Israel-Iran alliance: Jerusalem's arm sales to the Islamic Republic during Iran-Iraq War

More than three decades after his death, the shadow of Ayatollah Ruhollah Khomeini is still cast into the deepest corners of Iran. The man who founded the Islamic Republic of Iran after the overthrow of Shah Mohammad Reza Pahlavi in 1979 led the country for its first decade, transforming a 1,300-year-old monarchy into a country ruled by Sharia law, the ayatollahs, and a formidable military – the Islamic Revolutionary Guard Corps.

After the Shah fled into exile, the fledgling republic turned its back on the Western-leaning outlook of its former monarch, and Khomeini oversaw the descent into a fiercely religious society, and the evolution of a personality cult that exists to this day.

“Israel viewed its security in the region as being one in which you needed to build alliances with a non-Arab state, in the periphery of the Middle East, in order to balance the immediate neighborhood of Arab states,” said Trita Parsi, founder and former president of the National Iranian American Council and author of Treacherous Alliance: The Secret Dealings of Israel, Iran, and the United States. 

“Iran was the most important peripheral state, not just because of its military might but also because it had access to oil, which Israel of course was in dire need of, since the Arab states wouldn’t sell it” to them, he told the Magazine. “From the Shah’s perspective, it was always very strategic, but it wasn’t as permanent as the Israelis thought it would be. The Israelis had this perception that the enmity with the Arabs would essentially be eternal – and the thought that Arab-Persian tensions were of the same nature and, as a result, Iran would more or less be a permanent ally.”

Most of Khomeini’s decade in power was spent beating the anti-imperialist drum, possibly being the first one who referred to the United States as the “Great Satan” and Israel as the “Little Satan.” It was also spent battling the forces of Saddam Hussein after Iraq invaded Iran in September 1980, a mere 18 months after the revolution.

The Iran-Iraq War began due to a mix of historical, political, and territorial disputes. Central to these disputes was the Shatt al-Arab waterway, a crucial economic and strategic boundary between the two nations. After the Iranian revolution, Hussein saw an opportunity to capitalize on Iran’s internal socio-political turmoil. He aimed to weaken his larger eastern neighbor and settle the territorial disputes to Iraq’s advantage. Additionally, the ideological clash between Iran’s new Shi’ite Islamic theocracy and Iraq’s secular Ba’athist regime further intensified the animosity between the two countries.

The Iran-Iraq War

HUSSEIN’S AMBITIONS to establish Iraq as the dominant regional power and prevent the spread of Iran’s revolutionary ideology, which threatened to inspire Shi’ite uprisings in Iraq, also played a crucial role. Historical Arab-Persian rivalries added to the tensions. The involvement of external powers, with both superpowers and regional allies providing varying degrees of support, further fueled the conflict. 

These factors culminated in Iraq’s invasion of Iran on September 22, 1980, starting a protracted and devastating war that lasted eight years, resulting in a significant loss of life and economic damage for both nations.

Despite the fierce anti-Western feeling that permeated Iran at this time, as the revolutionary fervor grew and grew, military help was on hand for the fledgling Islamic Republic from an unlikely source – Israel.

Clandestine Israeli sales of military equipment helped turn the tide of the war and prevent Iran from falling to Saddam’s forces, which was of huge concern to Israel at the time.

Despite the apparent ideological chasm between the Islamic Republic of Iran and the Jewish state, Israel became one of its primary suppliers of military equipment. This relationship extended beyond mere arms sales: Jerusalem also sent military instructors to Iran and, in return, received vital intelligence that proved instrumental in its own military operations. One notable instance was the Iranian intelligence that aided Israel in executing Operation Opera, the 1981 airstrike that destroyed Iraq’s Osirak nuclear reactor – a cornerstone of Iraq’s nuclear ambitions.

In 1979, “The [Iranian] revolutionaries come in, and they have a very, very hostile view of Israel, seeing it as an imperialist outpost to American imperialism, as well as [seeing] an ideological religious dimension to it,” Parsi told the Magazine. “But the actual geopolitical circumstances that had given birth to the relationship, which was the common threat from the Arab states and the Soviet Union, had not changed. In fact, from the Iranians’ perspective, it had [become] amplified because Iran was now at odds with the US – even though its military was entirely dependent on US spare parts.

“Israel quickly found out that it had this trump card with Iran because it was one of the few states to have access to American spare parts and was willing to sell them to Iran, in violation of US sanctions. The revolutionaries viewed Israel as the lesser of [two] evils in the context of the war with Saddam.”

