In the early 1970s, Israel was on the cusp of launching an ambitious nuclear power programme. It had technical nuclear experience and a pressing need to limit its dependency on imported oil and coal, and interest in nuclear powered water desalination. This nuclear vision enjoyed the support of the Nixon administration, which proposed in June 1974 to export reactors to both Israel and Egypt. But by the end of the decade, under the Carter administration, the plan was all but gone. What was the original US and Israeli rationale behind the reactor deal? How did this initiative relate to other developments such as the Indian nuclear explosion, the Arab oil embargo and the peace talks with Egypt? How important was the Carter administration’s policy shift in determining the outcome of the initiative? This paper will address these questions by analysing newly declassified documents from several US and Israeli archives.