Should a country ever sacrifice fundamental principles for the sake of its national economic interest?
This question has been raised in Israel over a landmark court case brought by families of suicide bomb victims against the Bank of China. The families accuse it of serving as a key conduit for money transfers to Hamas and Islamic Jihad through its branches in the US.

Although the Israel government initially aided the case against the bank, it has now blocked a key witness, ex-counter-terrorism agent Uzi Shaya, from testifying.

Shaya’s evidence is crucial because he was part of a delegation who warned the Chinese in 2005 that Hamas and Islamic jihad were transferring large sums through the Bank of China, something the bank denied knowing until years later.

The Israel government, however, says his evidence would reveal state secrets, and that sovereign immunity protects its officials from having to testify in foreign courts.

This excuse, however, doesn’t stack up. Shaya’s evidence is said to be already in the public domain. And other Israeli officials have given evidence in foreign counter-terrorism cases.

Netanyahu started to wobble last spring

Much more plausible is the suspicion that Prime Minister Netanyahu caved into Chinese threats to block trade links in retaliation, a tactic it regularly employs to stifle international criticism.

Israeli media claim Netanyahu started to wobble last spring when he led a trade delegation to China, which threatened to cancel the visit if he allowed Shaya to testify.

So was he wrong to block Shaya’s evidence? Understandably, the general reaction has been outrage at abandoning Israeli terror victims.

But is it really that simple?

The controversy is reminiscent of the 2006 decision by Britain’s Serious Fraud Office to terminate a corruption probe into an arms deal with Saudi Arabia, after pressure from the Blair government.

But unlike that case, which was halted, the China case can still go ahead, albeit under greater difficulty. There are now plans to subpoena Stuart Levey, a former US Treasury official who is said to possess evidence showing Bank of China accounts were used by Hamas to fund operatives in Gaza.

Some of the reported outrage strikes a jarring note. Those Americans – including American Jews – who are jumping up and down over Netanyahu caving in to Chinese blackmail, might better direct their ire at their own president, who is bullying Israel into yielding to Palestinian aggression, not to mention trying to sell it down the river to the genocidal fanatics in Tehran.

And British journalists who normally champion the Palestinian “resistance” are suddenly indignant with Netanyahu for blocking this action to thwart that violence. Who knew they cared so much about Israeli terror victims, whose murders they don’t even bother to report?

For Israel’s part, trade links with China are not lightly to be tossed aside. Israel is forced to make economic and other ties where it can.

This itself prompts qualms. Surely Israel should not be seeking links with countries which violate human rights and whose hands are even stained with Israeli blood?

Once you mount that particular high horse, however, you find it starts galloping out of control. For China is not the only country to turn a blind eye to the funding of Arab terrorism. Exactly the same claim could be made against Britain for hosting groups which provide a financial conduit for Hamas and similar terrorist groups.
Israel finds itself, as ever, trapped between a rock and a hard place. And as ever, others rush to easy judgment.