Fdd's overnight brief

Israel

The world’s Arab countries for the first time have joined unanimously in the call for Hamas to lay down its weapons, release all hostages and end its rule of the Gaza Strip, conditions that they said could help the establishment of a Palestinian state. – New York Times

The U.S. imposed sanctions on Palestinian Authority officials and members of the Palestine Liberation Organization on Thursday, accusing them of undermining peace efforts with Israel even as other Western powers moved toward recognition of Palestinian statehood. – Reuters

Portugal’s centre-right government will consult the main political parties and conservative President Marcelo Rebelo de Sousa about the potential recognition of a Palestinian state, Prime Minister Luis Montenegro said on Thursday. – Reuters

Senior Trump administration officials told Congress this month that Israel agreed to match a U.S. award of $30 million to the Gaza Humanitarian Foundation, two sources familiar with the matter told Reuters, a previously unreported contribution to the controversial armed private aid operation. – Reuters

Israel is evacuating most of its diplomatic mission staff in the United Arab Emirates, Israeli media reported late on Thursday, after Israel’s National Security Council sharpened its travel warning for Israelis staying in the Gulf country. – Reuters

Slovenia on Thursday imposed an embargo on exports, imports and transit of arms to Israel, two weeks after it declared Israeli ministers persona non grata, the state news agency STA reported citing a government statement. – Reuters

Germany’s foreign minister said on Thursday recognition of a Palestinian state should come at the end of talks on a two-state solution but Berlin would respond to any unilateral actions, after citing “annexation threats” by some Israeli ministers. – Reuters

The Trump administration is chastising Western allies who are preparing to recognize Palestinian statehood in response to the heightening humanitarian crisis in the region, cranking up criticism after President Donald Trump initially brushed off the push. – Bloomberg

Sweden on Thursday became the latest EU member country to publicly call for the suspension of the trade component of the bloc’s association agreement with Israel, as humanitarian conditions in Gaza continue to deteriorate. – Politico

National Security Minister Itamar Ben-Gvir accused Germany on Thursday of  “once again supporting Nazism” as Berlin’s Foreign Minister Johann Wadephul was visiting Israel, drawing the rebuke of Foreign Minister Gideon Sa’ar. – Jerusalem Post

Israel is considering expanding its offensive on Gaza after negotiations for a ceasefire and hostage release deal appear beyond reach. In a briefing to reporters, a “senior Israeli official’ said Hamas was refusing to move from its current demands and Israel has run out of patience. – Ynet

Editorial: “October 7 didn’t happen because Palestinians were denied a state; it happened because they were given one,” Mosab Hassan Yousef, more famously known as Son of Hamas, wrote on social media Wednesday morning. Perhaps he has a point. Gaza has been Israeli-free (barring hostages) for nearly 20 years, and all it led to was war after war culminating in October 7. If the world wants peace, there is a path. Pressure Hamas to surrender, release all hostages, disarm, and allow international and Palestinian moderates to rebuild. But instead, the West is once more leaning on Israel, urging restraint while offering incentives to the aggressors. – Jerusalem Post

Nachum Kaplan writes: There is even more at the prototype stage, such as the Carmel armored fighting vehicle that IAI and Israel’s Ministry of Defense is developing. It will integrate artificial intelligence and autonomous capabilities, enhancing the vehicle’s situational awareness. This is not just an economic boon for Israel, but a strategic one. It aligns Israel’s economic success with its strategic defense needs, and entwines other countries defense needs to Israel’s fortunes. This provides something of a strategic bulwark against diplomatic fallouts in Israel’s foreign relations. – Arutz Sheva

Russia and Ukraine

Anton Tymoshenko, a popular Ukrainian comedian, pressed into the protest crowd here last week holding a speaker above his head playing the voice of another humorist—the one who is now Ukraine’s president. – Wall Street Journal

President Trump’s sudden turn against Russia has been met with skepticism from officials in his administration and European capitals who say he has done little since returning to office to punish the Kremlin for failing to end its war on Ukraine. – Wall Street Journal

The Senate’s Republican-led Appropriations Committee is recommending a major increase in Ukraine aid in next year’s defense budget, rejecting the Trump administration’s bid to defund a long-term supply of weapons critical to the country’s self-defense. – Washington Post

Ukraine’s parliament approved legislation Thursday restoring the independence of the country’s two main government anti-corruption bodies — a move demanded by Kyiv’s international partners as well as tens of thousands of enraged Ukrainians who protested on the streets of the capital and other cities. – Washington Post

U.S. President Donald Trump on Thursday sharply criticized Russia’s “disgusting” behavior against Ukraine and said he plans to impose sanctions on Moscow if no agreement can be reached. – Reuters

The Russian government has developed a far-reaching, multi-level approach to turbocharge the country’s development and production of drones with an eye to becoming a world leader in the field. The comprehensive strategy includes large amounts of federal and state funding, thousands of startups and even the systematic training of schoolchildren. – Defense News

