West Asia News Live: Saudi diplomacy gains momentum amid rising instability in Syria, Gaza

The family of US citizen Khamis Ayyad is urging the Trump administration to launch an investigation into his death in the West Bank, Al Jazeera says in a report. Relatives of Ayyad allege that he was killed in an attack perpetrated by an Israeli settler and are formally calling on the US government to probe the incident.

The administration of US President Donald Trump is in talks for Azerbaijan to join the Abraham Accords, a development that would also see the pact’s expansion explored in Central Asia, Israel National News says in a report. This move would mark the first inclusion of a non-Arab, Turkic nation into the framework, building on Azerbaijan’s long-standing energy and security partnership with Israel. The inclusion of Azerbaijan, a significant oil supplier to Israel, could bolster regional energy security and create new trade and investment opportunities, particularly in the defence and technology sectors. The original Abraham Accords were signed in 2020, normalising relations between Israel and four Arab nations.

A court decision on whether a pro-Palestine march can legally proceed across the Sydney Harbour Bridge this weekend has been postponed until Saturday, The Guardian says in a report. Despite the delay and police warnings of a potential “crowd crush,” organizers have vowed to hold the protest regardless of the ruling, though they have indicated a willingness to postpone if police cooperate on a future date. The demonstration is partly in response to claims by Australian activists of psychological brutalisation following the detention of a Gaza aid boat by the Israeli military. A Christian-led group protesting antisemitism is also planning a rally for the same day.

The case of a 16-year-old dual US-Palestinian citizen, held in an Israeli prison for over five months, is creating diplomatic pressure on the US administration to intervene, The Guardian said in a report. Muhammad Zaher Ibrahim was arrested at age 15 in February from his home in the occupied West Bank village of Silwad and is accused of throwing rocks, a charge his family denies. His family reports his health has deteriorated during pre-trial detention, claiming he has lost significant weight and developed a severe skin infection.

Türkiye is set to begin providing Syria with natural gas on 2 August, an unnamed Turkish minister has announced, as per a report in Asharq Al-Awsat. The energy supply agreement between the two neighbouring countries is scheduled to commence at the beginning of the month.

Egypt has signed new offshore oil and gas exploration agreements with international energy firms Eni and BP, a strategic move to enhance its energy security amidst declining domestic production and rising demand, as per a report in Al-Monitor. The deals are of significant economic importance, expected to attract crucial foreign direct investment to an economy grappling with foreign currency shortages and high debt, thereby supporting its IMF-backed reform programme. From a market perspective, these agreements are designed to reduce Egypt’s reliance on costly energy imports and reinforce its position as a key energy hub in the Eastern Mediterranean, particularly within the framework of the East Mediterranean Gas Forum (EMGF). For Eni and BP, the agreements secure access to new reserves in a strategic region, though the move has drawn scrutiny from environmental analysts who note it deepens the country’s reliance on fossil fuels, potentially conflicting with global climate transition goals.

Residents of the ancient Syrian city of Palmyra are starting to return home after more than a decade of displacement caused by the country’s civil war and subsequent occupations by ISIS, Foreign Policy said in a report. This development signals a move towards stabilisation in the area, which has been under the control of the Syrian government since it recaptured the city from ISIS in 2017. The return of the local population is a critical step, but occurs amidst significant challenges, including destroyed infrastructure and economic hardship, raising questions for the international community regarding humanitarian aid and the complex politics of reconstruction in Syria.

Several Western nations, including the United States, United Kingdom, France, and Germany, have formally condemned Iran for alleged covert intelligence threats, Asharq Al-Awsat says in a report. The alleged operations, reportedly conducted by Iran’s Ministry of Intelligence and Security (MOIS) and the Islamic Revolutionary Guard Corps Intelligence Organization (IRGC-IO), are said to target Iranian dissidents and other perceived enemies of the state living abroad. This condemnation comes amid a period of heightened geopolitical friction, marked by a continued stalemate in negotiations over the Iranian nuclear program and several recent arrests in Europe linked to alleged Iranian espionage activities.

At least 11 progressive House Democrats, led by Representative Ro Khanna, have signed a letter urging the US to formally recognise a Palestinian state, The Hill reports. The call for recognition follows similar moves by several European nations and is timed ahead of the UN General Assembly meeting in September. This initiative challenges the long-standing US policy of linking Palestinian statehood to a negotiated settlement with Israel.

Senator Elissa Slotkin (D-Mich.) stated on Thursday that she would have voted against arms sales to Israel, citing concerns over widespread hunger and the lack of medicine entering Gaza, The Hill says in a report. The senator’s statement came after she missed a series of related Senate votes the previous night to appear on a television programme. Slotkin’s position reflects an ongoing and significant debate within the Democratic Party regarding US policy and military support for Israel amid the severe humanitarian situation in Gaza.

