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Ron Dermer, Israel’s influential Minister of Strategic Affairs and one of Prime Minister Benjamin Netanyahu’s closest confidants, has resigned, Israeli media reported on Tuesday. The departure marks a major reshuffling within Israel’s inner circle at a time when the government faces growing diplomatic and economic pressures abroad.
Dermer, a former Israeli ambassador to the United States and long regarded as Netanyahu’s most trusted envoy to Washington, has been instrumental in shaping Israel’s foreign policy toward both the U.S. and the broader Middle East. His resignation — though not yet officially confirmed by the Prime Minister’s Office — comes amid a period of heightened strain in Israel’s relations with key partners, particularly as regional tensions remain high and global investors weigh political stability in Jerusalem.
The Diplomatic Architect Steps Away
Dermer has long been known as the “architect” of Israel’s strategic diplomacy under Netanyahu. A Miami-born economist by training, he played a central role in negotiating the 2020 Abraham Accords, which normalized relations between Israel and several Arab states, including the United Arab Emirates and Bahrain.
In his current role, Dermer oversaw Israel’s strategic coordination on defense, technology partnerships, and energy cooperation — sectors increasingly intertwined with global financial markets. His departure could unsettle ongoing talks with U.S. and Gulf-based firms that had been exploring joint energy and cybersecurity investments through Israel’s Ministry of Strategic Affairs.
According to Israeli business daily Globes, Dermer’s resignation followed weeks of policy disagreements within Netanyahu’s coalition over economic priorities and defense coordination. Analysts say his exit may complicate foreign investment discussions and delay pending trade and technology agreements.
Markets and Diplomacy Intertwined
Dermer’s influence extended far beyond traditional diplomacy. As Israel’s ambassador to Washington from 2013 to 2021, he forged ties with U.S. corporate and political leaders, helping position Israel as a global innovation hub. He was also instrumental in expanding bilateral cooperation on semiconductors, water technology, and renewable energy — sectors that underpin Israel’s $500-billion economy.
“Dermer’s strength was that he understood both Washington’s political pulse and Wall Street’s financial logic,” said Natan Sachs, director of the Center for Middle East Policy at the Brookings Institution. “He viewed diplomacy as an investment mechanism, not just foreign policy.”
His absence could leave a gap in Israel’s strategic posture, particularly at a time when global investors are watching the country’s technology sector — once a symbol of resilience — with growing caution. A recent Bank of Israel report noted a slowdown in foreign venture capital inflows, citing geopolitical uncertainty and fiscal policy shifts.
Policy Continuity in Question
The Ministry of Strategic Affairs, revived in 2022 to manage Israel’s long-term defense and international engagement strategy, has been pivotal in coordinating responses to economic boycotts and in strengthening regional energy corridors linking Israel, Cyprus, and Greece.
“Dermer’s resignation raises questions about continuity,” said Yael Sheinfeld, a Tel Aviv–based political analyst. “He was the bridge between diplomacy, technology, and security — the three pillars of Israel’s strategic planning. Without him, it’s unclear whether that integrated approach will hold.”
Netanyahu’s office has not named a successor. Several coalition figures — including Foreign Minister Israel Katz and Energy Minister Eli Cohen — are reportedly being considered to absorb parts of Dermer’s portfolio.
International Ramifications
Dermer’s exit also arrives amid renewed friction with the Biden administration over settlement policy, regional defense coordination, and Israel’s handling of relations with Gulf states. U.S. officials privately viewed Dermer as a stabilizing interlocutor who could temper Netanyahu’s more hardline impulses.
“He was trusted in Washington,” said an unnamed former U.S. diplomat who worked with Dermer during the Abraham Accords negotiations. “He could speak the language of American policymakers while maintaining Netanyahu’s confidence — a rare combination.”
If confirmed, his resignation could signal a recalibration of Israel’s strategic direction — one that prioritizes domestic coalition management over international outreach. For Israel’s financial community, that could mean a period of uncertainty as policy consistency becomes harder to guarantee.
Despite the immediate political reverberations, markets remained steady on Tuesday. The Tel Aviv Stock Exchange’s benchmark TA-125 index closed marginally higher, reflecting investor expectations that economic fundamentals will remain intact in the short term.
Still, Dermer’s departure underscores the delicate balance Israel must maintain between diplomacy and economic ambition. As one of the government’s most internationally connected figures, his absence could reshape not just Israel’s political map, but its standing in the global marketplace.
