2026
State-owned downstream operator Kuwait National Petroleum Company (KNPC) has announced that it is preparing to tender a contract to develop a gauging system for a tank farm at the Mina Al-Ahmadi refinery.
The system will replace an older, now obsolete system at the South Liquid Tank Farm.
The contract will include engineering, procurement, construction, testing and commissioning of the new gauging system.
KNPC is planning to invite 24 companies to participate in the bidding process.
These are:
- JGC Corporation (Japan)
- Almeer Technical Services Co. (Kuwait)
- CTCI Corporation (Taiwan)
- Kellogg Brown & Root (US)
- Kentz Overseas (UAE)
- IMCO Engineering & Construction Company (Kuwait)
- National Petroleum Construction Company (UAE)
- Sinopec Luoyang Engineering (China)
- Sinopec Engineering Incorporation (China)
- Tecnicas Reunidas (Spain)
- SK Ecoplant (South Korea)
- Gulf Spic General Trading & Contracting Company (Kuwait)
- Hyundai Engineering (South Korea)
- Enppi (Egypt)
- Hyundai Engineering & Construction (South Korea)
- Saipem (Italy)
- Technip Energies (France)
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- Hanwha Engineering & Construction Corporation (South Korea)
- Sinopec Engineering Group (China)
- Samsung E&A (South Korea)
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- Fluor (US)
- Hyundai Heavy Industries (South Korea)
If a company has not been included in the list and would like to participate in the tender, it can file a complaint with the chairman of Kuwait’s Higher Purchase Committee within 30 days.
The Mina Al-Ahmadi refinery has been attacked and damaged as part of the regional war that broke out after the US and Israel attacked Iran on 28 February.
Several units were shut down at Kuwait’s largest oil refinery after it was hit by drones and fires broke out in the morning of 20 March 2026.
The refinery normally processes about 730,000 barrels of oil a day.
Kuwait’s oil and gas sector has been severely disrupted by the ongoing regional conflict, which has led to a dramatic drop in crude exports via the Strait of Hormuz.
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Kuwait tenders downstream consultancy contract5 June 2026
State-owned downstream operator Kuwait National Petroleum Company (KNPC) has tendered a consultancy contract focused on a liquid sulphur degassing facility for four sulphur recovery units at the Mina Al-Ahmadi refinery.
This type of unit removes dissolved hydrogen sulphide and other sulphur compounds from molten sulphur before it is stored, loaded onto trucks, or exported.
This makes the sulphur safer to handle and reduces emissions.
A total of 21 companies have been invited to participate in the tender.
These are:
- Asprofos Single Member Engineering Societe Anonyme (Greece)
- Enereco (Italy)
- EPC Constructions India (India)
- Engineering for the Petroleum & Process Industries (Enppi) (Egypt)
- Gulf Spic General Trading & Contracting Company (Kuwait)
- Heavy Engineering Industries & Shipbuilding Company (Kuwait)
- ILF Consulting Engineers (Austria)
- Larsen & Toubro (India)
- Litwin PEL (UAE)
- Mott MacDonald (UK)
- National Petroleum Construction Company (UAE)
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- Petrocil Engineers & Consultants Pvt. (India)
- PL Engineering (India)
- Processes Unlimited (US)
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- Toyo Engineering Corporation (Japan)
A pre-tender meeting for the project is scheduled for 8 June 2026, and the bid closing date is 25 June 2026.
The Mina Al-Ahmadi refinery has been attacked and damaged as part of the regional war that broke out after the US and Israel attacked Iran on 28 February.
Several units were shut down at Kuwait’s largest oil refinery after it was hit by drones and fires broke out in the morning of 20 March 2026.
The refinery normally processes about 730,000 barrels of oil a day.
Kuwait’s oil and gas sector has been severely disrupted by the ongoing regional conflict, which has led to a dramatic drop in crude exports via the Strait of Hormuz.
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> AGENDA: Gulf races to reroute trade> EXPORT ROUTES: Regional war boosts oil and gas pipeline project activity> CURRENT AFFAIRS: UAE’s Opec departure fulfils multiple ends> MEED TOP 100: Middle East stocks recover unevenly> LEADERSHIP: Building the infrastructure that makes net zero possible> TRADE DEAL: UK-GCC trade deal talks concludeTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/17119564/main.gif