A Swedish jihadist has been handed a life sentence for his involvement in the 2015 murder of Jordanian pilot Lt Moaz al-Kasasbeh in Syria, an event that highlights the persistent legal pursuit of accountability for terrorism and its implications for geopolitical risk in West Asia, according to a report in BBC. The killing was carried out by the Islamic State (IS) group and publicised in a video at the time. For Jordan, the verdict reinforces its commitment to national security and regional stability, a key consideration for the investment climate. The successful prosecution demonstrates the effectiveness of sustained international counter-terrorism efforts, which contribute to mitigating long-term security threats that can impact economic confidence in the region.

Saudi Arabia’s Border Guard has rescued three swimmers in distress off the coast of Haql, a city in the Tabuk province on the Gulf of Aqaba, as per a report in Asharq Al-Awsat. The operation was a public safety and search and rescue mission. The city of Haql is located within the region of Saudi Arabia’s Red Sea development initiatives, which include the NEOM project under the kingdom’s Vision 2030 plan.

Saudi Arabia and Canada have signed a Memorandum of Understanding (MoU) to establish a framework for political consultations, marking a significant step in normalising diplomatic ties, Asharq Al-Awsat says in a report. This agreement represents a substantial thaw in relations, which have been strained since 2018 when Saudi Arabia expelled Canada’s ambassador and froze new trade and investment in response to Ottawa’s criticism of its human rights record. The non-binding MoU is seen as a crucial step toward restoring full economic engagement, potentially creating new opportunities for Canadian businesses in sectors such as energy and infrastructure. For investors, the move signals increased political stability and predictability, potentially unlocking capital flows between the two G20 economies and aligning with Saudi Arabia’s broader strategy of diplomatic re-engagement to support its economic diversification goals.

Lebanese authorities have reported that four people were killed in recent Israeli strikes, according to a report in Asharq Al-Awsat. The report from Lebanon attributes the casualties to military actions conducted by Israel as part of recent cross-border hostilities.

Israel’s military has stated it struck a Hezbollah missile production facility inside Lebanon, a significant escalation that raises investor concerns over a wider regional conflict, as per a report in Asharq Al-Awsat. The strike, which Israel describes as part of its ongoing campaign to prevent Hezbollah from acquiring precision-guided missiles, directly impacts regional stability, which is already fragile due to the ongoing war in Gaza. From a market perspective, such an event increases the risk premium for assets in the region, with potential upward pressure on oil prices due to fears of a broader conflict that could disrupt supply chains. The action also further destabilises Lebanon’s collapsing economy and undermines its sovereignty, creating a more unpredictable environment for any international investment or aid.

The United States and Qatar are on the verge of finalising an agreement for Qatar to provide a Boeing 747-8 aircraft to the U.S. military as an unconditional “donation”, The Washington Post reports. This development has direct financial implications, potentially offering substantial cost savings for the U.S. Department of Defense’s new Air Force One (VC-25B) programme, which has been beset by cost overruns and delays. For Boeing, the deal would resolve the status of an unsold ‘white tail’ aircraft. The gesture builds on the strategic relationship between the two countries, which has deepened following Qatar’s pivotal role in the 2021 Afghanistan evacuation and its subsequent designation as a major non-NATO ally.

Israel Defense Forces (IDF) Chief of Staff Herzi Halevi stated that combat operations in Gaza will be escalated if a new agreement for the release of hostages is not finalized, Israel National News reports. During a tour of Gaza with senior commanders on Friday, Halevi indicated that while a deal could be near, the alternative is an intensification of the fighting. The statement serves as a direct message amid ongoing military campaigns and diplomatic negotiations aimed at securing the return of hostages held by Hamas.

Hamas has released a new video showing Israeli hostage Evyatar David, who was captured and taken to Gaza, Haaretz says in a report. This development is seen as a deliberate tactic to exert psychological pressure and influence ongoing, yet stalled, negotiations for a ceasefire and hostage exchange. From a financial perspective, the act injects fresh volatility into the region, potentially impacting investor sentiment and energy markets. The video intensifies immense domestic pressure on Israel’s government to secure the release of captives, forcing a difficult balance between military objectives and negotiation demands. The continued uncertainty prolongs the economic strain on Israel and underscores the persistent geopolitical risks for businesses and investment in West Asia.

A significant energy agreement for Qatar to supply Germany with two million tonnes of liquefied natural gas (LNG) annually from 2026 is now under threat, as per a report in Deutsche Welle. The deal’s viability is being challenged by an upcoming European Union directive, the Corporate Sustainability Due Diligence Directive (CSDDD), which aims to enforce human rights and environmental standards in corporate supply chains. Critics of the directive argue that its requirements are excessively costly and bureaucratic, potentially jeopardising the crucial energy supply deal which Germany pursued to diversify its energy sources and reduce reliance on Russian gas.

On the 20th anniversary of Israel’s unilateral disengagement from Gaza, President Isaac Herzog urged the nation to demonstrate responsibility and unity, stating that “our enemies thrive on seeing our downfall,” according to a report in Israel National News. Herzog emphasized the critical need to learn from past mistakes that left many citizens feeling unheard and called for efforts to “rebuild our bridges.” The remarks are set against a backdrop of recent internal political divisions and ongoing external security threats in the region.