Benjamin Jensen, Yasir Atalan, and Erik Tiersten-Nyman write: Ultimately, defense is more than stopping drones or missiles. Equally crucial is contesting the narrative. By combining directed-energy systems, layered sensors, diverse interceptors, resilient infrastructure, and real-time tracking, Ukraine can turn Russia’s salvo strategy from an overwhelming tide into a manageable, contested fight—and in doing so, regain the strategic initiative in the skies. – Center for Strategic and International Studies

Colin Cleary writes: Vladimir Putin is an avowed enemy of the United States who has used all levers of power to undermine US national security and threaten the physical existence of the American people. Putin’s Russia, not Xi’s China, thus poses the most immediate danger to the United States homeland. For that reason, it is incumbent on US leaders to make stopping Putin priority number one. Success in this regard will strengthen America’s ability to meet the long-term multi-sectoral challenges posed by China. It is also the best hope for keeping the “rules-based international order”—or whatever remains of it—alive. – National Interest

Korean Peninsula

South Korea’s exports rose for the second straight month in July, beating market expectations on strong chip demand and shipments being moved forward ahead of higher U.S. tariffs, which are expected to weigh in the second half of the year. – Reuters

South Korea’s government put forward plans on Thursday to roll back recently imposed tax cuts, such as those on corporate income and stock investments, as the country’s new leader seeks an expansionary fiscal policy to support an economic recovery. – Reuters

South Korea and the United States said they reached a deal  that would set U.S. tariffs on most South Korean goods at 15% in return for $350 billion in investment in the U.S. – Reuters

South Asia

In June, India’s election commission gave officials in the eastern state of Bihar a monumental task: verify that each of the state’s 80 million registered voters is an Indian citizen, then upload the paperwork to prove it. – Washington Post

When President Trump slammed India this week for purchasing large amounts of Russian oil, threatening a “penalty” tariff on top of a 25 percent levy, it came like a lightning bolt. India has been a leading and conspicuous buyer of Russian energy since the invasion of Ukraine three years ago, as most Western countries curtailed their purchases or stopped buying altogether. – New York Times

A Pakistani anti-terrorism court on Thursday sentenced more than 100 members of jailed former Prime Minister Imran Khan’s party to prison terms on charges related to riots that targeted military sites in 2023, a court order said. – Reuters

Differences between the U.S. and India cannot be resolved overnight to arrive at a trade deal, a senior U.S. official told reporters late on Thursday, citing geopolitical disagreements. – Reuters

Richard H. Carmona writes: We must cut through the bureaucratic red tape that has kept too many stranded in limbo. And we must provide them with the protection, resettlement and dignity they have earned through their sacrifice. If we fail to act now, the consequences will be written, not just in history books, but in the blood of those we left behind. We must ask ourselves what kind of nation we wish to be — and whether we are willing to live up to the values we so often espouse. The world is watching, and so are the ghosts of our past. – The Hill

Europe

The European Union expects that wine and spirits exported to the U.S. will face a 15% tariff from Friday, a spokesman said as the clock runs down for U.S. levies on the bloc to kick in. – Wall Street Journal

A former Islamic State fighter who stood guard while a Jordanian pilot was burned alive a decade ago was sentenced to life in prison in a Swedish court on Thursday after being convicted of committing a war crime. – New York Times

Lithuania’s prime minister, Gintautas Paluckas, stepped down on Thursday, yielding to growing pressure over his business dealings and those of his family. – New York Times

Romania will be able to draw roughly 21.6 billion euros ($24.65 billion) worth of EU recovery funds after it concluded negotiations with Brussels on required reforms and deadlines, EU Funds Minister Dragos Pislaru said on Thursday. – Reuters

Poland, Ukraine’s western neighbour, is expected to be the last country in Europe to face U.S. troop reductions, Poland’s top defence official said, as Washington weighs scaling back its military presence across the continent. – Reuters

A terrorism court in France has ordered six suspected Palestinian militants to go on trial for an attack 43 years ago at a Jewish restaurant and deli in Paris that killed six people, a lawyer said Thursday. – Associated Press

Key political figures in historically neutral Austria have reignited a debate about the country’s future relationship with NATO and whether Vienna might be better off joining the alliance. – Defense News

Italian defense giant Leonardo has agreed to buy Italy’s Iveco Defence Vehicles for €1.7 billion ($1.9 billion), ending months of speculation about the future of the up-for-sale military vehicle maker. – Defense News

Gary Willig writes: By insisting on recognizing a Palestinian Arab state while Hamas continues to govern Gaza and while Hamas continues to hold hostages, Britain and France have declared that the lives of the hostages are cheap. They have declared that the lives of all of the innocent people who were butchered on October 7 were cheap. They have declared that the life of every Jewish child in Israel is cheap. They have declared that the lives of their own Jewish citizens are cheap, as they have added more fuel to the fire of the violent antisemitism raging across their nations. – Arutz Sheva

