How Israel used NSO spyware as diplomatic calling card

Gulf countries such as UAE, Bahrain and Saudi Arabia offered clandestine security co-operation

A woman checks the website of Israeli-made Pegasus spyware at an office in the Cypriot capital Nicosia on July 21st, 2021. Photograph: Mario Goldman/AFP via Getty Images

At the height of the coronavirus pandemic, Naftali Bennett, then Israel’s defence minister, came up with an idea to help contain the spread of the disease: let the military spyware manufacturer NSO track down his fellow citizens’ every movement.

The suggestion from the man who is now Israel’s prime minister did not pass muster. But it shows the close ties the Israeli company assailed by rights activists for selling a military-grade surveillance software to repressive regimes has with the highest echelons of the state.

NSO’s Pegasus software, which requires a government licence for export because it is considered a weapon, has in recent years become a crucial part of Israel’s diplomatic outreach – a role that has come into focus after the revelation by a consortium of newspapers that it had been traced to the mobile phones of 37 journalists, lawyers and political activists. The software surreptitiously turns phones into listening devices while unveiling their encrypted contents.

"From the 1950s, Israel used its weapons sales for diplomatic gains, the only thing that changes is the names of the countries," said Eitay Mack, an Israeli human rights lawyer who has tried for years to have NSO's export licence cancelled. "The question is if there will be some change in the exports policy."


While the recent news media leaks on Pegasus sparked international outrage, the criticism in Israel has been muted. The reporting "looks tendentious, with a commercial motivation", said lawmaker Yair Golan, a former deputy military chief, jumping to NSO's support in a televised speech. "It is not just NSO that does such things."

The Ministry of Defence, which must approve every licence to export the weaponry, said that “appropriate measures are taken” if any violations of the export licence are proved.

NSO's co-founder and chief executive, Shalev Hulio, denied the consortium's findings, which allege that NSO's spyware has been regularly used on members of civil society, opposition leaders and people with no connection to terrorism or crime.

“We are claiming very vocally that these are not Pegasus targets, or selected as Pegasus targets, or potential Pegasus targets. This has no relation to any customer of ours or NSO technology,” he told the Financial Times, vowing to shut down any customer’s systems that are proved to infect devices belonging to journalists or members of civil society.

NSO has said in the past that it does not have access to its client’s targets. Hulio said the company had queried each one of its clients individually to reach that conclusion.


In recent years, Israel has wooed Gulf countries such as the United Arab Emirates, Bahrain and Saudi Arabia into improving bilateral relations, by offering clandestine security co-operation against shared regional enemies, from the Muslim Brotherhood to Iran.

As the countries grew closer, groups such as Amnesty International and the Citizen Lab have tracked increasing Pegasus intrusions into the phones of journalists, dissidents and activists across the region.

“It’s like the toy that every intelligence officer wants,” said a person involved in pitching NSO products in the Gulf. “They love the demos, they love that it is from Israel.”

Similarly, Pegasus attacks have been documented on critics of the governments of Hungary, India and Rwanda, as former prime minister Binyamin Netanyahu pursued alliances with their rightwing leaders.

Israeli prime minister Naftali Bennett chairs the weekly cabinet meeting in Jerusalem on Monday. Photograph: Gil Cohen-Magen/AP

Israel has for years ignored calls by a UN rapporteur on the freedom of expression, and others, to place a moratorium on the sales of spyware and to regulate it more closely.

NSO’s chief executive pushed back on any suggestion that the company’s products had been leveraged by Israel abroad.

"We are not a tool for diplomacy for the Israeli government; we are a commercial company, our shareholders are UK private equity," said Hulio, referring to Novalpina Capital. "Those allegations are just theories."

Those who have fought against NSO’s influence in Israel say the company enjoys strong support from Israeli legal and political circles.

An Israeli judge imposed a gag order on Mexican rights activists so that their lawsuit against the company could be heard in secret.

A judge with a long background in military intelligence is overseeing a case brought by a Saudi dissident and friend of the murdered Washington Post columnist, Jamal Khashoggi. The friend claims NSO was aware of his own phone being targeted. The judge has declined to recuse himself, despite declaring a prior relationship with NSO's lawyers.

"The impression that I get is that the government is eager to help them, especially when it comes to keeping the discussion away from any public scrutiny," said Alaa Mahajna, the lead lawyer on both lawsuits.

“The companies should be held liable for the dangerous technology they sell, but the most efficient way is prevention and, unfortunately, only the Ministry of Defence can do that.”

Hulio declined to comment on the continuing cases. NSO said: “These issues have previously been brought up in court cases against NSO and others and the courts have never accepted this stance.”

PR offensive

For its part, NSO has made no secret of its ties to the Israeli government. In 2019, its lawyers argued in a court case that revealing its list of clients “will meaningfully harm the foreign relations of the state”. In a separate filing, the company has also said the Israeli government itself uses NSO’s technology. Many of its staff are from elite military intelligence units.

NSO has hired big name western advisers, including Tom Ridge, the former secretary of US homeland security, and briefly, Juliette Kayyem, an assistant secretary in the same department. Its current PR offensive is being led by the ex-chief censor of the Israeli military.

Sometimes, the Israeli government has intervened to direct the company’s sales, said two people with knowledge of the issue, especially after high-profile scandals, such as when Saudi operatives killed Khashoggi in Istanbul in October 2018.

NSO initially halted a contract with Saudi Arabia amid allegations its technology had been used to track Khashoggi and his associates. But in 2019 it renewed the contract with the Israeli government’s full approval, said two people with knowledge of the issue.

“There was direct encouragement to keep this relationship alive,” said one, who added that NSO employees returning from the Gulf were often debriefed by Israeli intelligence. NSO’s Hulio denied such briefings took place.

Often, the Israeli government's links have been more public. After a dam collapsed in Brazil in January 2019, killing hundreds, the government dispatched NSO's Hulio, who is a reservist in the search-and-rescue unit of the Israeli military, as part of its aid mission.

“I travelled there as part of my reserve duty. I am proud of what I am doing and it has nothing do with NSO,” he said.

Hulio showcased how NSO’s software can also be used to triangulate the locations of mobile phones down to the last centimetre, according to people familiar with his trip.

“Israel has certain diplomatic goals, and its interests and the interests of these commercial companies can sometimes dovetail,” said Shay Aspril, an author and investigative journalist who first exposed NSO’s secretive technology in 2012.

“The Israeli public does not fully understand what is going inside high tech – the holy cow of the economy – and because the Israeli public is not really concerned, there is no public pressure on the government to change anything.” – Copyright The Financial Times Limited 2021