Fdd's overnight brief

Israel

As Israel’s military closes in on Hamas in Gaza City, it confronts a challenge that will shape the coming battle: How to destroy the militant group’s forces without killing the hostages they hold. – Wall Street Journal

The European Commission on Wednesday proposed suspending a trade arrangement affecting about 5.8 billion euros ($6.87 billion) of Israeli exports due to the Gaza war, although the measure does not currently have enough support among EU nations to pass. – Reuters

A low-cost, high-power laser-based system aimed at destroying incoming missiles has successfully completed testing and will be ready for operational use by the military later this year, Israel’s Defence Ministry said on Wednesday. – Reuters

Fijian Prime Minister Sitiveni Rabuka inaugurated the country’s embassy in Jerusalem on Wednesday, the island nation’s first resident mission in Israel. – Agence France-Presse

Palestinian-American mediator Bishara Bahbah, who previously facilitated the direct channel between Hamas and the United States, said that it is still possible to bring both Israel and Hamas back to the negotiating table, despite the strike in Qatar. – Jerusalem Post 

Security sources claimed that Hamas has been deploying terror forces and resources to carry out attacks across the West Bank, Walla learned on Wednesday. According to estimates from the IDF’s Central Command, several incidents involving terror infrastructure, which Hamas has been trying to expand in recent months, are expected to be uncovered and announced soon. – Jerusalem Post

The conspiracy theories that Israel was involved in the murder of American conservative personality and Turning Point founder Charlie Kirk are “monstrous lies,” Prime Minister Benjamin Netanyahu said in a Thursday morning address published to X/Twitter. – Jerusalem Post

Hamas political bureau member Ghazi Hamad, who was targeted in Israel’s attack on Doha, Qatar, last Tuesday, appeared in an interview for the first time since the attack on Al Jazeera. – Jerusalem Post 

As the IDF intensifies its ground offensive in the Gaza Strip, armed clans across the territory have begun asserting local control and, in some cases, directly challenging Hamas rule, sources in the Southern Command said Wednesday. – Jerusalem Post 

Elliot Kaufman writes: That’s why even Turkey and Qatar, which host Hamas leaders, voted for the resolution. “Hamas is not a terrorist organization,” Turkish President Recep Tayyip Erdogan said on Oct. 25, 2023. “It is a liberation group—holy warriors.” On Oct. 7, Qatar issued this statement: “The Ministry of Foreign Affairs holds Israel solely responsible for the ongoing escalation.” The statement went on to echo Hamas’s justification for the day’s “al Aqsa Flood” massacre. One often hears it said that Israel “had the world on its side” after Oct. 7. The corollary is that Israel blew it by fighting back the way it has. The truth is much darker. – Wall Street Journal

Tira-El Cohen writes: In Misgav Am, dozens of homes were damaged, some directly from rockets, others due to blasts from shelling within the community. One structure belongs to the student village established at Kedma in 2018, the same year that a tunnel, dug into the heart of the kibbutz, was discovered. The destruction from the war against Hezbollah has left its mark along the border and illustrates the long road to rehabilitation. On this borderline, where routine is broken time and time again, what needs rebuilding is not only the houses, but hope itself. – Jerusalem Post

Russia and Ukraine

The Kremlin has long insisted that President Vladimir Putin’s main political opponent, Alexei Navalny, died of natural causes. Now, Navalny’s widow says she has fresh evidence he was killed. – Wall Street Journal

The U.S. government on Wednesday pledged $75 million to kick-start a landmark deal to invest in Ukraine’s vast mineral reserves, a commitment that will ease fears in Kyiv that the Trump administration is walking away from the war-torn country. – New York Times 

The Russian government is considering raising the rate of value-added tax to keep the budget deficit in check and maintain reserves, four sources told Reuters, despite public assurances from President Vladimir Putin that there will be no tax rises. – Reuters

