A fundamental realignment is transforming the Middle East, as strategic partnerships between Israel and several Arab states increasingly sideline the Palestinian question that once defined regional politics, according to an analysis by Japan's ambassador to Israel writing in a personal capacity.
The region's evolution from the oil-shock era of the 1970s has accelerated into a new architecture centered on what the ambassador describes as alignment between Israel and "moderate Arab" states, driven primarily by shared concern over Iran as the principal regional threat. Recent US-Israeli action against Iranian assets, along with Iranian retaliatory strikes against Israel and Gulf states, has likely strengthened this emerging alignment, the ambassador wrote. Its future will depend on the course of US-Iran diplomacy, Iran's internal political trajectory, and the prospects for expanding the Abraham Accords, especially to include Saudi Arabia.
Economic Transformation and Strategic Priorities
The region is moving from a traditional hydrocarbon-based economy toward a new model centered on advanced technology, artificial intelligence, nuclear energy, and defense innovation. At the same time, the historic influence of Egypt, Syria, and Iraq has declined, with the vacuum filled by the rise of Gulf states—especially Saudi Arabia, the United Arab Emirates, and Qatar—alongside Israel. Together, and largely under US strategic guidance, these countries are forming a new regional architecture, the ambassador noted.
Three factors explain this transformation, according to the analysis. First, Israel and the Gulf states have achieved significant economic prosperity, with some now having higher per capita GDP than Japan, while other regional actors continue to face economic fragility or state failure. Second, the gradual reduction of the US security footprint in the Middle East has pushed regional actors to reconsider local security frameworks. Third, regional states increasingly prioritize sovereign governance and domestic prosperity over the old "Arab cause."
The Palestinian issue, once the central imperative of that cause, now often functions as part of the region's public diplomatic language while practical policy is increasingly guided by national interest, the ambassador wrote.
US Strategic Vision and Indo-Pacific Implications
Since the Obama administration, the US has formally sought to reorient its strategic focus toward the Indo-Pacific. In practice, repeated crises have kept Washington deeply engaged in the Middle East: terrorism after September 11, the Iraq War, the Arab Spring, the Syrian civil war, the October 7 Hamas attacks on Israel, and continuing tensions with Iran. Japan understands the cost of Middle East instability and responded to past regional crises through major national commitments, including during the oil shocks, the Gulf War, and the dispatch of Self-Defense Forces to Iraq.
For Japan, a stable Middle East is strategically important because it allows the US to devote greater attention and resources to the Indo-Pacific, according to the ambassador. The US vision for the region is built in part on expanding the Abraham Accords, especially to include Saudi Arabia. Normalization between Israel and Saudi Arabia would carry enormous strategic significance because of Riyadh's role as Custodian of the Two Holy Mosques and could create ripple effects across the broader Muslim world.
Defense Cooperation and Regional Balance
The normalization of ties between Israel and Muslim-majority Asian nations, especially Indonesia, would also carry strategic weight, the ambassador wrote. Israel's military strength, high-tech leadership, and position as a de facto US ally mean that deeper Israeli engagement in the Indo-Pacific could affect the regional balance of power. One of the main strategic challenges in the Indo-Pacific is strengthening deterrence against China's unilateral attempts to alter the status quo, which requires broader involvement by like-minded countries.
In his 2025 address to the United Nations General Assembly, Shigeru Ishiba supported a two-state solution while also backing the expansion of the Abraham Accords. This position reflected Japan's strategic understanding of both the Middle East and the Indo-Pacific, according to the ambassador.
Israel's defense industry deserves particular attention, the ambassador wrote. Japan must strengthen its defense capabilities, including air defense, and improve deterrence against North Korea and China. Israel's defense industry, shaped by extensive combat experience, has recorded major export growth and is advancing defense cooperation with Asian countries through combat-proven systems, joint development, technology transfer, shared intellectual property, localized production, and collaborative research and development. Reports also indicate that Israeli defense products are often more cost-effective than US equivalents, while offering local production options and fewer proprietary "black box" components.
Palestinian Question in Evolving Context
Within this reconfigured Middle East, the Palestinian issue remains significant. Saudi Arabia's main stated condition for normalizing relations with Israel is the establishment of "a clear path to a two-state solution," underscoring the continuing importance of addressing the Palestinian question. At the same time, the Palestinian issue no longer occupies the same central position it once held in regional politics, according to the analysis. The rapid development of Israel and the Gulf has shifted priorities. For Gulf states, the Palestinian issue still carries domestic political resonance, but it is increasingly treated as one part of a broader national-interest agenda.
This was visible in the continued diplomatic presence of the UAE and Bahraini ambassadors in Israel even during the Gaza war. In some cases, defense cooperation with Israel to safeguard national security can take precedence over historic positions on Palestine, the ambassador wrote.
The new economic dynamics centered on Israel and the Gulf region also create major opportunities for Japan and the Indo-Pacific, according to the analysis. Israel's strengths in AI, energy, and technology, combined with the Gulf's financial power and investment capacity, create a new economic frontier. Major US technology companies, including Google, Apple, Meta, Amazon, Microsoft, and Nvidia, maintain deep engagement with Israeli human capital and technological expertise.
For Japan, deeper economic ties with Israel also mean closer connectivity with leading US corporations, the ambassador noted. The Gulf states, especially the UAE and Saudi Arabia, add another layer through their major AI investments, financial sophistication, and attractive investment climate. Israeli companies are already deepening their links with the UAE. At the same time, the UAE and Saudi Arabia are building stronger economic relations with India.
Companies such as SoftBank are already active in this space, but Japanese enterprises can do much more to connect Indo-Pacific economic dynamism with the momentum now building between Israel and the Gulf, according to the ambassador. Understanding this evolving Middle East is essential for Japan, as regional stability can help free US resources for the Indo-Pacific, the analysis concluded.
Why This Matters:
The reconfiguration of Middle Eastern alliances around strategic and economic interests raises fundamental questions about the protection of Palestinian rights and the viability of a two-state solution. While economic prosperity and security cooperation advance for some regional actors, the analysis acknowledges that the Palestinian issue retains domestic political resonance in Gulf states and remains Saudi Arabia's stated condition for normalization. The continued diplomatic presence of UAE and Bahraini ambassadors in Israel even during the Gaza war, as noted in the analysis, illustrates how national-interest calculations can override historic solidarity with Palestinians. For international observers committed to human rights and self-determination, the question remains whether this new regional architecture can accommodate meaningful progress toward Palestinian statehood, or whether the Palestinian question will continue to be subordinated to other strategic priorities. The framework's emphasis on deterrence, defense cooperation, and economic integration offers benefits to participating states, but the analysis itself notes that other regional actors continue to face economic fragility or state failure—underscoring persistent inequality in how the region's transformation distributes costs and benefits.