Israel is a unique partner in terms of the development of military technology
Since the establishment of diplomatic relations, Azerbaijan has bought surface-to-air missiles, rocket launchers, communications equipment, drones, mortars and ammunition military satellites from Israel. Israeli firms have upgraded Azerbaijan's Soviet-era T-72 tanks, and one Israeli firm, Aeronautics Defense Systems, has constructed a factory producing surveillance drones. Back in the '90s, Azerbaijan's only access to modern military technologies was via Israel, as was Turkey's (although Ankara also had access to the American market). The only other source was -- and is -- post-Soviet states (Ukraine, Russia and Belarus), but they produce old, Soviet-type weapons rather than modern technologies. Between 1993 and March 2002, the US State Department banned arms sales to Azerbaijan and after that, the main military aid from US was limited to maritime efforts. While Western countries have been reluctant to sell ground combat systems for fear of encouraging Azerbaijan to resort to war to liberate Armenian-occupied territories, Israel has been free to make substantial arms sales and benefits greatly from these deals.
Military cooperation -- not against Iran, nor an 'immediate deal'
In late February of this year, Israeli officials confirmed an arms deal worth $1.6 billion with Azerbaijan, which included drones as well as anti-aircraft and missile defense systems. This created a sensation with some observers claiming that Israel was buying the right to use an airbase in Azerbaijan; Tehran called this sale an anti-Iranian provocation. Interestingly, the Turkish media also quoted anonymous foreign ministry officials, cited the London-based International Institute for Security Studies' publication, “Military Balance 2012,” as saying that Azerbaijan's airbases were not sufficiently developed for military use, indeed, that “the air forces suffer from training and maintenance problems” (Military Balance 2012, p. 92).
According to the report's strategy page (“What Israel Sent to Azerbaijan”), Israel sold Azerbaijan Gabriel anti-ship missiles, which will be used to protect the Caspian coast. In terms of air defense, it claims that Baku also bought Barak-8 systems, including 75 missiles, and the Green Pine radar system, which can detect incoming ballistic missiles up to 500 kilometers away and spot approaching warplanes. Obviously, if this is true, these arms purchases are defense oriented. Military experts know that billion dollar arms deals like this one take months, even years, to prepare, and that it is impossible to negotiate and conclude such a deal in a matter of weeks unless there are deep strategic connections that pre-date the deal, and thus it is hard to argue that the deal was a deliberate maneuver against Iran. Not all of the details cited in the report are true, though it is the case that Azerbaijan and Israel have long shared intelligence reporting.
Azerbaijan maintains alliance without opening an embassy
Since the establishment of diplomatic relations with Israel, Azerbaijan has been concerned about objections by the Muslim world. Mainly out of reluctance to threaten relations with Iran, Baku has not opened an embassy in Israel and has only unofficial representation for its national airline, AZAL. Despite this, Azerbaijan has no history of anti-Semitism, and Baku, its capital city, was one of the centers of the Lovers of Zion (created here in 1891), followed by the first Zionist organization in 1899. The Jewish community is an important factor in Azerbaijan's economic and diplomatic relations, not only with Israel but also with the US. There are more than 20,000 Jews living in Azerbaijan, and many more have emigrated to Israel, representing the Azerbaijani Diaspora there.
Israel utilizes differing views of Turkey and Azerbaijan on the Iranian issue
It would not be wrong to say that Israel fears that due to its strategic partnership with Turkey, Azerbaijan will decrease its relations with Tel-Aviv; Azerbaijan has supported Turkey's position over Israel's many times. For instance, Azerbaijani President Ilham Aliyev criticized Israel for the attack on the Turkish ship Mavi Marmara in 2010. Meanwhile, Turkey is trying to act as a mediator between Iran and 5+1 countries, and at the same time, Iran is supporting fundamentalist elements in Azerbaijan. Ankara and Baku are diverging on the Iranian issue, and in this regard some observers think that Azerbaijan is asserting its independence from Turkey, and that's why Baku is deepening relations with Israel, whereby Tel-Aviv can serve as a security guarantor. As Karim Sadjadpour, associate at the Carnegie Endowment for International Peace, has pointed out, “even the regime hates the regime in Iran.” In this regard, the Iranian regime is trying to transfer the information battle to the Caucasus, while also trying to influence the domestic situations in neighboring countries, which increases antipathy towards Tehran and also Ankara, following its faith in Tehran's assertions that its nuclear program is exclusively for civilian purposes.
Azerbaijan as a potential mediator between Ankara and Tel Aviv
In spite of worsening relations between Turkey and Israel, Baku can only pursue its policy of balance until one of the sides -- Turkey or Israel -- takes radical steps, which will force Azerbaijan to choose. Right now, good relations between Baku and Tel-Aviv are partially aligned with Ankara's, as Turkey's friendship with Baku prevents Tel-Aviv from approaching the Armenian lobby. Given that Azerbaijan has the trust of both sides, it could play a significant role in normalizing relations and improving Azerbaijan's position in the international arena as a neutral broker. Mediation has its own risks, but there is a possibility that Israel, worried about further deterioration of its relationship with Ankara, will leave such tasks to Baku. However, some observers remain pessimistic, arguing that if Washington hasn't been able to normalize Israel-Turkey relations, Baku has even less chance.
In any event: Israel cannot replace Turkey in terms of strategic importance for Azerbaijan; while Israel-Azerbaijan relations may become stronger due to the Iran situation, but the main motivation for Turkey and Azerbaijan must be rational policy, and taking “the right side of history.”