Ukraine will receive missiles for Patriot air defence systems and HIMARS rocket launchers in the first batch of weapons being sent under a new funding programme agreed by the U.S. and Ukraine’s European allies, President Volodymyr Zelenskiy said on Wednesday. – Reuters

German Chancellor Friedrich Merz on Wednesday accused Russia’s Vladimir Putin of murder and trying to destabilise the West by testing its limits and sabotage, speaking at a parliamentary debate where he clashed with the far-right opposition. – Reuters

James Stavridis writes: Let’s face it: A no-fly zone is a very aggressive move, and it carries real risk of further escalation. But given Putin’s recklessness, ruthlessness and intransigence — most clearly demonstrated by his ignoring Trump’s personal efforts at diplomacy — we have arrived at the time to close the skies over Ukraine. In concert with other economic and diplomatic tools, it may be the only way to convince Moscow that its attempts to conquer all of Ukraine will prove futile. – Bloomberg

Middle East & North Africa

Saudi Arabia and nuclear-armed Pakistan signed a formal mutual defense pact on Wednesday, in a move that significantly strengthens a decades-long security partnership amid heightened regional tensions. – Reuters

Canadian mining company Ivanhoe Mines said on Wednesday it will raise $500 million from Qatar Investment Authority (QIA) in a private placement, giving the sovereign wealth fund a 4% stake. – Reuters

Lebanon’s defaulted government bonds have nearly quadrupled in price over the past year as investors bet on signs of economic recovery but a wild variance in estimates of their likely worth after a restructuring could restrain any further rally. – Reuters

China

Nvidia was dragged further into the U.S.-China trade war after Beijing’s top cybersecurity regulator urged big tech companies not to buy one of its newest chips. – Wall Street Journal

China’s vast, uncontrolled squid-fishing effort in the unregulated waters off South America is putting marine ecosystems at risk of depletion and leaving crew members vulnerable to physical abuse, overwork and even death, according to a new report by the Environmental Justice Foundation. – Washington Post

The fallout was over a wide-ranging partnership agreement the Cook Islands signed this year with China. The deal, viewed as the latest sign of China’s encroachment in the region, has alarmed New Zealand. – New York Times

China’s defence minister trumpeted Beijing’s efforts to reshape global governance, warning on Thursday against an increasingly divided world “defined by the rule of the jungle”, while saying his country’s strong military would be a force for peace. – Reuters

China on Wednesday called the framework deal reached in Madrid to switch short-video app TikTok to U.S.-controlled ownership a “win-win” and said it would review TikTok’s technology exports and intellectual property licensing, in a state media editorial. – Reuters

China’s declaration of a nature reserve in the South China Sea is the latest twist in its yearslong push to establish control over the strategically important waters and sea lane. – Associated Press

A Chinese company is preparing to sail a cargo ship along Russia’s northern coast to Europe— a test run made possible by melting ice and accelerating climate change, and one that has implications for both international trade and the environment. – Politico

Asia

Taiwan unveiled its first missile to be jointly manufactured with a U.S. company on Wednesday, marking a major step in the fast-growing defence cooperation between Taipei and Washington to counter China’s military threat. – Reuters

Thai police fired tear gas and rubber bullets at Cambodian civilians in a disputed border area on Wednesday, authorities in both countries said, the most significant escalation since they declared a ceasefire to end a deadly five-day conflict in July. – Reuters

A court in Kyrgyzstan sentenced two former video editors of the independent outlet Kloop, Zhoomart Duulatov and Alexander Alexandrov, to five years in prison on Wednesday on charges of spreading false information and undermining public order. – Reuters

The Philippines’ probe into the misuse of public funds for flood control projects could uncover trillions of pesos in losses, according to Public Works Secretary Vince Dizon, highlighting the extent of corruption that has fanned public outrage in the disaster-prone nation. – Bloomberg

Sanae Takaichi, a conservative hardliner known for supporting aggressive monetary easing and fiscal spending, declared her intention to run in the contest to become the next leader of Japan’s ruling Liberal Democratic Party. – Bloomberg