THE MOTIVATIONS behind Israel’s support for Iran were multifaceted. Strategically, Israel sought to counterbalance Iraq, which was considered a significant regional threat. By strengthening Tehran, Jerusalem aimed to create a bulwark against Iraqi power and influence. Furthermore, Israel hoped to re-establish a foothold in Iran, a connection that had been severed with the 1979 overthrow of the Shah, one of its key allies.

One important byproduct of this clandestine relationship was the facilitation of Jewish emigration from Iran and the protection of the Jews who remained there. The covert support helped ensure the safe passage of Persian Jews to Israel and the United States, securing their freedom from potential persecution.

“What happened back then was that the Israelis played the military card, reaching out to high-ranking people in the Iranian military who they, of course, had contact with during the Shah’s reign,” Parsi explained. “They tried to find ways to sell weapons and show strategic utility with the new regime, [but] it wasn’t particularly successful. The point was, though, that the Israelis were trying, even before the Iraq war started.

“Israel was trying to show that in a world in which the Iranians were turning against the United States – which meant they had bad relations with both superpowers [the US and the Soviet Union] – Israel could still help Iran,” he said. “It was trying to signal that message to the Iranians. I don’t think it was particularly successful at the time, and I don’t think the Iranians were really focusing on arms that much at that moment. But it is what later brought about the Iran Contra scandal.”

The sales

Despite the secrecy, the logistics of these operations were extensive and complex. The first major arms deal occurred in early 1980, when Israel sold a large number of F-4 Phantom fighter jet tires to Iran. This initial transaction was negotiated through back channels, as the Iranian government sought military equipment it could no longer obtain from the US due to sanctions imposed after the 1979 hostage crisis, when Iranian students seized the American embassy and detained more than 50 Americans. The net profit from these sales contributed to a significant slush fund within the Israeli intelligence community, which grew over the years.

The onset of the war saw Iraq launching a full-scale invasion of Iran. Under immense pressure, Tehran desperately needed military supplies, particularly American and British-made equipment, which formed the backbone of its arsenal from the Shah’s era. 

In response, Israel increased its support. Following the first mission in early 1980, a second one took place in October, resulting in additional arms deals. On October 24, 1980, shipments of Scorpion tank parts and 250 F-4 jet tires were dispatched to Iran. Concurrently, other military supplies stored in Europe were clandestinely shipped to Iranian ports like Chabahar, Bandar Abbas, and Bushehr. These shipments included spare parts for F-4 jets, helicopters, and missile systems.

AND HOW did Iran’s new leader – the ayatollah who lived a simple life on a simple diet on garlic, yogurt, and onions – view his dealings with the “Little Satan”?

“I interviewed one of Khomeini’s close advisers in regard to the arms sales that Israel provided,” Parsi recounted. “One of the generals had approached Khomeini – because of the arms embargo, it was very difficult to get hold of weapons – and he declared to Khomeini that they had actually managed to secure a significant arms shipment. But there was just one problem – the sellers were Israeli. Khomeini was quiet for a couple of seconds, and then he said, ‘If you find these weapons, do you have to ask who the seller is?’ and the general said no. And Khomeini said, ‘Well, problem solved.’”

Jimmy Carter was the American president at the time. A New York Times article from August 1981 discussing the October transactions stated: “Carter officials and diplomatic sources familiar with the Israeli-American discussions the previous year [1980] said that the Israelis yielded to American pressure to not continue their military relationship with Iran until the hostages were freed.

“Diplomatic sources, in discussing Israel’s motivations, said that prime minister Menachem Begin was willing to provide spare parts to Iran because of an overwhelming Israeli desire not to see Iraq win the war that began last September,” the Times article said.

“The other reason for Mr. Begin’s actions, despite Iran’s fierce anti-Israeli policy, is his concern about the 60,000 Jews living in Iran,” it said. “The Israelis fear that they could be subject to repression at any time and that contact between Israel and Iran helps the Jews in Iran.”

Nachman Shai, the spokesman for the Israeli embassy in the US at the time, told the Times: “Our position is that Israel does not provide information on purchases of sales of weapons.”

THE US position during the early years of the Khomeini regime was largely influenced by the 1979 hostage crisis and Carter’s presidency. On November 4, 1979, Iranian students seized the American embassy and detained more than 50 Americans as hostages, many of them diplomats. They were held for 14 and a half months (444 days) until January 20, 1981. The Iran hostage crisis undermined Carter’s ability to conduct foreign policy and was one of the factors contributing to his election defeat to Ronald Reagan in November 1980.

