This week’s U.S.-brokered hostage exchange with Iran has Jerusalem on edge. The United States is providing Israel’s greatest adversary with billions in sanction relief while making major nuclear concessions that will only empower the regime in Tehran and put Israel, and the rest of the world, in peril.

The administration notified Congress on Monday that it intends to release $6 billion in frozen funds in exchange for five American hostages being held by Iran. The deal amounts to a ransom payment that will fund the terror-sponsoring regime’s malign activities across the Middle East while doing nothing to curb Iran’s progress toward a nuclear weapon. Israel’s leaders are more than justified in their concern.

First and foremost, Jerusalem is questioning the Biden administration’s commitment to preventing a nuclear Iran. The deal will do nothing to punish the regime for enriching uranium at 60%, which represents the vast majority of the effort to enrich to weapons-grade uranium. In essence, Washington is enabling the Iranian regime to remain on the cusp of weapons-grade nuclear enrichment — an estimated 1-2 weeks from breakout. This may explain why Ron Dermer, Israel’s minister of strategic affairs and close confidant of Prime Minister Benjamin Netanyahu, traveled to Washington last month to consult with Biden national security adviser Jake Sullivan on the potential for a U.S.-Israel defense pact.

The sanctions relief also poses a grave kinetic threat. Only days after completing the hostage deal, Tehran unveiled a new drone that it claims can reach the Jewish state. The regime continues to prioritize investment in its arms industry to advance its warfighting capabilities in a future clash with Israel. Billions of dollars, despite American claims that the funds will be limited to humanitarian allocations, are almost sure to be invested in these lethal weapons of war. The day after the administration’s announcement, Iranian President Ebrahim Raisi declared that Iran would decide how to spend the money.

But the concerns don’t end there. Iran funds no less than 19 terror organizations on Israel’s borders and has invested heavily in encircling the Jewish state. A former Israeli national security official estimates that Iran spends over a billion dollars a year funding the three most active terror groups whose raison d’etre is to destroy Israel: Hezbollah, Hamas, and Islamic Jihad. Recently, these proxies have demonstrated a new willingness to assume risk and test Israel’s resolve.

Since 2022, an emboldened Hezbollah has regularly violated the border with Israel with drones, mortars, encampments, and even operatives penetrating Israel to murder Israelis. Iranian proxies in Gaza have stepped up their efforts to export and activate terror cells in the West Bank, where terrorists have unprecedented access to sophisticated U.S.-made firearms and are developing weapons such as IEDs and rockets, all bearing the fingerprints of the Iranian regime.

Some connect the uptick in terror activity to the domestic upheaval in Israel. In truth, the trend of escalation began long before the Netanyahu government’s controversial judicial reform legislation was on the table. Nevertheless, terror leaders across the region have delighted at the spectacle of unrest in Israel. Amid reports of reservists refusing to serve, Netanyahu may be reticent to order a major operation to neutralize these recent threats.

Of course, Israel is not alone in its concerns over the deal. The Kingdom of Saudi Arabia is also watching with trepidation, prompting the government to make some new requests of the U.S. and its partners in the region. The asks include the delivery of more sophisticated weapons, signing a defense treaty, and a green light to enrich uranium. And while the Israelis are tempted to acquiesce to these demands to pave the way for a U.S.-brokered normalization deal, the fears of a nuclear cascade, a flood of other Arab states acquiring nuclear capabilities of their own, could threaten Israel’s existence.

The Israeli government must also pause to assess whether the U.S. bowing to Iran’s demands might make Saudi Arabia less inclined to make any deal with Washington. After all, the deal unquestionably strengthens Saudi Arabia’s most dangerous and determined foe.

As with previous nuclear agreements between the U.S. and Iran, Jerusalem fears the new arrangement will put the regime closer to a nuclear bomb with more money in the bank. These fears could provoke a long-anticipated Israeli strike on facilities supporting the Iranian nuclear program. Such a decision would not be taken lightly. An Israeli attack could very likely ignite a regional war, with Israel facing attacks from Iranian proxies on multiple fronts that inflict a heavy cost on the Israeli homeland.

Then again, as Israeli hawks see it, failing to address those threats now will also be self-defeating. As long as America keeps filling Iran’s coffers, these actors are only set to gain power.

Jonathan Schanzer is senior vice president for research at the Foundation for Defense of Democracies, a nonpartisan research institute focusing on national security and foreign policy. Enia Krivine is senior director of FDD’s Israel Program and National Security Network. Follow them on X: @JSchanzer and @EKrivine.

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