Fdd's overnight brief

Israel

U.S. Middle East peace envoy Steve Witkoff said he is recalling the U.S. negotiating team from Doha, Qatar, for consultations, saying Hamas showed a “lack of desire to reach a ceasefire in Gaza,” in the latest roadblock to the Trump administration’s drive to end the war between Israel and Hamas. – Wall Street Journal

The U.S. has seven high-end Thaad missile-defense systems. During the 12-day war with Iran in June, two were deployed to Israel—and it wasn’t enough. – Wall Street Journal

France will recognize an independent state of Palestine in September at the U.N. General Assembly, President Emmanuel Macron said Thursday. – Washington Post

The United States will not attend an upcoming conference on an Israel two-state solution, State Department deputy spokesperson Tommy Pigott told reporters during a press briefing on Thursday. – Reuters

A senior Hamas source told Reuters on Thursday that there was still a chance of reaching a Gaza ceasefire agreement but it would take a few days because of what he called Israeli stalling. – Reuters

An investigation commissioned by Boston Consulting Group has found that some of its U.S.-based staff sidestepped its risk controls to do work related to the Gaza Humanitarian Foundation and to “post-war reconstruction” for the Palestinian enclave, the consulting firm said. – Reuters

Israeli ministers railed against French President Emmanuel Macron after he announced Thursday that Paris would recognize a Palestinian state at the UN General Assembly in September, with several senior members of Prime Minister Benjamin Netanyahu’s coalition calling for Jerusalem to annex the West Bank in retaliation. – Agence France Presse

Israel has filed a request to permanently confiscate the Gaza-bound ship Madleen from the “Freedom Flotilla,” after it attempted to break the naval blockade on the Gaza Strip. – Ynet

Some 800 trucks carrying food and essential supplies are waiting inside Gaza, the IDF said, while the UN and aid agencies fail to collect them because of disputes with Israel. – Ynet

Yasser Abu Shabab writes: What comes next for Gaza must be determined by the people themselves, a choice we have been denied for nearly two decades. For now, our focus remains on saving as many lives as possible and laying the foundations for a better future. On behalf of the overwhelming majority of Palestinians in Gaza, the Popular Forces call on the U.S. and Arab countries formally to recognize and support an independent Palestinian administration under our leadership. From eastern Rafah—where families now sleep safely under civil protection—I can see Gaza’s future. The question is: Will the world help build it with us, free from the ideologies of violence and terror? – Wall Street Journal

Russia and Ukraine

Two people were killed in a Russian strike on eastern Ukraine on Thursday and at least 33 were wounded when Russian glide bombs struck a residential neighbourhood in the northeastern city of Kharkiv, regional officials said. – Reuters

President Volodymyr Zelenskiy on Thursday submitted draft legislation to restore the independence of Ukraine’s anti-corruption agencies, reversing course after an outburst of public criticism. – Reuters

Russia accused German Chancellor Friedrich Merz on Thursday of pursuing a path of “militarisation” and said this was a cause for concern. – Reuters

The International Monetary Fund blasted Ukraine’s recent move to strip the nation’s anti-corruption agencies of their independence, calling for a reversal of the decision and warning about damage to the economy. – Bloomberg

Jillian Kay Melchior writes: Mr. Zelensky is now backtracking, but his decision to sign the new law was an unforced error that undermined Ukraine’s hard-won progress on corruption at a key moment of the war with Russia. European leaders have been reluctant to criticize Mr. Zelensky, but they do him and his countrymen no favors by withholding their rebuke now. Mr. Putin is the sole beneficiary here. He could only be smiling. – Wall Street Journal

Maksym Skrypchenko writes: There is now a crucial political opening for continued support to Ukraine, even if the funding mechanism changes. The narrative that Trump desires Ukraine’s fall has been refuted. Instead, Trump is committed to ending the war on terms that align with his administration’s interests. This represents a significant psychological advantage for Ukraine, as it lessens the fear of a complete U.S. abandonment. – The Hill

Jeffrey Mankoff writes: Above all, the United States must recognize that it shares a key objective with countries in the Eurasian interior. Their domestic political systems may not all be to Washington’s liking, and many of them will want productive relations with Moscow, Beijing, or Tehran. Given their geography, they have little choice. But these countries and their populations will also resist the Kremlin’s attempts to incorporate them into a reconstituted Russian sphere of influence. For the United States, preventing the region’s domination by Russia or other revisionist powers means supporting post-Soviet Eurasian countries’ pursuit of diversified economic and political ties. Even though those efforts do not always happen on Washington’s terms, their contributions to a freer, more open region align with Washington’s strategic interest. – Foreign Affairs

