Persian Entanglements: How Israel and Iran went from covert allies to existential enemies

In the final part of this series, we trace the forgotten Cold War alliance between Iran, Israel, and the U.S. and their lasting political fallout.

Israel and its Discontents - Part 3

A forgotten Cold War triangle between the Mossad, the SAVAK and the CIA offers uncanny echoes in today’s missile strikes and nuclear espionage.

While unthinkable today, there was a time when Iran’s generals toasted Israeli tacticians over Cognac and caviar in Tehran’s plush north-side villas. In the 1970s, the one-eyed Israeli Warhawk Moshe Dayan was venerated in Iranian military circles, and the air in the capital was thick with geopolitical calculation. Long before the chants of “Death to Israel,” Tehran was quietly colluding with Tel Aviv in a covert alliance that would reshape the region.

Before the 1979 Islamic Revolution, during the heyday of the Shah, a peculiar triangle of Israel’s Mossad, the American CIA, and SAVAK - Iran’s dreaded internal security service – had formed a clandestine alliance designed to weaponize Iran into a Cold War bulwark against Arab nationalism, Soviet influence and the rise of leftist revolution across the Middle East.

The deal was as audacious as it was secretive and ambitious. Israel, the region’s only nuclear-capable state, would share missile technology with Iran while the United States would look the other way, so long as the Soviets were kept in check.

This triangulation became known as the ‘Peripheral Alliance Strategy,’ or ‘Project Klil.’ It yoked together non-Arab states - Iran, Turkey and Ethiopia with Israel in a broad counter-Arab intelligence and military network. As Mossad’s founding chief Reuven Shiloah reportedly told President Dwight Eisenhower in 1958, “This high dam will stop the red tide.”

At the heart of this bizarre brotherhood was a plan that bordered on the fantastical: Iranian missiles powered by Israeli know-how and petrodollars. As Israeli investigative journalist Ronen Bergman recounts in his thrilling ‘The Secret War With Iran’ (2007), Mossad operative Reuven Merhav negotiated with SAVAK’s Hassan Toufanian under the codename Operation Tzor.

Israeli Defence Minister EzerWeizman offered the Shah ‘Jericho’ missiles, originally designed to carry nuclear payloads and the blueprint for Israel’s Lavi fighter jets. Iran would host the test sites while Israel would gain strategic depth and funding. It was, by then, the largest Israeli military-industrial deal ever undertaken with billions of petrodollars in play.

Yet another initiative known as Project Flower, began in 1977. It aimed to develop a surface-to-surface missile with a range of 500km - enough to hit targets from Riyadh to the Iraqi capital of Baghdad – Iran’s sworn adversary in the region. Israel Military Industries would design the hardware while Iran would build the production lines. In the short term, the project promised a deterrent. In the long run, it planted the seeds of a technological lineage that would haunt both nations.

As Iranian-Swedish academic Trita Parsi notes in his ‘Treacherous Alliance’ (2008), this Israeli-Iranian courtship was not ideological but coldly strategic. Iran, ringed by hostile Arab regimes and nervous about Soviet proximity, saw in Israel a useful partner. Israel, threatened by Arab military coalitions, saw in Iran a vital flank. What emerged was a labyrinth of military cooperation, espionage and trade, rooted in pragmatism and wrapped in secrecy with more than a fair amount of skullduggery.

The Shah’s rationale was also increasingly pessimistic about American support. With Jimmy Carter in the White House preaching human rights and rethinking support for autocrats, the Iranian monarch looked elsewhere. Israel, unconstrained by congressional hearings or moral hesitations, became a dependable partner, an ‘honourable schoolboy.’

Between 1953 and 1979, Iran had sold most of its oil to Israel and, in turn, became a major buyer of Israeli goods which ranged from tyres to dentures, as per declassified Israeli state archives.

And then came 1979. Ayatollah Khomeini’s revolution toppled the Shah. SAVAK agents were executed while Mossad networks were dismantled overnight. The missiles, blueprints and cooperative legacies vanished into sealed archives. The Islamic Republic, now vocally committed to the destruction of Israel, erased all trace of its courtship. But memory is not so easily scrubbed.

