(Bloomberg) -- After three decades of increasingly friendly ties, tensions over President Vladimir Putin’s invasion of Ukraine are triggering the worst rift in relations between Russia and Israel since the Soviet Union’s collapse.

An attempt by the Justice Ministry in Moscow to close the office of the Jewish Agency, an organization affiliated with the Israeli government that aids Jews to emigrate from Russia, is bringing matters to a head. A Moscow court held a preliminary hearing last week on the application to halt the agency’s activities that began in Russia in 1989 when then Soviet leader Mikhail Gorbachev opened up the country.

Israeli Prime Minister Yair Lapid has warned Russia that shuttering the agency would be a “grave event” that damages diplomatic relations. Still, Israeli delegates who’ve visited Moscow to discuss the case have made no progress in averting the threat, said two officials in Israel, speaking on condition of anonymity because the matter is confidential. The next court session is set for Aug. 19. 

The push to close the Jewish Agency is a warning to Israel not to align itself with the US and its allies against Russia over the war in Ukraine, according to two people in Moscow close to the government.

The falling-out between Israel and the Kremlin represents a remarkable turnaround after Putin cultivated ties with Israeli leaders for years as part of a wider Russian push for Middle East influence. As recently as 2020, he was feted in Jerusalem at a ceremony marking the 75th anniversary of the liberation of Nazi Germany’s Auschwitz death camp by the Soviet Red Army.

“After the collapse of the USSR things were opening up more and more,” said Elena Suponina, a Moscow-based Middle East analyst. Now “ties between Israel and Russia have never sunk so low.”

The Kremlin didn’t immediately respond to a request to comment on the tensions.

Migration Applications

The confrontation is stoking anxiety in Russia’s Jewish community, many of whom were already alarmed by the fallout from growing nationalist sentiment following Putin’s invasion of Ukraine.

The Jewish Agency recorded an increase in migration applications from Russia once the war began. Some 17,000 people have left for Israel so far this year, with several thousand more waiting to depart, adding to the quarter of a million that the agency has assisted to emigrate from Russia since 1994.

Putin has long courted Jewish community leaders in Russia. Some are now departing amid the tensions over the war. 

Pinchas Goldschmidt stood down as chief rabbi of Moscow after he left the country in March following what he says was pressure on him to publicly support Russia’s invasion. The worsening relations between Israel and Russia “of course will have an impact on the attitude to Jews inside Russia,” he said.

An estimated 1 million Jews live in the country, according to the Federation of Jewish Communities of Russia. Israel has more than 1.2 million Russian speakers, or 13% of the population, following waves of emigration from the former Soviet Union. 

The souring of relations comes as Russia draws closer to Israel’s arch-enemy Iran as the Kremlin battles against the impact of unprecedented sanctions imposed by the US and other western countries over the war in Ukraine. 

Putin Apology

Signs of the impending crisis emerged in May when Russian Foreign Minister Sergei Lavrov caused an uproar by suggesting that Adolf Hitler was part Jewish, leading Putin to apologize to Israel. 

The tensions deepened after Lapid switched from foreign minister to acting prime minister last month when his predecessor’s government collapsed, triggering parliamentary elections set for Nov. 1. 

At a July 14 press conference with US President Joe Biden in Jerusalem, Lapid condemned “Russia’s unjustified invasion of Ukraine,” two days after Israel sent a second batch of non-lethal military aid including helmets and protective vests to the government in Kyiv.

While Russian officials say the fate of the Jewish Agency is a legal issue, Foreign Ministry spokeswoman Maria Zakharova criticized “unconstructive” and “unobjective” Israeli rhetoric on Ukraine in an interview last week. Adding to Russia’s ire is an unresolved dispute over the ownership of Orthodox Church property in Jerusalem, according to Israeli and Russian officials.

Chuck Freilich, a former deputy national security adviser in Israel, said the Jewish Agency had run into difficulties with Russian authorities for a couple of years. But Russia appears to have targeted it now to “manufacture a crisis in order to punish Israel” over Ukraine, he said.

The tensions will have “some influence” on Israel’s elections, said Ksenia Svetlova, a nonresident senior fellow at the Atlantic Council and a former member of the Israeli parliament. “Lapid’s opponents are already very vocal in accusing him of ruining relations with Russia,” she said.

Russia is concerned the US may convince Israel to provide military assistance to Ukraine, said Suponina, the Moscow-based analyst. The Kremlin is also unhappy about Israeli attacks in Syria targeting Iranian arms supplies to the Hezbollah group in Lebanon, and reported plans by Israel to attack Iranian nuclear installations, she said.

Israel last week confirmed a report from two months ago that Russian anti-aircraft batteries in Syria fired at Israeli air force jets. 

The Israeli government is considering a series of harsh “political measures” against Russia if the Jewish Agency is shut down, the Israel Hayom newspaper reported last week.

Still, retaliation is likely to be measured because “from Israel’s point of view, we can’t allow this to get out of hand,” said Freilich. 

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