In the past several years Israel and Iran have been portrayed as bitter enemies who are at each other’s throats. One may be led to believe that the two countries have always been enemies; however, there is a history of friendship between them. During Iran’s rule under the Shah, both countries had extensive economic, political, and military ties that were used to ensure US and Israeli interests in the region.
After the creation of the state of Israel, Iran was forced to play a balancing act between supporting Israel on one hand and making sure not to upset the Arab states on the other. The Jewish state was of great strategic interest to Iran as the Shah knew that Israel could “improve Iran’s security by absorbing the attention and resources of the Arab states.” However, if Iran was to formally recognize Israel, Arab would also fall on Iran thus the Shah treaded “a path between overt hostility and overt alliance.”  In addition to this, the Shah wanted to back Israel and with it the West, due to the fact that Communist ideology threatened the Shah’s rule as the levels of wealth inequality in Iran gave rise to pro-Soviet groups such as the Tudeh (“People’s”) Party. However, the shah was quite suspect of Israel’s loyalties due to the fact that during the outset of Israel’s inception many Israelis “felt an emotional and ideological affinity for the Soviet Union” due to the fact that “not only did strong socialist sentiment exist in Israel, but many Israelis identified the Soviet Union as the country primarily responsible for defeating Nazism.”  This, coupled with Israel’s efforts to befriend both the US and the Soviet Union, made the Shah somewhat suspicious that the Jewish state may have been trying to play both sides. Thus, the Shah adopted a wait-and-see policy where they would maintain a distance from Israel, waiting for her to fully clarify her allegiances.
Israel’s dilemma was quite complex as they had to depend on the West for capital investment, but needed Jews from both the East and the West to immigrate to Israel in order to grow its population and survive. The ethnic makeup of Palestine was against Israelis as by 1948 Palestinians outnumbered Israelis two to one (1.35 million compared to 650,000). While Israel did end up siding with the West, it did not change the fact that they were surrounded by hostile Arab nations. Thus, then-Israeli Prime Minister David Ben-Gurion came up with the doctrine of the periphery which held that due to the improbability of making allies out of the Arab states, Israel should focus cultivating alliances and friendships with non-Arab states such as Turkey, Iran, and Ethiopia (the periphery states) and non-Arab minorities such as Kurds and Lebanese Christians. It was hoped that this strategy would “drive a wedge between Israel’s enemies, weaken the Arab bloc, and halt the spread of pan-Arabism in the region.” 
Iran and Israel would soon find themselves facing a common enemy: Egypt. In 1952 a military coup overthrew King Farouk and dissolved Egypt’s ties from Britain, gaining full independence. The new government drifted into the Soviet sphere. This greatly worried both Iran and Israel as both countries feared Soviet interests in the region, “the threat of radical pro-Soviet Arab states, and both saw the pan-Arab, anti-Western regime in Cairo, led by Gamal Abdel Nasser, as the main villain of the Middle East.”  Iran was especially worried about the Egyptian-Soviet alliance as they were quite concerned “about the territorial expansionism of pan-Arabism” and “Arab claims over Iran’s southern oil-rich province of Khuzestan because this pushed Arab nations to ally against Iran even though their respective national interests may have dictated a different course.” 
This friendship between Israel and Iran went beyond mutual threats and into economics. Due to the Arab refusal to sell oil to Israel, the Jewish state was in desperate need of oil to continue its economic growth. Iran was readily able to supply oil as after the 1956 Suez crisis; they helped to finance the construction of the Eilat-Ashkelon pipeline which connected the gulf of Aqba and the Mediterranean which allowed Iranian exports to bypass the Suez Canal. This ability to bypass the Suez was quite important as “73 percent of Iran’s imports and 76 percent of its oil exports passed through the canal.” The deal eventually deepened Israeli-Iranian ties on the highest administrative levels as “The pipeline was later upgraded to a sixteen-inch pipe after direct negotiations between Israeli Prime Minister Levi Eshkol and the Shah in 1958”  which was the first direct meeting between an Israeli Cabinet member and the Shah.
This pipeline was not without consequences, however. While Israel and Iran didn’t reveal their economic cooperation, the close relationship between the two nations was well known to Arab states and was subject to intense criticism. Due to Arab sensitivities, the US backed the pipeline only after it was assured that the pipeline mattered more to the Shah than Arab sentiments as they sensed the Shah wanting to keep Israel at a friendly distance.
In addition to economic ties, the fact that Iran had a large Jewish community and Israel was a state meant for Jews was an area of cooperation. Israel wanted to bring Iranian Jews to the Jewish state and Iran wanted Israel’s level of influence in Washington and needed Israeli technological know-how to aid Iranian agriculture, with Israel training some 10,000 Iranian agricultural experts. Finally, the two nations connected due to being the “odd-men out” due to their non-Arab status in a region dominated by Arabs.
Yet, for all this friendship, there will still other motives at play. While Iran was quite important to Israel’s overall regional political strategy, Israel was not viewed in the same matter in Iran. Iran saw Israel as a vehicle to block Soviet- not Arab- regional advances. Iran saw the Soviets as a greater threat than the Arabs as the Soviets eyed “the oil reserves of the region” and was “using Nasser’s Egypt as its surrogate to penetrate the Persian Gulf.”  In addition to this, the Soviets were supporting leftist Iranian opposition movements, thus pushing the Shah into the arms of the United States. However, there was a dark side to the Iranian-Israeli alliance in the form of the Organization of Information and State Security, also known as the dreaded Savak.