In November 1979, when Iranian students stormed the U.S. embassy in Tehran, they found rooms filled with shredded CIA documents. Iran’s new rulers then pulled off a miracle. A group of 250 devout women, known as the ‘Puzzle Committee,’ set about reconstructing the shredded papers by hand. By the end of their labours, they had assembled a treasure trove of espionage secrets detailing clandestine dealings between the Mossad, the CIA and the SAVAK.

As Bergman details in his book, this effort led to the publication of ‘Asnad-e Laneh-ye Jasusi-e Amrika’ (Documents from the U.S. Espionage Den) which ran into 80 volumes. Among the revelations were surveillance logs of Khomeini’s exile, the CIA’s recruitment techniques, and blueprints for crushing leftist movements.

If that scene seemed cinematic, it would find its mirror image decades later when Iran and Israel would be locked (as they are now) in a death grapple.

In 2018, Israeli Mossad agents, in yet another of their breathtakingly audacious operations, raided a Tehran warehouse, hauling out 50,000 pages and 163 discs from Iran’s nuclear archive. The vault was breached in under seven hours using custom torches and vault-crackers. The mission, chronicled in the 2023 book ‘Target Tehran’ by Yonah Bob and IlanEvyata, exposed the AMAD project - the covert Iranian programme for nuclear weapons development which was suspected by Israel to have continued long after Tehran had promised peaceful intent. (A photo showing the presence of this book in Netanyahu’s underground war room is now doing the rounds)

Among the files retrieved were diagrams and missile plans hauntingly similar to those from Project Flower.

In a supreme irony of history, what Israel had helped Iran build in the 1970s, it was now working to dismantle by cyber sabotage, diplomatic coercion and finally, direct military strikes in form of Operation Rising Lion.

This strange symmetry came full circle on June 22 after the U.S. B-2 bombers flattened key Iranian nuclear sites in Fordow, Natanz and Isfahan using GBU-57 bunker-buster bombs. The intelligence for these missions had, in part, originated from Mossad’s 2018 haul.

The entanglements between the clandestine services of these three countries run still deeper. Israeli intermediaries were central to brokering the initial arms deals between the U.S. and Iran during the infamous Iran-Contra affair of 1985-86, which involved a secret sale of arms to Iran, despite a US embargo, in exchange for the release of American hostages and the diversion of proceeds to fund the Contra rebels in Nicaragua.

In 1985, Manucher Ghorbanifar, an Iranian arms dealer and former SAVAK agent had approached Israeli officials with a proposal that in exchange for Western arms, Iran would help secure the release of American hostages held by Hezbollah in Lebanon.

David Kimche, then director-general of Israel’s Foreign Ministry and a former Mossad deputy, was among the key Israeli intermediaries. He coordinated between the U.S. National Security Council (under Oliver North) and Israeli arms manufacturers.

Yaakov Nimrodi, a well-connected Israeli arms broker who had been the IDF’s military attaché in Tehran under the Shah, also played a role. He had deep personal contacts within Iran’s post-revolutionary military apparatus. The first shipment of TOW anti-tank missiles in August 1985 was transferred to Iran via Israel. In return, one American hostage was released.

The U.S. would thus funnel arms via Israel, who would ‘launder’ the operation to avoid public scrutiny. Later, the scandal ballooned as funds from the Iran arms sales were illegally diverted to Nicaraguan Contras.

For a country whose founding narrative rests on existential threat, Israel’s long entwinement with Iran is an awkward inheritance. That it once considered selling Iran its prized Lavi fighter jet programme, the crown jewel of Israeli aviation, strains credulity today. At the same time, it also underscores the extraordinary contingency of Middle Eastern alliances.

In 330 BCE, Alexander the Great had torched Persepolis, the ceremonial capital of the Persian Achaemenid Empire. Some say it was an accident. Others insist it was deliberate. Either way, an empire built on splendour and secrecy collapsed into ash. Today, the Islamic Republic, born in fire, sustained by secrecy, finds its prized nuclear facilities once again reduced to rubble. Only this time, the flames are not accidental.