Japan would be a “capable participant” in the evolving US-UK-Australia defense partnership because of its investments in advanced defense systems, industrial-base improvements and cybersecurity protocols, according to an unreleased State Department assessment to Congress. – Bloomberg

Australia’s strategic outlook is darkening because of intensifying great-power rivalry between the US and China, according to a senior government official. – Bloomberg

Australian Prime Minister Anthony Albanese must use his upcoming meeting with President Donald Trump to make the case to revive the Quad security group, former US Deputy Secretary of State Kurt Campbell said. – Bloomberg

Africa

Guinea is set to vote on Sunday in a referendum on a new constitution that would permit junta leader Mamady Doumbouya to run for president, something he vowed not to do when he seized power four years ago. – Reuters

Nigerian President Bola Tinubu on Wednesday lifted a six-month emergency rule in Rivers State, reinstating Governor Siminalayi Fubara and other officials, after saying that a constitutional crisis that had paralysed governance had been resolved. – Reuters

Uganda plans to cut its overall spending in the 2026/27 (July-June) financial year by 4.1% and will reduce its domestic debt issuance to trim interest payments, a Ministry of Finance document published on Wednesday showed. – Reuters

At least 11 of the 14 immigrants deported by the U.S. to Ghana are still being held in the West African nation, the deportees and their lawyers told The Associated Press on Wednesday, contradicting claims from Ghanaian authorities that the deportees have been sent to their home countries. – Associated Press

US Trade Representative Jamieson Greer and South African Trade Minister Parks Tau are expected to meet on Thursday in a bid to resolve an impasse over tariffs, people with knowledge of the matter said. – Bloomberg

United States

After a deadly U.S. airstrike on a suspected drug boat, President Trump described the casualties as three “terrorists killed in action.” U.S. forces in the Caribbean are on the “front lines” and will take out enemies “at the times and places of our choosing,” his defense secretary has said. – Wall Street Journal

World leaders gather in New York next week for a U.N. General Assembly dominated by U.S. President Donald Trump’s return to the rostrum, war in Gaza and Ukraine, rising Western recognition of Palestinian statehood and nuclear tensions with Iran. – Reuters

A U.S. Treasury under secretary will visit Mexico City on Thursday to talk with officials and industry representatives about countering illicit financing, drug trafficking and cartel operations, the department said. – Reuters

The Republican-controlled U.S. House of Representatives on Wednesday cleared the way for a vote later this week on a stopgap funding measure to avert a partial federal government shutdown in two weeks. – Reuters

U.S. President Donald Trump on Wednesday signaled new action against left-wing groups following the assassination of right-wing political activist Charlie Kirk, targeting the anti-fascist antifa movement as a “terrorist organization.” – Reuters

Mahmoud Khalil, the former Columbia University graduate student detained for more than three months before being freed, has been ordered deported to Syria or Algeria by a US immigration judge, his lawyer said. – Bloomberg

Arturo McFields writes: Panama is also replacing Chinese telecommunication technology for high tech equipment made in America. China still has a malign influence in the region, moving fentanyl precursors, laundering money, and spying using technology. But the changes are starting to take place faster than expected. China is not losing just money. No. It is losing a foothold in the America’s backyard. – The Hill

Defense

The Pentagon official overseeing President Donald Trump’s Golden Dome missile defense effort, Steve Feinberg, was on Wednesday set to receive his first official briefing on the architecture of the complex, $175 billion plan. – Reuters

Japan is deploying eight aircraft, including four F-15 fighter jets, to bases in the United States, Canada and Europe in an unprecedented mission to support NATO. – Defense News

The Space Force’s acquisition arm recently stood up another unit under its novel “system delta” (SYD) structure, with the newest focused on development of the service’s complex test and training environment. – DefenseScoop

Members of the Virginia National Guard were mobilized this week to support the U.S. Immigration and Customs Enforcement, the Guard said. Guard troops are getting prepped and trained and are scheduled to report for duty at ICE field offices by the end of the week. – Military.com