Netanyahu, China, and Hamas Funding
In late July 2023, ten weeks before the terrorist group Hamas staged its October 7 massacre in Israel, Prime Minister Benjamin Netanyahu announced his intention to visit China. The announcement, made as Netanyahu smilingly posed with copies of Chinese President Xi Jinping’s latest book, was a subtle dig at the United States, which hadn’t hosted Netanyahu since his return to office seven months earlier.
Netanyahu’s opportunistic needling of Washington was part of a pattern of triangular diplomacy among Washington, Beijing and Jerusalem that dates back to Israel’s earliest days. But few Israeli leaders have been as overt in their efforts to leverage the rivalry between the U.S. and China as Netanyahu, who has now been in office for a total of 18 years.
The tangled triangle gets far less attention than it should. It has led to U.S. weapons designs shared with Israel ending up in China. And while China continues to censure Israel at the United Nations and support funding of Hamas in Gaza, more Chinese investments are being made in Israeli leading companies and sensitive infrastructure. American continues to put pressure on Israel to cut off Chinese involvement inside Israel while they support extreme Palestinian groups. A reader looking for consistency would find it only in Israel’s opportunism at a time that the U.S.-China competition is growing to unprecedented levels.
In September 2025, after Israel launched a missile strike on Hamas negotiators living in Qatar, President Trump pressured Netanyahu to apologize to the Qatari prime minister for violating its territory. A defiant Netanyahu told a visiting delegation of U.S. lawmakers that “there is an effort to besiege Israel, led by two countries: China and Qatar; they are waging a campaign to delegitimize Israel in the Western world and the United States.”
What motivated Netanyahu to lash out so harshly at China, publicly insulting them? The answer may lie in Netanyahu’s previous policy towards China and his 2023 gambit to visit Beijing and snub President Biden. The rebuke was all the more embarrassing given Netanyahu’s longstanding view of China as a possible alternative to the U.S.
In January 2012, the Chinese ambassador to Israel hosted a reception marking the twentieth anniversary of diplomatic relations. Netanyahu attended in person and stated, among other things: “It is customary for the Prime Minister of Israel to attend the independence celebration of only one country—the United States, a great friend of Israel. I believe we have now initiated a tradition wherein the Prime Minister of Israel attends the…celebrations of two countries. I have no doubt that in the coming years, we will witness a dramatic development in these relations.” Netanyahu’s remarks were made unilaterally, without any reciprocal commitment from China toward Israel.
This perspective led to Netanyahu’s 2013 decision to prioritize economic interests with China—and a visit to the country—over a potential important achievement in the effort to block Iranian funding for Hamas in Gaza via the Bank of China. This development was reported at the time by media outlets in Israel and the United States but did not receive adequate attention, particularly regarding Netanyahu’s role in the funding of Hamas.
At the time, Netanyahu sought to polish his image as a statesman with visits to Beijing and Shanghai with his wife and two sons in May 2013, two months after Xi Jinping assumed the presidency. During their meeting, Netanyahu stated that he had “come to China with a simple proposal: that we leverage our mutual strengths together. China is a global powerhouse in many fields, and Israel is a global hub for technology.”
Behind the scenes, though, China was putting the screws on Netanyahu over another matter of importance to Beijing, as the Bank of China was facing trial in United States on allegations of supporting financing for Hamas and Palestinian Islamic Jihad in Gaza. The Israeli journalists Chaim Levinson and Amos Harel published a long article in Haaretz newspaper in September 2013 saying Israeli intelligence officials had traveled to Beijing in 2005 to inform the Chinese authorities about the use of Bank of China accounts to support terrorism. During several visits to Beijing, detailed information was provided regarding Palestinian accounts at the bank’s branch in Guangzhou; funds were transferred through these accounts from Iran to China and subsequently to the Gaza Strip, helping to finance terrorist activities, they said. The Chinese refused to intervene or close the accounts, arguing that Hamas was not a terrorist organization.
In the spring of 2006, eleven people were killed in a suicide bombing near the Tel Aviv Central Bus Station, among them a 16-year-old Jewish-American boy named Daniel Wultz. His mother, Sheryl Cantor Wultz, is a cousin of Eric Cantor, the Republican who then served as House Majority Leader in the U.S. Congress. In Israel, it was believed that an opportunity had arisen to pressure the Chinese. About three years after the attack, and with the support of Prime Minister Ehud Olmert, the slain boy’s parents were persuaded to file a lawsuit against the Bank of China.
As part of this process, an affidavit signed by Shlomo Matalon—a former employee of the Prime Minister’s Office—was submitted to the court in Washington; it stated, among other things: “I am aware that in April 2005, Israeli officials from the Counter-Terrorism Bureau met with their Chinese counterparts. The Israelis pointed out to their Chinese colleagues that Hamas and Islamic Jihad were carrying out financial transfers to expand their terrorist activities. The Israeli officials asked their Chinese counterparts to take action to prevent the Bank of China from executing further transfers.”
The Chinese bank responded that the plaintiffs lacked the standing to sue, arguing that they were raising non-justiciable issues and disregarding the sovereign immunity laws applicable to the Bank of China’s status. The federal court in Washington rejected the bank’s arguments, ruling in October 2010 that the plaintiffs had successfully demonstrated a link between the bank and the terrorist activities.
Consequently, the case could proceed; however, the lawsuit’s success hinged on the testimony of a top Israeli counter-terrorism official, Uzi Shaya, regarding his trips to Beijing and conversations in China. In April 2012, the family received messages from the Israeli Embassy in Washington and from Ron Dermer—Prime Minister Netanyahu’s close advisor—indicating there would be no obstacle to the testimony being given.
But then an obstacle arose, following Netanyahu’s Beijing trip. The testimony was delayed, leaving the family feeling deceived. The parents even wrote to Netanyahu: “A courageous Israeli prime minister would not yield to pressure of any kind, nor would he look the other way in the face of terrorists and those who aided them in murdering an Israeli, American, or any other citizen. No matter who the wrongdoers are—forgiving them is out of the question.”
The Chinese exerted heavy pressure on Prime Minister Netanyahu, resulting in a pledge to Beijing that the testimony would not be given. Only then was the visit approved. The promised testimony never took place and the case was dropped in 2015. In a New York Times article in 2015, Yekutiel Wultz was clear about who he viewed as the wrongdoer: “We feel betrayed by Netanyahu. The government sent us as soldiers into the battlefield. Then they turn around and leave us there. And finally, they shoot us in the back”.
According to Israel Security Agency documents published by the Israeli newspaper Haaretz, the transfer of funds from China to Gaza continued for a number of years. The RAND Institute subsequently defined this event as example of how high levels of both Chinese investment and construction could provide Beijing with political leverage over Israel.
After the October 7 massacre, China refused to condemn Hamas, harshly criticized Israel’s conduct against the Palestinians, and served as a key witness against Israel at the International Court of Justice in the Hague. China’s hostile stance—itself driven largely by a desire to attack the “hypocritical policy” of the United States, which supports the use of force by its aggressive ally—served as a wake-up call for many Israelis regarding the future of relations and the potential alignment of interests with China.
The Gaza war once again shines a light on the hazards of Israel’s triangular diplomacy with Washington and Beijing.
This is part of a chapter from Dr. Eyal Propper’s new book “Tangled Triangle: Israel-China Relations Under America’s Shadow,” which was released on November 11 by Earnshaw Books.