Israeli-Austrian relations were uniquely free of the usual concerns of Israeli foreign policy relating to the Arab-Israeli conflict, but were overshadowed by the legacy of WW II and the Holocaust. Austria’s proximity to the Soviet bloc and to the 2–3 million Jews behind the Iron Curtain made it a valuable base for Israeli intelligence activities directed to Eastern Europe. Nevertheless, Israel rejected Austria’s repeated requested to upgrade the level of formal ties between the two countries, despite the diplomatic immunity that such upgrading would have provided. Israel’s Ministry of Foreign Affairs was not prepared to accede to Austria’s request until the Austrian state concluded an agreement with the Viennese Jewish community and with the Conference for Jewish Material Claims Against Austria for elementary compensation to the victims of Nazi persecution in that country. Only after an agreement was signed, in 1956, did Israel agree to move from consular to diplomatic representation.