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 year 1992 marked political shifts in both Israel and the US, as the loan guarantee dispute deepened tensions in US-Israel relations. The Bush administration continued to tie financial aid for absorbing Soviet Jewish immigrants to a freeze on Israeli settlement construction - a condition Prime Minister Yitzhak Shamir firmly rejected. The dispute became central in both countries’ political discourse, shaping the June Israeli elections and the US presidential race in November. Shamir’s defeat by Yitzhak Rabin signaled a policy shift, as Labour leaders were more open to US cooperation on the peace process. Meanwhile, President Bush’s failure to gain substantial Jewish support contributed to his loss to Bill Clinton. This chapter explores how the loan guarantee debate reflected deeper ideological and strategic divides, and how the Bush administration tried to balance security ties with political pressure. It also examines the role of American Jewish organizations in shaping public discourse and considers the long-term effects of this turbulent period on US-Israel relations.

The Iraqi invasion of Kuwait in August 1990 reshaped US foreign policy and placed Israel in a precarious position. As the Bush administration built an international coalition against Saddam Hussein, it deliberately distanced itself from Israel to secure Arab participation in Operation Desert Shield. This led to Israeli concerns about its strategic value to the US, especially amid debates over arms sales to Saudi Arabia and exclusion from military coordination. Although Israel exercised restraint at Washington’s request, tensions emerged over intelligence sharing, arms procurement, and settlements. US efforts to sideline Israel during the Gulf conflict fuelled fears of estrangement and prompted Israeli efforts to secure military aid and reaffirm its alliance with the US. This chapter examines Israel’s role in the Gulf War’s geopolitical landscape, focusing on its strategic concerns, diplomatic responses, and evolving relationship with the Bush administration. It also explores how American outreach to Arab states reshaped Israel’s perceived standing in US foreign policy.

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 Gulf War placed Israel in a unique strategic position as Iraqi missiles targeted its cities while the US urged it not to retaliate. Saddam Hussein’s goal was to fracture the US-led coalition, but Prime Minister Yitzhak Shamir showed restraint at President Bush’s request. This chapter examines the US-Israel dynamic during the war, focusing on intelligence sharing, the deployment of Patriot missile batteries, and Israeli debates over military response. Despite US assurances to strike Iraqi launch sites, tensions persisted over arms sales to Arab states and Israel’s strategic concerns. The war also intensified political strain, particularly around US loan guarantees. While Israel sought help to absorb Soviet Jewish immigrants, the Bush administration tied financial support to a freeze on settlement expansion. These developments reflected broader shifts in US-Israel relations, where strategic alignment coexisted with policy disagreements. By analyzing these interactions, the chapter sheds light on how military threats, diplomacy, and aid negotiations shaped the relationship during and after the Gulf War.

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 early years of the George H. W. Bush administration (1989-1990) marked a complex phase in US-Israel relations, shaped by political pragmatism, ideological tensions, and shifting diplomatic priorities. Although Bush did not initially appear as supportive of Israel as some predecessors, his administration maintained strong strategic ties. Friction arose over Israeli settlements, the US-PLO dialogue, and the broader peace process. Prime Minister Yitzhak Shamir’s rigid ideology and mistrust of Bush’s team added further strain. Secretary of State James Baker and Secretary of Defense Dick Cheney played central roles, balancing diplomacy with strategic concerns. This study examines how political ideology, personal dynamics, and international pressures influenced policy decisions. It highlights the significance of settlement debates, evolving US views on the Palestinians, and the growing role of Christian Zionism in shaping American foreign policy. These early encounters set the tone for a turbulent yet enduring partnership.