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Azerbaijan and Israel have engaged in intense cooperation since 1992. Azerbaijan is one of the few majority Muslim countries besides Turkey, Egypt, Jordan and the former Soviet republics to develop bilateral strategic and economic relations with Israel. This relationship is relatively discreet: According to a 2009 U.S. diplomatic memo, made public through Wikileaks, Azeri president Ilham Aliyev once compared his country's relationship with Israel to an iceberg: "Nine-tenths of it is below the surface."
On October 18, 1991, the declaration of the Parliament of Azerbaijan restored the country's independence, and, in November 1991, Turkey became the first state to formally recognize it. On December 25, 1991, Israel formally recognized the independence of Azerbaijan, becoming one of the first states to do so, and established diplomatic relations with Azerbaijan on April 7, 1992.
Azerbaijan was visited by David Harris, executive director of the American Jewish Committee, in July 2010, shortly after the visit of Hillary Clinton to Baku. During the reception, Harris said Azerbaijan presented cultural, strategic and political importance.
Azerbaijan is home to some 12,000 Mountain Jews, residing primarily in Baku and Qırmızı Qəsəbə settlement in the Quba district of Azerbaijan. Mountain Jews have been living in Azerbaijan for close to 1500 years; they are the descendants of Persian Jews. During the conquest by the Islamic Caliphate, Arabs settled an allied Jewish tribe in the neighborhoods of Baku; in 1730 Jews were officially allowed to put down roots and own property in Quba. There are also nearly 5000 Ashkenazi Jews living mostly in Baku. The first Jewish Sochnut school in the Soviet Union was opened in 1982 in Baku, then capital of Azerbaijan SSR.
Israeli–Azerbaijani ties have been expanding since the very early 1990s. The strategic relationship included cooperation in trade and security matters, cultural and educational exchanges, etc. Relations entered a new phase in August 1997 during the visit of then the Israeli prime minister Benjamin Netanyahu to Baku. Since then Israel has been developing closer ties with Azerbaijan and have helped modernize the Armed Forces of Azerbaijan. Israeli military is said to have been a major provider of battlefield aviation, artillery, antitank, and anti-infantry weaponry to Azerbaijan.
In 2009, Israeli President Shimon Peres made a visit to Azerbaijan where military relations were expanded further, with the Israeli company Aeronautics Defense Systems Ltd announcing it was going to build a factory in Baku.
In 2010, Azerbaijani President Ilham Aliyev issued a decree banning the issue of visas in the country's international airports; foreigners henceforth had to apply for visas at the nearest Azerbaijani consulate. Israel and Turkey were the only two countries whose citizens were unaffected by the new law.
In 2016, current Defence Minister of Israel Avigdor Lieberman supported position of Azerbaijan in the 2016 Armenian–Azerbaijani clashes by calling it "absolutely justified". Furthermore, Mr.Lieberman held Armenia responsible for provoking the conflict in April 2016.
Following an October 2001 meeting with Israeli ambassador Eitan Naeh, Azerbaijan's then president Heydar Aliyev declared that the two countries had identical positions in the fight against international terrorism. Israeli intelligence helps collect human intelligence about what they view as extremist organizations in the region. One of the groups, Hizb ut-Tahrir, which seeks the annihilation of the state of Israel, threatens both Jerusalem and Baku. Hizb ut-Tahrir is suspected of having several hundred members in Azerbaijan, and several members of it were arrested and prosecuted by Azerbaijani authorities.
In 2008, a plot was foiled to bomb the Israeli Embassy in Baku, which is located in a high-rise building along with the Thai and Japanese embassies. Two Hezbollah militants went on trial for the attempt in May 2009. Local police narrowly averted the potential disaster, which involved placing three or four car bombs around the high-rise complex to carry out the attack. Groups planned the bombing in retaliation for the 2008 assassination in Damascus, Syria of Hezbollah's second in command Imad Mughniyah, which the Lebanese group blamed on Israel. News reports suggested Iran was involved in the plan as well.
