Earlier this month, India experienced the first significant terrorist attack within its borders since the horrific events of November 26, 2008 (“26/11”). Although no conclusive evidence of perpetrators has been found to date and clues strongly suggest homegrown elements, the news clips, blogospheres, and twitter-universe were abuzz with conjectures on what India’s actions would and should be if the roots of the attacks had been once again found to be in Pakistan. In the same week, on the other side of the continent, Israel launched air strikes into the Gaza Strip in retaliation for missile strikes by the Palestinians. (There was no need for similar conjectures to take place. It is well established that when Israel is attacked, it strikes back.)

Parallels are often made between India and Israel, especially in regards to their mutual concern of external threats from neighboring areas permeating their borders. These mutual concerns are very real – leading India and Israel to build up their intelligence and defense collaboration since the establishment of official diplomatic relations in 1992. Israel is India’s second largest arms supplier after Russia, and there is increased trade between the two growing economies in areas such as technology, education and agriculture. Israel’s largest embassy in Asia is located in India, recently expanding their presence through a new Consulate General in India’s high tech city of Bangalore. India also occupies the largest portion of the budget in Israel’s International Development Agency. Ties within the diaspora communities are also notable. In the U.S., the American Israeli Political Action Committee (AIPAC) is often used as a role model for the Indian-American community, as it aspires for increased political clout. However, real complexities in the relationship remain, begging the question of whether it is possible for India and Israel to ever truly be economic and political allies, even as they serve as bookends for the world’s most unstable region.

The most glaring complexity in the India-Israel relationship rests in India’s continued support for the creation of a Palestinian state, a stand that it has maintained since 1947. India was the first non-Arab country to recognize the Palestine Liberation Organization’s authority and has publicly called on Israel to end expansion of its settlements into Palestinian territories. India emphasized its position as recently as last week, when the country’s envoy to the United Nations (UN), Hardeep Singh Puri, told the Security Council that “putting a stop to settlement activities should be the first step” in the Israeli-Palestinian peace process and warning that “unless this essential step is taken and peace talks resume, the growing desperation may lead the parties to actions that can spiral out of control.” Furthermore, there is no reason to expect that India will not align itself with the anticipated majority voting in favor of Palestinian statehood during the upcoming General Assembly resolution vote in the UN. (It can also be noted that the Indian Embassy remains located in Tel Aviv, rather than Israel’s capital of Jerusalem.)

However, India’s activities with Israel’s foes do not stop with support for the Palestinians. India maintains economic ties with states in the region that are expressly against Israel’s policies and even existence, most notably, Iran. Iran is the second largest crude supplier to India after Saudi Arabia and accounts for about 12% of India’s annual oil needs. In addition, India and Iran have conducted joint discussions on Afghanistan. Although India has rejected Iran’s nuclear ambitions and has restricted the transfer of funds through the Asian Clearing Union (ACU), there are no indications that India will completely cut relations with Iran due to not only strong oil interests, but also deep cultural and historic ties.

Israel also faces, as it does in other countries, a public relations challenge in India. Although young Israelis, after finishing their mandatory military service, vacation in India in throngs, and India is notably one of the only countries in the world that has not had a history of persecution of its Jewish population, the Israeli Government does not yet command strong support from the Indian population. A 2011 poll conducted by BBC showed Indians being divided in their support for Israel’s influence in the world, with 18% having a mainly negative perception and 21% viewing it as mainly positive. (A majority of Indians, 61% according to this poll, were either neutral or unsure.) Similar to its support base in the United States, the Israeli Government often aligns itself more closely with right wing elements within the Indian Government, such as the Bharatiya Janata Party (BJP). In addition, more extreme “Hindutva” elements, such as Rashtriya Swayamsevak Sangh (RSS) and Vishwa Hindu Parishad (VHP) parties, are vocal proponents of stronger India-Israel relations, and have advocated using Israel retaliation towards Palestinian attacks as a model for how the Indian Government should respond when attacked by Pakistan based militants. The Israeli Government, however, seems to recognize the public image challenge. In a confidential U.S. State Department cable from 2008, released by Wikileaks, it was reported that Israel was “taking steps to create a shinier image of itself as a friend of the Indian people, to match its image as India’s premier supplier of defense technology.”

In an increasingly tense neighborhood, Israel is in need of more allies than ever. And, as India asserts its role as a regional and global power, its relationship with Israel will be vital. The relationship, however, is unlikely to be at the expense of its ties to other parts of the Middle East and its support for the recognition of the Palestinian cause, which the Israeli Government realizes. This leads to a tricky balancing act, but one that hasn’t been attempted before. As another Wikileak released cable indicated, “As India’s strategic horizon expands there is a growing perception in New Delhi that if Arab nations like Jordan can keep their traditional ties with the Palestinians intact and at the same time build up new relations with Israel, India can do the same.”

In its own dispute with Pakistan over Kashmir, India is, at least publicly, against third party intervention. However, there may be an intermediary role for India across the continent that neither Europe nor the U.S. can employ as effectively. These countries’ deep historical interventions and occupations in the region have led to perceptions of them being non-objective actors in the peace process. India has the unique ability to utilize its growing global and regional influence, strengthened alliance with Israel and its continued support for the Palestinians, to discreetly encourage further dialogue that helps push the two sides closer to an acceptable compromise. This could lead to much needed, and thus far elusive, stability in the region.

Shikha Bhatnagar is the Associate Director of the South Asia Center at the Atlantic Council.