Following the election of Iranian President Hassan Rouhani last August, Iranian-American relations now appear set for a major breakthrough, overturning more than three decades of enmity between the two sides. Such a breakthrough, should it come to pass, has the potential to completely transform the bilateral relations over a number of issues, including most importantly the Iranian nuclear program, Iran’s regional role and its involvement in the Middle East’s “hot button” issues, including in the Gulf. The eventual success of efforts to bring Iran and the United States closer together, however, relies also on the roles played by regional players, particularly Israel. This paper explores the reasons behind Israeli anxiety surrounding a potential breakthrough in Iranian-American relations, and Tel Aviv’s ability to influence the outcome of a possible agreement over Iran’s nuclear program and whether such an agreement shall extend to Iran’s regional influence.