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At the beginning of the excerpt concerning the establishment of “Young Israel” the motivation of Lord Palmerston is described in terms of French diplomacy gaining a march on the British by being regarded as the protector of Catholic rights in the region. My reading is that it was more an anti Russian move. The move to establish a British consulate in Jerusalem pre dates the French military operation of 1840. The British consulate in Egypt which covered Palestine at the time notified Palmerston in 1836 of the sending of valuable gifts to the region from the Russians to the Greek Church in the Holy Sepulchre. This news really caught Palmerston’s attention towards Russia’s activities in the region, leading him to note “it would be expedient to have an English consular agent in Jerusalem.”

In 1841 an Anglo Prussian agreement to establish a Protestant bishopric was agreed which was a move to convert both Jews and Orthodox/Catholic in Jerusalem to Protestantism and establish a foothold for a colony. This was a move against both Russian and French influence and wasn’t for the purposes of protecting Jewish interests, though it may have become that in part due to a wave of emigration by Russian Jews. The Russians did not establish a consulate and instead encouraged Russian Jews in Jerusalem to change their allegiance to the British in order to obtain consular protection.

I think much of what transpired was driven by reaction to events and hedging bets rather than any grand plan. Due to debt the Ottoman Empire was beginning to open up to other trading interests. The region became much more important with the discovery of oil and the subsequent race to get rights for oil exploration from the Ottoman Empire which aligned with the bankers interests and by that time, the Jewish zionists.

A good source of information on restoration and the emergence of Zionism and the diplomatic manoeuvres of the big players is Lucien Wolf - “Notes on the Diplomatic History of the Jewish Question” (1918), which is free to read on Project Gutenberg.

Aside - This book contains an interesting secret communication between the Russian and German governments regarding their suspicions about international and Jewish conspiracy to overthrow the Russian government. This coincides with the secret Bjorko pact that was being negotiated between Russia and Germany pre WW1.

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