Over the past few years, the strategic environment in the eastern Mediterranean has changed radically. Israel's raid in May 2010 on a Turkish vessel seeking to deliver aid to the Gaza strip provoked a fall-out between the two countries, the region's closest allies.

The discovery late in 2011 of gas reserves off Cyprus's coast – adjacent to Israel's massive Leviathan field – by Noble Energy, an American firm part-owned by Israeli investors, generated excitement among the Greek Cypriots; and displeasure in Turkey and among the Turkish Cypriots, who say that the island's energy wealth does not belong just to the internationally-recognised Republic of Cyprus but to all inhabitants of the island.

In February, Benjamin Netanyahu became the first Israeli prime minister to visit Cyprus, a 20-minute flight from Tel Aviv. At the same time, Israel and Cyprus signed agreements on defence co-operation, on the exchange of intelligence, and on search and rescue missions.

However, the new Israel-Cyprus alliance has its limits, and the realignment may turn out to be short-lived. “Let's not fool ourselves: Israel is not going to defend anyone but itself,” says Ioannis Kasoulides, a centre-right MEP who was Cyprus's foreign minister from 1997-2003. Nevertheless, Kasoulides, from the opposition Democratic Rally (DISY), says the Cypriot government has every right to exploit its hydrocarbon resources. “I don't think mankind can sit on trillions of tons of natural gas and wait for the Cypriots to solve their problems,” he says.

Hugh Pope, a Cyprus and Turkey analyst with the International Crisis Group, a think-tank, is also sceptical about the durability of the new alliance. “Cyprus can't count on Israel,” he says. “Turkey-Israel is a much bigger story than anything to do with Cyprus.”

Should there be a reconciliation between Ankara and Tel Aviv, Cyprus would again find itself isolated in the eastern Mediterranean.

In February, Benjamin Netanyahu became the first Israeli prime minister to visit Cyprus, a 20-minute flight from Tel Aviv. At the same time, Israel and Cyprus signed agreements on defence co-operation, on the exchange of intelligence, and on search and rescue missions.
However, the new Israel-Cyprus alliance has its limits, and the realignment may turn out to be short-lived. “Let's not fool ourselves: Israel is not going to defend anyone but itself,” says Ioannis Kasoulides, a centre-right MEP who was Cyprus's foreign minister from 1997-2003. Nevertheless, Kasoulides, from the opposition Democratic Rally (DISY), says the Cypriot government has every right to exploit its hydrocarbon resources. “I don't think mankind can sit on trillions of tons of natural gas and wait for the Cypriots to solve their problems,” he says.

Hugh Pope, a Cyprus and Turkey analyst with the International Crisis Group, a think-tank, is also sceptical about the durability of the new alliance. “Cyprus can't count on Israel,” he says. “Turkey-Israel is a much bigger story than anything to do with Cyprus.”

Should there be a reconciliation between Ankara and Tel Aviv, Cyprus would again find itself isolated in the eastern Mediterranean.

Frustrating talks

The one development that would dramatically alter this, of course, is the reunification of the divided island and the withdrawal of the Turkish troops that have been occupying one-third of its territory since 1974. But after four years of fruitless talks, with United Nations facilitation, prospects for a settlement have receded. “I don't believe now what I used to believe six months ago,” says Kasoulides, “that these talks will go anywhere.” Technical talks will continue, but that is not the level at which a solution will emerge.

In the meantime, Cyprus's exposure to Greek debt has deepened traditionally close ties with Russia. Last year, Cyprus secured a €2.5bn loan from Russia at below-market rates, and might in future prefer Russian aid to a eurozone bail-out.

The one development that would dramatically alter this, of course, is the reunification of the divided island and the withdrawal of the Turkish troops that have been occupying one-third of its territory since 1974. But after four years of fruitless talks, with United Nations facilitation, prospects for a settlement have receded. “I don't believe now what I used to believe six months ago,” says Kasoulides, “that these talks will go anywhere.” Technical talks will continue, but that is not the level at which a solution will emerge.
In the meantime, Cyprus's exposure to Greek debt has deepened traditionally close ties with Russia. Last year, Cyprus secured a €2.5bn loan from Russia at below-market rates, and might in future prefer Russian aid to a eurozone bail-out.