Chapter 1 examines Israel’s foreign policy response to the end of the Cold War. It analyses events such as the 1991 Gulf War and the ensuing Madrid peace conference. It explains how domestic factors drove Israel to adopt a foreign policy of entrenchment amid events related to the end of the Cold War. This stance hinged on basing Israel’s regional foreign policy on its iron wall of military might rather than on diplomacy, and making peace with the Arab world in exchange for peace, not territory. The Palestinians residing in the West Bank and Gaza Strip, which Israel had captured during the 1967 Arab-Israeli war, would be granted limited autonomy, but remain under Israeli military occupation.The chapter engages with and adds to the literature on specific episodes including Israel’s response to the immediate aftermath of the Cold War, the 1991 Gulf War, and the Madrid peace conference.