In 2012, Israel and Azerbaijan signed an agreement according to which state-run Israel Aerospace Industries would sell $1.6 billion in drones and anti-aircraft and missile defense systems to Azerbaijan.
Some analysts consider that both Israel and Azerbaijan see Iran as an existential threat. Azerbaijan fears Iranian Islamist influence, but Iran fears Azerbaijan, too, as up to 18 million Iranians are ethnic Azeris. On the other hand, Azerbaijan has close links with Turkey, and the post-2006 worsening of Israel-Turkey relations may have repercussions on Azerbaijan's relations with Israel.
In February 2012, Iran rebuked Azerbaijan for allegedly aiding anti-Iranian activities by Israel's Mossad intelligence agency. A few weeks later Azerbaijan arrested 22 people in a suspected Iranian plot against Israeli and US targets in Azerbaijan. In March 2012, the magazine Foreign Policy reported that the Israeli Air Force may be preparing to use the Sitalchay Military Airbase, located 500 km (340 miles) from the Iranian border, for air strikes against the nuclear program of Iran.
Azerbaijan has sought closer relations with the West, including Israel. There are, however, several inhibiting factors to the closeness of this alliance. One is the great influence of Russia. Another is Azerbaijan's difficulty to withstand pressure from the Muslim world. This pressure is the reason Azerbaijan has yet to open an embassy in Israel and why it has voted against Israel's views in international forums.
Economic cooperation between Israel and Azerbaijan has been growing significantly. As Azerbaijan deregulated its industries and liberalized economy in early 1990s, Israeli companies penetrated Azerbaijani markets. Many companies have invested in service industry. One example is Bezeq, a major Israeli telecommunication provider. Through a trade contract bid in 1994, Bezeq bought a large share of the telephone operating system. Today it installs phone lines and operates regional services throughout much of the country. Another company, Bakcell, was started as a joint venture between the Ministry of Communication of Azerbaijan and GTIB (Israel) in early 1994 as the first cellular telephone operator in the country. Dozens of Israeli companies are active in the Azerbaijani energy sector. For instance, Modcon Systems Ltd., an Israel-based supplier of high technology to the oil and gas industries, opened a branch in Azerbaijan.
Between 2000 and 2005, Israel has risen from being Azerbaijan's tenth largest trading partner to its fifth. According to U.N. statistics, between 1997 and 2004, exports from Azerbaijan to Israel increased from barely over US$2 million to $323 million, fueled in recent years by the high price of oil. As of 2013, 40 percent of oil to Israel is exported from Baku, which makes Azerbaijan Israel's largest oil supplier.
In a 2007 speech, the Israeli ambassador to Azerbaijan, Arthur Lenk, spoke of a continuous trade between Azerbaijan and Israel in the energy sector. He noted that until the inauguration of the Baku-Tbilisi-Ceyhan pipeline in 2006, Israel was a key consumer of Azerbaijani oil exports, and that the proximity of Ceyhan to Israel offers excellent new opportunities for greater Israeli participation in this sector of the economy, thus creating additional areas for collaboration and mutual benefit. He underlined that through the Trans-Israel pipeline between Ashkelon and Eilat, Israel could be a strategic partner for marketing Caspian oil to Asia. Israeli efforts in developing alternative energy resources, especially solar energy, were also mentioned. Israel additionally seeks possibilities of importing gas from the Caspian Sea region.
Cooperation against Iran
On March 29, 2012, officials said that Israel was granted access to air bases in Azerbaijan through a "series of quiet political and military understandings." These airbases could potentially be used in a strike against Iran over its nuclear program and other tensions with Iran, and would be allowed by Azerbaijan.
On September 30, 2012, it was reported that Azerbaijan and Israel jointly examined the use of Azeri air bases and spy drones to help Israeli jets perform a long-range strike on Iran. This would help Israel in regards to issues with refueling, reconnaissance, and rescuing crews, and could make an attack more feasible. The plan apparently involves using an Israeli tanker aircraft painted in the colors of a third country airline company that would land and refuel in Azerbaijan and then refuel the Israeli strike aircraft.
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