After Hitler had became Chancellor in 1933, outraged Jews worldwide had quickly launched an economic boycott, hoping to bring Germany to its knees, with London’s Daily Express famously running the banner headline “JUDEA DECLARES WAR ON GERMANY.” Jewish political and economic influence, then just like now, was very considerable, and in the depths of the Great Depression, impoverished Germany needed to export or die, so a large scale boycott in major German markets posed a potentially serious threat. But this exact situation provided Zionist groups with an excellent opportunity to offer the Germans a means of breaking that trade embargo, and they demanded favorable terms for the export of high-quality German manufactured goods to Palestine, together with accompanying German Jews. Once word of this major Ha’avara or “Transfer Agreement” with the Nazis came out at a 1933 Zionist Convention, many Jews and Zionists were outraged, and it led to various political splits and controversies. But the economic deal was too good to resist, and it went forward and quickly grew.

The importance of the Nazi-Zionist pact for Israel’s establishment is difficult to overstate. According to a 1974 analysis in “Jewish Frontier” cited by Brenner, between 1933 and 1939 over 60% of all the investment in Jewish Palestine came from Nazi Germany. The worldwide impoverishment of the Great Depression had drastically reduced ongoing Jewish financial support from all other sources, and Brenner reasonably suggested that without Hitler’s financial backing, the nascent Jewish colony, so tiny and fragile, might easily have shriveled up and died during that difficult period.

In 1934, Zionist leaders invited an important SS official to spend six months visiting the Jewish settlement in Palestine, and upon his return, his very favorable impressions of the growing Zionist enterprise were published in Joseph Goebbel’s “Der Angriff“, the flagship media organ of the Nazi Party in Berlin, with that massive 12-part series bearing the descriptive title “A Nazi Goes to Palestine.” The Nazi newspaper even struck a commemorative medal in honor of the partnership, with a Star-of-David on the front face and a Swastika on the obverse.

Once war broke out in 1939, trade relations between Nazi Germany and British-ruled Palestine were immediately severed, so the economic partnership between Hitler’s Germany and the main Zionist movement necessarily came to an end. But around that same time, an even more surprising relationship developed.
From its earliest origins, the mainstream Zionist movement led by Israel’s founding Prime Minister David Ben-Gurion had always had leftist roots and a Marxist ideology, but during the early 1930s there also appeared smaller, rightwing Zionist factions. These eventually gave rise to the Likud Party that currently governs Israel, and their early leaders of that era included future Israeli Prime Ministers Menachem Begin and Yitzhak Shamir.

Rather than Marxism, these factions drew their political inspiration from Mussolini’s Fascist Italy and Hitler’s Nazi Germany, with one of their top ideologists even writing a weekly newspaper column under the heading “Diary of a Fascist.” Thus, it was not entirely surprising that after World War II broke out, Shamir’s small Zionist faction made repeated attempts during 1940 and 1941 to enlist in the Axis Powers as their Palestine affiliate. Shamir offered to undertake a campaign of sabotage attacks and espionage against the local British forces, hoping to share in the political booty after Hitler’s inevitable triumph.