Upon discovering the Israel-Iranian transactions, the Carter administration exerted pressure on Israel to halt future sales while the United States was negotiating for the release of the hostages. However, with Reagan’s ascendancy to the presidency in 1981, the dynamic shifted. Israel sought and received covert consent to continue supplying Iran with American-made military equipment despite the Reagan administration’s public opposition to such sales.

The Carter administration “opposed the sales very strongly: “I think at one point, Carter publicly warned Israel about it,” Parsi stated. “Carter imposed an arms embargo, including on spare parts. What happened was that Reagan came in and kind of turned a blind eye to what the Israelis were doing. 

“In 1982, [then-Israeli defense minister] Ariel Sharon on NBC News openly stated that Israel was providing weapons or selling weapons to Iran because it was important to try to bring Iran back into the West[ern sphere of influence], so openly admitting it on American TV kind of indicated the Israeli leaders’ knowing that they were violating the embargo while knowing that there wouldn’t be much of the consequences from the Reagan administration,” the National Iranian American Council founder said.

“What the Americans were driven by was anger because of the hostage crisis. Iran had humiliated the United States and had turned it into an enemy.”

IN THE first year of large-scale arms sales in 1981, Israel sold $75 million worth of arms under Operation Seashell, including anti-tank guns and shells. This operation involved using Cyprus as a transit point, with Argentine airline Transporte Aéreo Rioplatense initially transporting the arms by air – and later, following a mid-air collision incident, by ship. Additionally, Yaakov Nimrodi, Israel’s military attaché in Tehran from 1955 to 1979, signed a $136 million arms deal with Iran’s Ministry of National Defense that year, which included advanced weaponry such as Lance and Hawk missiles.

Maj.-Gen. Avraham Tamir, who worked in the Israeli Defense Ministry, told The New York Times in 1991 that “Every month, we gave a list of American weapons and American spare parts we’d like to sell to Iran.

“In the years 1981 and 1982, weapons with US components were sold to Iran based on an understanding with [then-US secretary of state Alexander] Haig,” he said: “Then it was stopped.”

Israeli intelligence established a covert operation in New York to facilitate these transactions. However, when it became apparent that Israel was also selling sophisticated American military equipment without explicit consent, the operation had to be relocated to London by 1983.

A New York Times article from March 1982 stated that “According to documents – telex messages, contracts and bills of lading – $100 million to $200 million in arms, spare parts, and ammunition were delivered to Iran from Western Europe in the last 18 months. The intelligence sources said the documents indicated that about half of this was being supplied or arranged by Israel, and the rest by freelance arms merchants, some of whom may also have connections with Israeli intelligence.”

The article further mentioned that “Non-American sources supplied the initial information about the flow of arms from Israel to Iran. It appears that their principal motive was to discredit the government of Ayatollah Ruhollah Khomeini by showing that his war effort against Iraq was being helped by Israel. Along with the United States, Israel is a prime target of Iranian antagonism.”

BY 1982, Israel’s sales to Iran included sophisticated weapons systems, prompting complaints from international observers. West German chancellor Helmut Kohl raised concerns about Israeli arms sales worth $500 million to Iran. Despite the official stance of the Reagan administration, which rescinded its consent for arms sales following evidence of violations, Jerusalem continued to sell arms to Tehran. These sales were facilitated through a global network managed from London, involving private arms dealers and shell companies.

Arms were also supplied to Iran by Libya, Syria, and North Korea, and were of Soviet origin. The US hoped to counter the Russian influence in the region as the Cold War played out in the early years of the Reagan administration.

Throughout the early 1980s, Israel’s arms sales to Iran were substantial. Estimates from the Jaffe Institute for Strategic Studies at Tel Aviv University suggested that Israel sold around $500 million worth of arms annually, including aircraft spare parts, artillery, and ammunition. These sales were predominantly financed by Iranian oil. Arms dealer Ahmad Haidari claimed that a significant portion of Iran’s weaponry early in the war came from Israel, which enabled the Iranian air force to conduct sorties and strategic strikes against Iraq.

Despite the newspaper articles, media coverage, and TV appearances by Israeli officials, the dealings between the Jewish state and Iran were seemingly kept largely under wraps in the Islamic Republic.

“It was really largely hushed up,” Parsi told the Magazine. “One of the people who apparently had leaked it was executed. And, you know, the pragmatism of having to do whatever they needed to do to be able to win the war was there in the background, but it wasn’t really acknowledged that this actually had happened. There wasn’t much of a conversation publicly, and they controlled the media and ways in which they could just essentially shut them down.”

