Qatar reportedly blocked a proposed strategic partnership between German automaker Volkswagen and Israeli defense company Rafael, according to a report by the German newspaper Bild.

While Rafael is best known for developing advanced Israeli defense systems, including the Iron Dome air defense system, the state-owned company also develops civilian technologies, including cybersecurity solutions for connected vehicles and autonomous driving systems. Volkswagen was reportedly interested in incorporating those technologies into its vehicles.

According to the report, the proposed agreement required approval from Volkswagen’s board of directors. Qatar, through the Qatar Investment Authority (QIA), is one of Volkswagen’s largest shareholders, controlling approximately 17% of the company’s voting rights and holding seats on the automaker’s supervisory board.

Bild reported that when the proposed partnership with Rafael came before the board, the Qatari representatives strongly opposed any cooperation or contract with the Israeli company.

The report says Qatar specifically objected to Rafael’s role as the developer and manufacturer of the Iron Dome missile defense system and other military technologies used by the IDF.

According to the report, Volkswagen ultimately withdrew from the negotiations after the objections raised by the Qatari representatives, canceling the proposed agreement to avoid a confrontation with one of its most influential investors.

The Bild investigation has sparked discussion in Germany, with critics arguing that foreign state investment is influencing the business decisions of major German corporations. The report also renewed scrutiny of Qatar over its financial support for Hamas and raised concerns that Israeli companies are effectively being excluded from commercial partnerships because of their ties to Israel’s defense industry.

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