Israel clinches deal with Lebanon, Cyprus still at bay

The eastern Mediterranean was on a roll this week after US mediation managed to get broad acceptance for an Israel-Lebanon maritime demarcation deal, but Tel Aviv still faces another challenge only weeks before elections as not everyone is at ease with similar arbitration efforts to resolve a dispute with Cyprus.

Israel and Lebanon reached a historical agreement it emerged on Tuesday, after both sides approved a finalized deal drafted by US Senior Advisor for Energy Security Amos Hochstein.

The US-brokered deal, which settles a maritime border dispute in a gas-rich part of the eastern Mediterranean, comes one month after Hochstein traveled to Beirut to seek convergences following public statements of reluctance and doubt.

Lebanon’s President Michel Aoun had hinted at the American terms being “satisfactory” while Lebanese negotiator Elias Bou Saab, who spoke to Reuters on Tuesday, said the latest draft "takes into consideration all of Lebanon's requirements and we believe that the other side should feel the same.”

Hours later Israeli Prime Minister Yair Lapid issued a statement saying “this is a historic achievement that will strengthen Israel's security, inject billions into Israel's economy, and ensure the stability of our northern border.”

US President Joe Biden called both Aoun and Lapid on Tuesday to congratulate them on a finalized deal, an agreement that marks a significant compromise between two otherwise-hostile neighbors.

But the deal does not touch on a shared land border, where Israel and Iran-backed Lebanese armed group Hezbollah have clashed repeatedly in recent decades.

Hezbollah appeared to have consented to the Lebanese government’s position on the maritime deal but on Tuesday said the organization would remain vigilant and only recognize the deal once it was officially signed.

Cyprus in the mix

Hochstein was in Beirut in July when little was known about negotiations, while the Israel-born diplomat had also met back in February with Cypriot Foreign Minister Ioannis Kasoulides, who said the two had “a useful meeting.”

Lebanon’s parliament has yet to ratify a 2007 delimitation agreement with Cyprus citing the long-running dispute between Beirut and Tel Aviv.

But Cyprus poses another challenge for Israel as the two nations have failed to resolve a decade-long dispute over the Aphrodite-Yishai natural gas reservoir that crosses the maritime territory claimed by both countries.

Israeli Energy Minister Karine Elharrar visited Nicosia last month to talk gas directly with Cypriot Energy Minister Natasa Pilides, after companies tasked by the two governments to negotiate a joint reservoir failed to agree on a buyout deal.

Buyout, one or many payments, or joint development?

The two women agreed on appointing an international expert who could establish a one-time financial compensation for Israel to waive completely its rights to the 10% of the field, a solution favored by Nicosia.

But the arbitrator is also being tasked to determine whether Cyprus should pay royalties and taxes to Israel regularly.

Elharrar reportedly remained open to the idea for the sale of Israel’s concession to its part of the reservoir to companies licensed by Cyprus, but no amount of compensation has been determined.

The proposed arrangement with Nicosia, an understanding that emerged with the previous government in Tel Aviv, has not gained much support from companies licensed by Israel that reportedly favored joint development of the field but were turned down.

Israel’s premier Yair Lapid has also come under scrutiny after critics suggested the deal with Lebanon was setting a dangerous precedent for other maritime issues, including the Israel-Cyprus dispute.

Media sources pointed out that the Israeli government under former prime minister Benjamin Netanyahu did not want to concede certain disputed areas, while the deal has also been criticized within Israel for making its way just before legislative elections on November 1.