The Iran Contra Affair

From 1985 to 1986, Israel’s role in the Iran-Contra Affair highlighted the complexity of its involvement with Iran. High-level discussions between Israeli and Iranian representatives sought to open an arms channel with the United States.

The affair was a significant political scandal during the Reagan administration. It involved the secret sale of arms to Iran, despite the arms embargo, with the aim of securing the release of American hostages held by Hezbollah in Lebanon. Proceeds from these sales were then illegally diverted to support the Contra rebels in Nicaragua, who were fighting the Left-wing socialist Sandinista government (which also came to power in 1979, some six months after the Iranian Revolution). This was in direct violation of the Boland Amendment, which prohibited US aid to the Contras.

The scandal came to light in November 1986, leading to extensive media coverage and congressional hearings. The hearings revealed the depth of the administration’s involvement in the covert operations and resulted in several indictments and convictions, although many were later overturned or those guilty were pardoned.

Just as the Iran hostage crisis hurt the Carter administration, the Iran-Contra Affair had significant political repercussions for the Reagan administration, damaging its reputation and raising questions about presidential oversight and the conduct of foreign policy.

Even as the Iran-Contra scandal unfolded, Israeli arms shipments to Tehran continued, including a high-profile case in 1986 where individuals with ties to Israel were arrested for attempting to sell $2.6 billion worth of arms to the Islamic Republic. Despite these controversies, Israel’s support for Iran during the Iran-Iraq War remained a critical and complex aspect of its foreign policy, driven by strategic, economic, and humanitarian considerations.

“There was a very fierce fear [on the Israeli side] that as soon as US-Iran relations would be patched up, the Iranians would cut them out and deal directly with the US,” Parsi explained. “It became clear to them that their only utility was to be able to bring relations to the United States. This, of course, was the beginning of Israeli opposition to any US-Iranian relations.”

The Iran-Contra Affair led to changes in how covert operations were conducted and increased oversight mechanisms. The scandal remains a critical example of the complexities and potential abuses in US foreign policy.

The end of the war

The Iran-Iraq War dominated much of Khomeini’s decade in power. It was a bloody conflict, marked by the use of chemical weapons, other weapons of mass destruction, the use of child soldiers, and war crimes. About half a million people are thought to have died in the conflict, and relations between Iran and Iraq did not really warm until the fall of Saddam Hussein in 2003, although the US presence in the region was not welcomed by the Islamic Republic. 

Khomeini died in 1989, but his successor, Ayatollah Ali Khamenei, continued his policy of subverting the Jewish state in support of the Palestinians. Rhetoric from Iran regularly states how Israel should be “wiped off the map.”

“In 1989, when Khomeini died, there were comments in Israel that this may be an opportunity for the Israelis and the Iranians to re-establish a relationship,” Parsi said. “In the Israeli mindset, the belief was that Iran was a critical state, and if we could just have relations, it would be much better for Israel’s geopolitical situation – which made sense at the time, as Saddam Hussein was still very powerful. That was a different geopolitical reality than today.

“The Israeli position changed dramatically in 1991-1992 when Saddam was defeated [in the Gulf War], the Soviet Union collapsed, and the geopolitical factors that had pushed Israel and Iran together throughout all those years had suddenly evaporated,” Parsi said. “Now the effort has become to make peace with the surrounding Arab states and resolve the Israeli-Palestinian issue.”

AS THE dust settled on the Iran-Iraq War, the arms sales between Israel and Iran highlighted a pragmatic but ultimately unsuccessful attempt at diplomacy. Today, the legacy of these secret dealings lingers, with the two nations on the brink of open conflict. The missed opportunity for a more stable relationship continues to cast a shadow over the region’s future.

Instead, Iran found itself going down the path of Islamism that it continues to spread and fund to this day – coming to a head just a few weeks ago on April 13, when Tehran launched a direct attack on the Jewish state. It launched around 170 drones, over 30 cruise missiles, and more than 120 ballistic missiles toward Israel in response to the alleged Israeli assassination of an Iranian general in Damascus.

The Israeli sales of weapons to the Islamic Republic during the Iran-Iraq War could be viewed in hindsight as Iran doing whatever it must do to secure victory and Israeli attempts to broker diplomatic relations with a newfound enemy. It should also be viewed, perhaps, as a missed opportunity because now, some 30 years later, the two countries are closer to war than they have ever been.