Early in the year, Israel and Egypt moved closer to normalizing their ties with the decision to place three Taba issue under international arbitration in return for normalization of ties. Egypt returned its ambassador to Israel after an absence of four years. But although the prime minister termed 1986 as a "crucial year", there was not much progress in the peace process.
Even though Jordan announced that it was no longer able to continue to coordinate politically with the PLO, as that body refused to accept resolution 242, attempts to start Israeli-Jordanian talks, with the participation of Palestinians living in the areas were not successful. Some of them were intimidated by the PLO and refused to take part in any talks. One possible Palestinian representative, the mayor of Nablus, was assassinated by the PLO. When Secretary of State Shultz called off a Middle Eastern visit in May, it was evident that the process was in abeyance. But Israel persisted in the efforts to find partners for talks.
In July Prime Minister Peres paid an official visit to Morocco as guest of King Hassan II. The visit did not produce any immediate tangible results, but had a dramatic effect on Israelis and on international public opinion. In September, Mr. Peres held a summit conference with President Mubarak of Egypt. The latter, now no longer seen as the only Arab leader to have ties with Israel, invited Mr. Peres to Alexandria. Both leaders declared that 1987 should be the year for negotiations for peace (document 191).
Israel-U.S. relations advanced when Israel signed an agreement to take part in the S.D.A. (Star War), but they were marred by the Pollard Affair and later allegations in the U.S. media about Israeli involvement in espionage and arms deals. This was denied by Israel (documents 174 and 175). The visit of Vice President George Bush to Israel eased much of the tension. At year's end, Israel was mentioned as having taken part in what became known as the Iran-Contra Affair, serving as a conduit for American arms to Iran in return for the release of U.S. hostages.
In 1986 Israel and Spain agreed to establish diplomatic relations, while in Africa Cameroon became the fourth country to restore ties with Israel. There were growing number of reports of secret meetings between Israeli and Soviet emissaries and they were followed by an official meeting in Helsinki in August, to discuss human rights and technical issues pertaining to Soviet property in Israel. A start was thus made to establish closer ties with the Gorbachev regime.