>most contracts have a provision about not contradicting the law
But is there an Israeli law that states contracts must be in concordance with foreign law... When the damages of an Israeli contract get evaluated in an Israeli court and they include the loss of Israeli intelligence assets will the costs not be significant? Yes google can pull out of Israel but they literally built datacentres there for these contracts so there are sizeable seizable assets.
And yes google may also get fined for breaking foreign law by foreign courts. The question is if the architecture of the system is set up so the only way data can be "secretly" exfiltrated by other governments is to go through local Israeli employees and they're the one's breaking the foreign law (and they were told explicitly by foreign bosses that they can't share this information wink) is there any punishment for google other than fines dwarfed by the contract and having to fire an employee who is strangely ok with that, who is replaced by a equally helpful local employee.
I think it'd be unlikely for the Israeli government to try and push this issue. Yes, Google has assets within Israel that could be seized, but it'd be a bit of a disaster. Israel would be creating a scenario where it told companies: go to prison in your home country or we'll seize everything you've invested here.
Also, I can't believe that Google or Amazon would sign a contract that doesn't specify the judicial jurisdiction. If the contract says "this contract will be governed by the courts of Santa Clara County California" and the Israelis agreed to that, then they won't have a claim in Israeli courts. If an Israeli court concluded that they have jurisdiction when both parties agreed they don't have jurisdiction, it'd create a very problematic precedent for doing business with Israeli companies.
Even if an Israeli court would ignore all that, what would Israel get? Maybe it could seize a billion in assets within Israel, but would that be worth it? For Google or Amazon, they face steeper penalties in the US and Europe for various things. For Israel, maybe they'd be able to seize an amount of assets equivalent to 10% of their annual military budget. So while it's not a small sum, it is a small sum relative to the parties' sizes. Neither would really win or lose from the amount of money in play.
But Israel would lose big time if it went that route. It would guarantee that no one would sign another cloud deal with them once the existing contracts expired. Investment in Israel would fall off a cliff as companies worried that Israeli courts would simply ignore anything they didn't like.
The point of these agreements is that Israel needs access to cloud resources. The primary objective is probably to avoid getting cut off like Microsoft did to them. That part of the contract is likely enforceable (IANAL): Israel does something against the ToS, but they can't be cut off. I'd guess that's the thing that Israel really wanted out of these deals.
The "wink" was probably a hopeful long shot that they never expected to work. But they got what they needed: Amazon and Google can't cut them off regardless of shareholder pressure or what they're doing with the cloud no matter what anyone thinks of it. Suing Amazon or Google over a part of the contract that they knew was never going to happen would jeopardize their actual objective: stable, continued access to cloud resources.
Sorry I didn't mean to imply I expected it would degrade to such a point that Israel is actually seizing the assets, it's more I'm pointing out that there's a credible threat of sizeable costs. Compounded with that the real teeth of the espionage laws outside of Israel will be in imprisonment which won't likely apply in these cases if the principal actors are Israeli citizens and the people subject to the foreign law are "doing all they can" to go along espionage orders once they receive one. The point is to get the contract in place in such a way that those who can get punished in a jurisdiction have plausible deniability and profitability to absorb any likely financial penalty by foreign actors. So that everyone just goes along with it as they're not breaking any laws at the time and then later they know their best efforts will be futile.
The Cloud doesn't just mean foreign data centers it means 3rd party infrastructure and expertise, which in this case at least, some of is local to the country. The point is that any 'secret' surveillance is reported. I.e. person in US gets ordered to access data, they connect to data center with appropriate credentials, which is monitored and either questioned and billed, or get flagged locally as not reportable and so not logged (making it show up on the shadow logs installed by local Israeli intelligence assets). Foreign employees best efforts to comply with espionage orders still reveal their actions and local employees happily obey local reporting laws knowing they are outside of those jurisdictions and helping their country.
Yes it can be forced to fall apart, but it has to be done in the open (because it will require changing local data center operations) and will be time consuming unless an actual open order by the US to immediately stop working with Israel on this which is extremely unlikely to happen.