This chapter examines the complex diplomacy between the United States and Israel during the administration of President George H. W. Bush and Prime Minister Yitzhak Shamir, with a particular focus on the road to the Madrid Peace Conference in 1991. It argues that US Secretary of State James Baker ultimately played a pivotal role in shaping the negotiations. Drawing on newly available archival materials from the George H. W. Bush Presidential Library, the Israel State Archives, and the American Jewish Archives, the chapter presents a detailed account of the tensions that characterized the period. It explores how emotions - alongside interests and strategy - shaped diplomatic behavior, particularly over the peace process and the request for US loan guarantees to support the absorption of Soviet Jewish immigrants in Israel. The chapter also investigates the parallel strains in US relations with American Jewish organizations. In contrast to accounts that treat this period as an aberration in the U.S.-Israel "special relationship," the chapter shows how it encapsulated the recurring frictions and deep-rooted affinities that have long defined the alliance. It also reflects on the broader historiographical and methodological implications of using newly declassified sources to reassess well-known diplomatic episodes.1

The Bush administration’s approach to the Israeli-Palestinian conflict was marked by unprecedented criticism of Israel’s settlement policies and a shift in US diplomatic tone. Secretary of State James Baker’s 1989 AIPAC speech, urging Israel to ‘lay aside … the unrealistic vision of a Greater Israel’, signaled a turning point in US-Israel relations. The speech drew a mixed reaction from American Jews, exposing growing divisions over Israel’s territorial policies. Some welcomed it as reaffirming longstanding US positions; others saw it as unfairly demanding Israeli concessions without matching Arab commitments. The administration’s stance intersected with broader geopolitical concerns, including Soviet Jewish immigration to Israel and US loan guarantees, complicating negotiations. This chapter explores the internal and external pressures shaping US policy during the late 1980s and early 1990s, focusing on Bush-era diplomacy, Israeli responses, and evolving dynamics within the American Jewish community. It highlights a pivotal moment in US-Israel relations and its impact on the peace process.

The 1991 Madrid Conference marked a turning point in US-Israel relations and the broader Middle East peace process. After the Gulf War, the Bush administration, led by Secretary of State James Baker, pushed for direct talks between Israel and its Arab neighbors. Co-sponsored by the US and the Soviet Union, the conference aimed to establish a peace framework based on UN Resolutions 242 and 338, emphasizing land for peace. Tensions emerged between the US and Prime Minister Yitzhak Shamir, especially over Israeli settlement policy and the makeup of the Palestinian delegation. The Bush administration linked US loan guarantees for absorbing Soviet Jewish immigrants to a freeze on settlement expansion, increasing pressure on Israel. The conference also exposed divisions within the American Jewish community over US policy and its implications for Israel’s future. This chapter explores the diplomatic maneuvering before Madrid, the negotiations over participation, and the conference’s impact on US-Israel relations. It places Madrid within the broader realignment of US Middle East policy under Bush and assesses its long-term legacy.

The period since the 1990s has proved, in an ironic way, the strength of Israel–US relations. In 1991, American president, George H. W. Bush, clashed with Israel, and since 1996, Prime Minister Benjamin Netanyahu had strained Israel–US relations in an unprecedented manner. In both cases, the constants that determined the course of the Israel–US relationship, religion, shared values, and history, proved to be stronger than any individual, regardless of their position. The period covered in this chapter was characterized by a close friendship and strategic partnership between the two nations. During those years, the two countries signed several memoranda of understanding which solidified the American commitment to Israel’s security and ensured its qualitative military edge, as well as expanding the cooperation on economic and cultural matters. The military-industrial cooperation as well as security cooperation between the two countries deepened. The growing Israeli attachment to American culture and values was another manifestation of the deepening relations between the two countries. The Israeli economy changed from socialist to neoliberal under the influence of American economic thinking. Neoconservatism spread across Israel’s political and intellectual elites through institutions and people, most notably Prime Minister Benjamin Netanyahu. The Israelis adopted many of the characteristics of American culture and economy, bringing their country closer to the United States in form and content. The ties between Israel and the Christian Zionist Evangelicals deepened as well. With the Evangelicals returning to the forefront of American politics since the mid-1970s, they became a major force in the support of Israel, a tendency that was especially encouraged by the right wing in Israel. Evangelical support for Israel has only increased during the 1990s and 2000s.