Israeli newspaper "Makor Rishon" reported on December 28, 2012 that Dermer's name was being floated as a potential replacement for Michael Oren, Israel's Ambassador to the United States. The Prime Minister's Office declined to comment on the report and the Embassy of Israel in Washington spokesman called the report "baseless." In March 2013, Dermer left the Prime Minister's Office after four years as Netanyahu's senior adviser. On July 9, 2013 the Prime Minister's office announced that Dermer would replace Oren as Israel's ambassador to the United States.