Michael Rubin writes: While Cyprus plays the long game, Washington’s concept of commitment and strategy seldom exceeds four years. American officials might make the right promises, but credibility and commitment are substantive rather than rhetorical concepts. In the long-term, Cyprus’ brand is far too important for peace and security than to be squandered on an ill-thought-out scheme plan. – Hellas Journal

The Americas

El Salvador’s ruling-party legislators pushed through constitutional changes eliminating presidential term limits and allowing President Nayib Bukele, who is serving his second term, to run an unlimited number of times. – Wall Street Journal

President Donald Trump said early Thursday it would be “very hard” to reach a trade deal with Canada after the country said it planned to recognize a Palestinian state — throwing talks with Ottawa into question one day before higher U.S. tariffs are set to come into force. – Washington Post

While President Donald Trump has hiked visa fees for travelers to the United States from dozens of countries and imposed travel bans on nearly 20, he appears to be ready to make an exception for a key friend: Argentine leader Javier Milei, the chain saw-wielding libertarian who attended Trump’s inauguration and who Trump reportedly said was his “favorite president.” – Washington Post

Brazilian banks are scrambling to assess the domestic fallout from sweeping U.S. sanctions against a Supreme Court justice who oversees a criminal trial against an ally of President Donald Trump, as legal teams weigh how the move to isolate the judge financially could ripple through Brazil’s financial system. – Reuters

Approval for Brazilian President Luiz Inacio Lula da Silva exceeded disapproval for the first time in nine months, a poll showed on Thursday, against a backdrop of a growing dispute with Washington. – Reuters

The International Monetary Fund board on Thursday completed its first review of the $20 billion program with Argentina, approving a disbursement of approximately $2 billion. – Reuters

Mexican President Claudia Sheinbaum said on Thursday that she secured a pause on new tariffs coming into effect and a 90-day period to work on a trade deal in a call with U.S. President Donald Trump. – Reuters

The United States and Ecuador on Thursday signed a bilateral agreement aimed at strengthening their collaboration against transnational criminal networks. – Associated Press

Cybersecurity

As the United States and China vie for control over the future of artificial intelligence, Beijing has embarked on an all-out drive to transform the technology from a remote concept to a newfangled reality, with applications on factory floors and in hospitals and government offices. – Washington Post

China’s cyberspace regulator said Thursday it had summoned representatives of U.S. tech giant Nvidia to explain alleged security vulnerability risks involving its highly sought-after H20 artificial intelligence chips. – Washington Post

Italy’s main opposition Democratic Party (PD) has warned Giorgia Meloni’s ruling coalition against involving Elon Musk’s SpaceX in the update of a satellite programme, parliamentary documents show, saying the move would pose national security risks. – Reuters

Stealth submarines fitted with space-shooting lasers, supply-chain sabotage and custom-built attack satellites armed with ion thrusters. Those are just some of the strategies Chinese scientists have been developing to counter what Beijing sees as a potent threat: Elon Musk’ s armada of Starlink communications satellites. – Associated Press

China accused the US of exploiting a flaw in Microsoft Corp.’s email servers to steal military data and launch cyberattacks on its defense sector. – Bloomberg

SpaceX halted the launch of a crew to the International Space Station about a minute before liftoff on Thursday citing unfavorable weather conditions. – Bloomberg

A notorious Russian hacking group is impersonating a prominent cybersecurity firm and using the country’s internet providers to spy on foreign embassies, according to a report published Thursday by Microsoft Corp. – Bloomberg

Federal analysts are still sizing up what the Chinese hackers known as Volt Typhoon, who penetrated U.S. critical infrastructure to maintain access within those networks, might have intended by setting up shop there, a Cybersecurity and Infrastructure Security Agency official said Thursday. – CyberScoop

Foreign states stealing secret information from Australia are costing the country about $8 billion a year according to the head of the country’s domestic security service. – The Record

North Korean state-backed hackers have planted malicious code in open-source software repositories as part of an ongoing campaign that has already put tens of thousands of developers at risk of surveillance and data theft, according to new research. – The Record

Rebecca Zimmerman writes: People at these AI companies aren’t experts in instructing and learning. Teachers are. We can help children catch up from the pandemic doom and gloom. And we’re doing it—through student mental-health initiatives, through cellphone bans, and through science-based reading curriculums. The UFT’s partnership with AI companies will only derail the hard-earned political will needed to see these initiatives through. So New York City teachers, this fall, stay focused on our goals. We shouldn’t let AI distract us. – Wall Street Journal

Kenneth Rogoff writes: The regulation-lite approach of the new crypto legislation will certainly give rise to innovation. However, the legislation’s industry-friendly framework could boomerang by facilitating all manner of tax evasion and illegal activity such as drug smuggling and human trafficking. For the rest of the world, which will experience the costs with few of the benefits, the invasion of crypto products from the United States may make the tariff wars seem like a mere border skirmish. – Washington Post