In a potential new source of contention between President Barack Obama and Israeli Prime Minister Benjamin Netanyahu, Israel has reportedly granted a U.S. energy firm with heavyweight political connections to explore for oil and gas in the occupied Golan Heights.

The company is a local subsidiary of New Jersey-based Genie Energy Ltd.* The Strategic Advisory Board of another subsidiary, Genie Oil and Gas, includes former Vice President Dick Cheney, media magnate Rupert Murdoch, and former Republican Rep. Jim Courter.

It also includes several prominent investment managers, such as Jacob Rothschild, chairman of the J. Rothschild group, and Michael Steinhardt, a major contributor to Jewish and Zionist causes, notably Birthright Israel, a multi-million-dollar programme to bring young Diaspora Jews to Israel.

By their own admission, the Israeli government says it’s occupied territory. So why would they invest millions of dollars in occupied territory?

The granting of the licence by Israel’s Ministry of Energy and Water Resources, which was initially reported by Dow Jones Thursday, comes amidst continuing civil war in Syria, which has demanded the return of the Heights since Israel took them in the 1967 Arab-Israeli War.

It also comes a month before Obama is scheduled to make his first visit to Israel as president.

Some analysts here compared the move to previous announcements by the Netanyahu government of new settlement construction on the West Bank or East Jerusalem — either on the eve of or during meetings with top U.S. officials – that have clearly contributed to thinly veiled tensions that exist between the two leaders.

The administration remained tight-lipped about the move Friday, confining itself only to issuing a terse statement by the State Department acknowledging the press reports about the licence.

“We intend to discuss this issue with the Israeli Government,” it said.

“I wouldn’t be surprised if this is part of Netanyahu’s plan to put additional pressure on the U.S., as he’s done with President Obama in the past,” Charles Ebinger, an energy and Middle expert at the Brookings Institutions, told IPS. “He keeps changing the facts on the ground through expansion of settlements and now this on the Golan.

“He keeps taking these actions, whether with the Palestinians or the Syrians. It makes it more and more difficult for the Arabs to come to the table,” he added. “It’s definitely contrary to international law and goes against any number of U.N. Security Council resolutions.”

“The move probably was not intended primarily to stick a thumb in the eye of the United States,” noted Paul Pillar, a former top Middle East analyst for the Central Intelligence Agency (CIA), “but coming only a month before President Obama’s scheduled trip to Israel, it demonstrates again that the Netanyahu government evidently is not bothered by doing just that.

“The Israelis may be anticipating a replacement of the (President Bashar Al-)Assad regime by new Syrian rulers who would push harder for return of the Golan Heights. The idea from Israel’s perspective would be to try to strengthen its claim to the territory by creating still more facts not only on the ground but underground,” he told IPS in an email exchange.

Unlike East Jerusalem, Israel has not tried to “annex” the Golan Heights, although in 1981 it extended Israeli law and administration to the territory – a move that was declared “null and void” by the U.N. Security Council. The U.S., which at various times has tried to mediate a peace accord between Syria and Israel, has never recognised the Jewish State’s occupation there.

The Heights, which successive Israeli governments have said they are prepared to return to Damascus under certain conditions, currently hold 32 Jewish settlements with a total population of around 20,000.

In 2008, Turkey reportedly came close to mediating a peace accord between Israel and Syria that included a return of the Heights, but the effort fell apart when Israel launched its “Cast Lead” military operation in Gaza late that year.

Despite the ongoing civil war in Syria, hostilities between Assad’s forces and rebel groups have only rarely crossed the border into the Israeli-controlled territory.

Some analysts said the move appeared designed in part to take advantage of the ongoing chaos inside Syria.

Successive Israeli governments rejected drilling applications in the past mainly out of a desire to avoid inflaming tensions with Damascus, according to one knowledgeable source who declined to be identified.

“With no effective government in Damascus, I guess they figured no harm would come from going ahead,” the source said.

One prominent U.S.-based anti-Assad activist, Husam Aldairi, expressed astonishment at the move, asking “How is it possible to give a licence for drilling in occupied territory?”

Aldairi, who has served as the president of the U.S. section of the Syrian National Council and now serves as vice chairman of the opposition’s National Coalition’s Tribal Council, said the move “will only serve the purpose of supporting Assad against the revolution.”

“I truthfully think that is a very negative thing to do at this point,” he told IPS in an interview in which he stressed that he was speaking in his personal capacity only.

“You’re only agitating the Syrian people. At this point, they will not be too worried about it, but, in the long run, there has to be a peaceful resolution over the Golan Heights. By their own admission, the Israeli government says it’s occupied territory. So why would they invest millions of dollars in occupied territory?”

The licence, which was reportedly contested by the affected settler communities for environmental among other reasons, will permit Genie Israel Oil and Gas Ltd to conduct exploratory drilling in most of the southern part of the Heights.

Genie, which has an exploration licence in the Shfela region of central Asia through another Israeli subsidiary, Israel Energy Initiatives (IEI), and a joint venture with France’s Total to produce shale oil in the U.S. state of Colorado, said it believes the southern Golan contains “significant quantities of conventional oil and gas in relatively tight formations”.

It’s not clear whether the licence approval may have been affected by the political clout and sympathies of the Strategic Advisory Board members, such as Cheney who was a staunch advocate of Israel’s rightist governments during his vice-presidency from 2001 to 2009.

Murdoch’s media empire, which includes Fox News and the Wall Street Journal, has also been a reliable advocate of Netanyahu’s Likud Party positions over the past 15 years, and particularly since 9/11. Until he sold it several years ago, Murdoch also financed William Kristol’s “Weekly Standard”, a hard-line neo-conservative journal.

Steinhardt provided major funding for the Foundation for the Defense of the Democracy (FDD), a particularly hawkish lobby group whose views are close to those of the Likud Party, from its launch just a few days after 9/11 until at least 2008, according to tax records.

Like Cheney and Murdoch’s U.S. publications, FDD championed the Iraq invasion and, in more recent years, has played an important role in drafting and lobbying for draconian sanctions against Iran.

He also co-founded and has donated millions of dollars to Birthright Israel, a programme that provides 10-day, all-expenses-paid trips to Israel to tens of thousands young Jews from around the world each year. In an interview with U.S. journalist Max Blumenthal at a Birthright rally and dance in Israel last year, Steinhardt insisted that “there was no Palestinian people.”

*Jim Lobe’s blog on U.S. foreign policy

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* Genie Energy Ltd. is headed by Effi Eitam (Philip Weiss – Mondoweiss)