• Israeli officials say they were blindsided by the Trump administration's proximity to a nuclear deal with Iran, as they were ramping up military preparations for potential escalation.
  • The misalignment underscores a gap between Washington's diplomatic track and Jerusalem's security planning, raising concerns about coordination.
  • Energy markets are on edge as geopolitical risk premiums rise, with investors monitoring any sign of conflict that could disrupt regional stability.

A Strategic Disconnect

Israel was not informed that the Trump administration was on the verge of reaching a nuclear deal with Iran, according to an Israeli source familiar with the matter. At the same time, the Israeli military was preparing for a potential escalation in fighting against Iranian forces or proxies, the source added. The revelation points to a significant disconnect between the two allies at a critical juncture.

The source, speaking on condition of anonymity, said that Israeli intelligence had not detected the advanced state of talks between Washington and Tehran. Instead, Israel's defense establishment had been operating under the assumption that diplomatic efforts were stalled, prompting a heightened state of readiness for possible strikes on Iranian nuclear or energy infrastructure. "We were preparing for a different reality," the source said.

Implications for U.S.-Israel Relations

Close coordination between the U.S. and Israel has long been a hallmark of their strategic partnership, particularly on Iran. However, the apparent lack of communication over the deal's timeline raises questions about the reliability of intelligence sharing. According to people familiar with the matter, the Trump administration had been conducting backchannel negotiations with Iran for weeks, with a framework agreement reportedly nearing finalization. The deal is said to include limits on Iran's uranium enrichment in exchange for sanctions relief, but details remain scant.

The Israeli source emphasized that Jerusalem remains committed to preventing a nuclear-armed Iran but expressed frustration over being left in the dark. "We have our own red lines, and we will act if necessary," the source said. The White House did not respond to requests for comment, and the Iranian mission to the United Nations declined to address the matter.

Market Watch

Global energy markets are reacting cautiously to the news. Brent crude oil prices edged up 0.8% to $85.40 per barrel on Thursday, as traders priced in a higher geopolitical risk premium. Analysts at Goldman Sachs noted that any credible threat to Iran's oil exports or regional transit chokepoints could send prices sharply higher. "The market is on edge," said a senior oil trader at a major hedge fund. "If Israel strikes, you could see a spike of $5 to $10 in a single day."

Investors are also watching the broader implications for U.S.-Iran relations. A deal could unlock Iranian oil exports, easing global supply constraints, while a breakdown could trigger a cycle of retaliation. The situation remains fluid, with both diplomatic and military tracks active.

Correction: An earlier version of this article incorrectly stated that Israel was preparing for a ground offensive. The preparations were for potential airstrikes and defensive measures.