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In this section, we publish the weekly analysis of the major events taking place in the Caucasus and beyond. The Caucasus Update is written by our Senior Editor Alexander Jackson. Click here to subscribe.

Israel’s January war with the Palestinian militant organisation Hamas created a dilemma for governments around the world – how to reconcile public opinion, which by and large opposed Israel’s actions, with their own distaste for Hamas and their ties with the Jewish state. Nowhere was this dilemma sharper than in those Muslim states which have a relatively good relationship with Israel. Turkey’s Prime Minister Recep Tayyip Erdogan vented his anger at the Davos summit by storming out of a heated debate with the Israeli president Shimon Peres. Commentators are divided over whether the row will have any lasting impact on Turkish-Israeli ties, which are generally very good, but the incident certainly won him support at home.

Azerbaijan’s President Ilham Aliyev has avoided similar drama, but is faced with the same problem. Azerbaijan is almost unique in the Muslim world (with the exception of Turkey) for the strength and depth of its cooperation with Israel. The long-standing Jewish minority in Azerbaijan, the fundamentally secular nature of Azerbaijani society and the Azerbaijani state, and shared strategic interests provide a basis for a remarkably warm relationship.

‘Shared strategic interests’ essentially means the containment of Iran, and to a lesser extent Russia. Neither Tel Aviv nor Baku has any interest in seeing the spread of Tehran’s particular brand of Islamic theocracy, no matter how faded the ‘revolutionary’ aspect of it has become in the 30 years since the fall of the Shah. The extent of Israel’s antagonistic relationship with Iran is well documented, and it is keen to see Azerbaijan from following a similar course to its southern neighbour for both military and geopolitical reasons. Militarily, Tel Aviv has (along with Washington) repeatedly pressured Baku for basing rights in the event of a military strike on Iran’s nuclear facilities, although Azerbaijan has diplomatically refused. According to a 2005 report by a US think-tank, Israel might have also set up listening posts on the Azerbaijani-Iranian border, and trains Azerbaijani intelligence agencies and security forces. Geopolitically, Israel has a vested interest in maintaining the pro-Western Turkey-Georgia-Azerbaijan axis in Eurasia, all of which are stridently opposed to Islamist movements in their respective neighbourhoods and all of which constitute the East-West energy corridor to Europe which Israel may one day attempt to join. In economic terms, Israel is Azerbaijan’s sixth-largest trading partner and has allegedly been heavily involved in Azerbaijan’s oil and gas sectors.

Israel’s support for Azerbaijan was evident as early as 1992, when it became one of the first to recognise the new state. Bilateral political and economic relations developed steadily since then. There is an intensive military cooperation between the two countries. An interesting struggle has also emerged in Washington between the Armenian lobby, attempting to persuade the US Congress to recognise the alleged genocide in 1915 by the Ottoman Turks, and the Jewish lobby, which continues to influence the considerations of US policymakers. As part of their strategic alliance with Turkey and Azerbaijan, Israel and the Jewish lobby have refused to support the genocide resolution and have assisted Turkish efforts to block it. This careful quid pro quo appears to be unravelling in the wake of Ankara’s criticism of the Gaza war. In this context, Azerbaijan may have a critical role to play as a peacemaker between its two allies.

Alongside excellent relations with Israel, Azerbaijan has also been trying to maintain warm relations with the Arab world. And it is mainly due to this fact that Azerbaijan is refusing to open an embassy in Jerusalem in spite of constant Israeli calls.

Nevertheless, Baku’s support of Israel (and the West) has come at a cost, mainly at home. Although the level of radical Islam in Azerbaijan is hotly disputed, the government acknowledges that there are militant organisations operating there, including Hizb-ut-Tahrir and Hezbollah, who make no secret of their loathing of Israel or the West. Indeed, the Times of London recently reported that in 2008 Azerbaijani Intelligence foiled a Hezbollah plot to blow up the Israeli embassy in Azerbaijan, in revenge for the assassination of Imad Mughniyeh, the organisation’s military chief. Late last year rumours surfaced that the North Caucasian Islamic resistance was attempting to establish a branch in Azerbaijan, and was responsible for a mysterious bomb attack on a Baku mosque in August 2008. And in 2007 the Azerbaijani security services had foiled a major attack on Western embassies and oil companies by army deserters.

During  the Gaza war attempts were made to protest outside the Israeli embassy in Baku, although the demonstrations were blocked by the authorities. Of far more concern were the series of angry protests held in the religiously conservative village of Nardaran near Baku, during which death threats were made against an MP, Sabir Rustamkhanli, who suggested during an interview with an Iranian TV station that Hamas was partly to blame for the conflict. The protesters also demanded that the Azerbaijani government cut all ties with Israel. This is not the first time that Nardaran, which is supposed to have strong connections to Iran, has been a source of concern for the authorities: in 2002 and again in 2006 there were angry demonstrations against perceived corruption and a lack of services. Although it would be exaggerating to portray Nardaran as a hotbed of radical Islam, the village is inevitably the focal point of religious protests and could become a significant anti-government location if relations between the authorities and the Islamic community deteriorate.

The Azerbaijani government must therefore tread carefully. Its close relationship with Israel and America will be viewed with great hostility by supporters of the Palestinian cause and those who feel that the government is already ‘selling out’ to the West by allowing Western companies to invest so heavily in the country’s energy riches. Deepening ties with Israel, or further Israeli actions against Muslim states, will provoke religious anger on the streets and increase the appeal of parties such as the Islamic Party of Azerbaijan, which demands an Iranian-style Islamic state as the only answer to Azerbaijan’s problems. But giving up such a productive and lucrative relationship with Tel Aviv is not an option, for economic as well as strategic reasons. For now this painful dilemma can be avoided or fudged. But there is no doubt that what Baku fears most is an Israeli attack on Iran. This would be a serious test on the country’s balancing act, and would raise the spectre of further radicalism inside Azerbaijan.

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