Charles Sullivan writes: Similar to Putin, Hibatullah Akhundzada, the group’s Supreme Leader, faces an ICC arrest warrant. Officially recognizing the Taliban in its current form thus embodies a rejection of Western values, and it appears only Russia is willing, at least for now, to take such a provocative step. Moscow’s legitimation of the Taliban amounts to a symbolic act by a diminishing Great Power, equivalent to one sanctioned pariah acknowledging another outcast regime, largely to spite the West. – Center for European Policy Analysis

Andreas Umland writes: Should Trump’s plan work, a loss of non-Western trading partners could harm Putin’s war machine. If China, India, and other countries, under the threat of American sanctions, turn away from Russia and follow the US’s lead, that will be a problem for the Kremlin. To date, the greatest weakness of the numerous direct international sanctions on Russia has been that Moscow has been and remains able to turn to alternative markets and foreign buyers, thereby compensating for the impact of the West’s punitive measures. Should Trump’s tariffs take effect, these detours may become more complicated for Moscow. – National Interest

Christian Caryl writes: Ponomarenko is right. It is this same grassroots energy that propelled ordinary civilians to battle the invaders in 2022, marshalled the efforts of millions of volunteers in support of the armed forces, and unleashed the ingenuity of countless inventors and designers. Kyiv’s forces have invented many impressive weapons during the conflict with Moscow. But it is the stubborn desire of millions of ordinary citizens to vote, protest, speak their minds, and determine their own fates that represents the most powerful resource in the Ukrainian arsenal. – Foreign Policy

Yemen

People in a wooden boat opened fire on a Comoros-flagged livestock carrier in the Red Sea near Yemen on Thursday, and the vessel was detained by the Yemeni Coast Guard, according to the United Kingdom Maritime Trade Operations (UKMTO). – Reuters

Greece will deploy a salvage vessel in the Red Sea to assist in maritime accidents and protect seafarers and global shipping, the shipping minister said on Thursday, following attacks on two Greek vessels by Yemen’s Houthi militants this month. – Reuters

An explosion heard at al-Anad military base in southwest Yemen was due to the detonation of munitions at a weapons depot, the Yemeni southern forces spokesperson said on Thursday. – Reuters

Korean Peninsula

Four years ago, gig work for North Korean agents turned Christina Chapman’s life around. On Thursday, it led to a prison sentence of 102 months, or 8½ years, for the Arizona woman. – Wall Street Journal

President Trump’s trade agreement with Japan, announced this week, has intensified pressure on South Korea to cut a deal that doesn’t leave it at a disadvantage relative to its biggest rival in East Asia. – New York Times

South Korea’s Industry Minister Kim Jung-kwan met U.S. Commerce Secretary Howard Lutnick on Thursday and reaffirmed a commitment to reach a deal on tariffs by the August 1 deadline, South Korea’s industry ministry said on Friday. – Reuters

The United States Department of the Treasury on Thursday issued sanctions against three individuals and a company based in North Korea and China, the department said on its website. – Reuters

South Korea and the United States have been discussing a shipbuilding tie-up that could include investments to modernise U.S. shipyards and more help to repair the U.S. naval fleet as Seoul seeks better tariff terms, government and industry sources said. – Reuters

South Asia

Sustaining Sri Lanka’s reform momentum is critical to safeguarding the country’s macroeconomic stability, the International Monetary Fund said on Friday after its staff concluded a visit to the island nation. – Reuters

A deputy chief at Pakistan’s spy agency met with currency exchange firms this week amid a sharp slide in the rupee, leading to a crackdown on black market dollar trade, the head of the country’s forex association told Reuters on Thursday. – Reuters

Britain and India signed a free trade agreement on Thursday during a visit by Indian Prime Minister Narendra Modi, sealing a deal to cut tariffs on goods from textiles to whisky and cars and allow more market access for businesses. – Reuters

The head of the Federal Aviation Administration said on Thursday the fatal crash last month of an Air India Boeing , 787 jet does not appear to have been caused by a mechanical issue or inadvertent movement of the fuel control unit or switches. – Reuters

Europe

European Union officials are voicing optimism about a possible trade deal with the United States, aiming for 15 percent across-the-board tariffs, including on cars and car parts, but they have also made clear that they are prepared to strike back should an agreement fall through. – New York Times

María del Carmen Abascal was already frustrated over the lack of affordable housing in Spain, where rising rent could force her out of the apartment in Madrid she has lived in for 69 years. – New York Times

Britain’s foreign ministry on Thursday has advised against all but essential travel to parts of Cambodia and Thailand following the worst fighting between the countries in 13 years. – Reuters

U.S. President Donald Trump, dogged by questions about his ties to disgraced financier and sex offender Jeffrey Epstein, heads to Scotland on Friday for a trip that will mix golf with politics mostly out of the public view. – Reuters

British Prime Minister Keir Starmer said he would hold an emergency call with France and Germany over the situation in Gaza, which he described as an “unspeakable and indefensible” humanitarian catastrophe. – Reuters

The Netherlands and 40 other OSCE member states have formally called for an independent investigation into the alledged torture and mistreatment of Ukrainian prisoners of war by Russian forces, Dutch Foreign Minister Caspar Veldkamp said on social media platform X on Thursday. – Reuters

The Americas

Chevron is regaining the ability to pump oil in Venezuela from the Trump administration, people familiar with the move said, in an abrupt reversal in the White House’s policy toward the socialist dictatorship. – Wall Street Journal

Brazil’s Supreme Court decided on Thursday not to order the arrest of former President Jair Bolsonaro for an “isolated” breach of court-imposed restrictions, but warned he could be imprisoned for future violations. – Reuters

The International Monetary Fund said on Thursday it has reached a staff-level agreement on the first review of its extended fund facility with Argentina, potentially unlocking about $2 billion for the economically embattled Latin American nation. – Reuters

Brazilian Vice President Geraldo Alckmin said on Thursday that he had reiterated his country’s willingness to negotiate proposed U.S. tariffs on imports from Latin America’s No. 1 economy during a conversation on Saturday with U.S. Commerce Secretary Howard Lutnick. – Reuters

Brazilian Finance Minister Fernando Haddad said on Thursday a contingency plan in response to higher U.S. tariffs will be presented to President Luiz Inacio Lula da Silva from Monday and will include a menu of measures, including credit lines. – Reuters

The United States and Mexico on Thursday reached an agreement aimed at finding a permanent solution to a decades-long sewage crisis, in which Mexican sewage has flowed into the Tijuana River and across the U.S. border, emptying into the Pacific Ocean near San Diego. – Reuters

Ecuador’s government is firing 5,000 civil servants and cutting down the number of ministries and related public offices by about 40% as President Daniel Noboa struggles to balance the nation’s budget. – Bloomberg

Cybersecurity

Tech firms huge and small will converge in Shanghai this weekend to showcase their artificial intelligence innovations and support China’s booming AI sector as it faces U.S. sanctions. – Reuters

Demand in China has begun surging for a business that, in theory, shouldn’t exist: the repair of advanced Nvidia artificial intelligence chipsets that the U.S. has banned the export of to its trade and tech rival. – Reuters

U.S. Commerce Secretary Howard Lutnick said on Thursday that TikTok will have to stop operating in the United States if China does not approve a deal for the sale of the Chinese-owned short video app that is used by some 170 million Americans. – Reuters

Nvidia’s advanced artificial intelligence chips worth at least $1 billion were smuggled to China in the three months after Washington tightened chip export controls, the Financial Times reported on Thursday. – Reuters

A cyber-espionage campaign linked to a sophisticated hacking group believed to be based in China is continuing to compromise virtualization and networking infrastructure used by enterprises globally, according to a new deep-dive report by cybersecurity company Sygnia. – The Record

Owen J. Daniels and Hanna Dohmen write: By promoting open-model development and more carefully tailored export restrictions, Washington can also advance American soft power. A stronger open model ecosystem in the United States, for example, could provide U.S. allies and partners with attractive and affordable alternatives to Chinese models, fostering innovation abroad and reinforcing U.S. global influence. By taking steps to share AI’s benefits, the United States can enhance its global image, even if this must be carefully balanced with security concerns. If it fails to address China’s growing soft-power lead quickly, however, the cost may be high: Chinese diffusion of cheap, powerful AI capabilities—and the global clout that will accompany it—could ultimately prove too hard to displace. – Foreign Affairs

Zachary Arnold and Adrian Thinnyun write: While there will always be risks associated with deploying new technology, nuclear power has shown that a process of iterative, learning-focused regulation can help prevent accidents from derailing promising technologies and propel future innovation. By removing barriers to effective self-regulation, the government can prevent an AI Three Mile Island before it happens and position the United States as a leader in both AI safety and opportunity. – National Interest