Food prices in Gaza have surged to extraordinary heights, rendering essential goods unaffordable for much of the population and pushing the local economy towards total collapse. This hyperinflation in the food market is a direct economic consequence of the ongoing conflict and the tightened blockade, which has crippled supply chains and humanitarian aid delivery. The crisis exacerbates an already debilitated economic environment, which suffered from a long-standing blockade prior to the recent escalation. The inability to secure basic provisions has severe implications for regional stability, placing economic and diplomatic pressure on neighbouring countries like Egypt and straining the resources of international organisations attempting to operate in the territory.

Humanitarian airdrops into Gaza represent a costly and inefficient ‘last resort’ for aid delivery, signalling significant diplomatic and logistical failures that carry economic consequences for donor nations and the region, as per a report in The New York Times. Experts note that this method is not only financially burdensome compared to ground convoys but also dangerous, referencing at least five deaths from airdrop accidents in the previous year. The necessity of airdrops, undertaken by nations including the US and Jordan, stems from severe restrictions and blockades on land routes, which prevent the sufficient flow of aid to address a severe humanitarian crisis. This situation creates risks of regional economic instability, implies massive future reconstruction costs, and puts Israel under intense international pressure that could have economic repercussions.

The United Arab Emirates is set to host a Twenty20 cricket tri-series featuring its own national team alongside Pakistan and Afghanistan, with the tournament serving as preparation for next year’s T20 World Cup, as per a report in AP. All seven games of the tournament will be held in Sharjah, commencing on August 29. The series format will see the three teams play each other twice, after which the top two will compete in the final.

UK Prime Minister Keir Starmer has stated he is listening to hostages taken by Hamas but still plans to recognise a Palestinian state if Israel does not commit to a ceasefire and a two-state solution, The Guardian says in a report. The statement came after Emily Damari, a freed British-Israeli hostage held for 471 days, accused the prime minister of ‘moral failure’ over the UK’s plan to potentially recognise Palestine at the UN in September. Starmer confirmed he had spoken with Damari but indicated his government’s policy direction remains unchanged, linking the recognition to Israel’s future actions regarding a two-state solution.

An Israeli minister has suggested the potential annexation of parts of the Gaza Strip, elevating geopolitical tensions in West Asia amid the ongoing conflict, Asharq Al-Awsat said in a report. The statement, while not official government policy, introduces significant uncertainty into post-war planning for the territory. Such a move would run contrary to international law and the stated position of key allies, including the United States under President Donald Trump, and could jeopardise economic normalisation efforts with Arab nations by creating significant regional instability.

The pro-Palestinian activist group Palestine Action has won a procedural victory in its bid to challenge a UK government ban under anti-terrorism laws, according to a report in Asharq Al-Awsat. A court has granted the group permission to proceed with a full judicial review of the Home Secretary’s decision, which was based on the group’s direct-action tactics, including property damage against companies it accuses of being involved in the Israeli-Palestinian conflict. While the decision does not overturn the ban itself, it allows the legal challenge to move forward, creating continued uncertainty and the likelihood of persistent disruptive protests for the arms manufacturers and associated firms that are the focus of the group’s campaigns.

Israel’s far-right Finance Minister, Bezalel Smotrich, has publicly advocated for the Jewish resettlement of Gaza, a move that significantly escalates geopolitical risk in West Asia and threatens to destabilise relations with key international partners, The New York Times said in a report. The proposal, which would reverse the 2005 disengagement, has already triggered a tangible diplomatic consequence, with the Netherlands imposing a ban on Smotrich. From a market perspective, such statements from a senior cabinet minister introduce considerable uncertainty, potentially impacting investor confidence, currency stability, and the country’s risk premium. The direct contradiction with the post-conflict plans of the US and EU could also jeopardise future economic aid and trade relations, creating long-term economic headwinds for Israel.

The Israeli Defence Forces (IDF) intercepted an aid vessel named the Handala on Saturday night as it attempted to breach the naval blockade of Gaza, The Guardian says in a report. The ship, operated by the Freedom Flotilla Coalition, was carrying humanitarian supplies including food and medicine for a region where UN-backed experts have warned of a severe famine risk. The coalition alleges that US labour activist Chris Smalls, co-founder of the Amazon Labor Union, was beaten and choked by IDF soldiers during the boarding. The incident presents a significant diplomatic challenge for the Trump administration, increasing scrutiny on US-Israel relations and Israel’s conduct in enforcing the blockade.

Senior lawyers have formally challenged UK Labour leader Keir Starmer’s pledge to recognise a Palestinian state, arguing it may contravene international law as per the Montevideo convention, The Guardian says in a report. This legal scrutiny introduces a new layer of uncertainty for businesses and investors assessing the UK’s future foreign policy in West Asia. A potential shift towards recognition could significantly alter diplomatic ties, potentially impacting trade agreements, defence-sector cooperation, and the UK’s role as a political mediator in the region, with significant implications for its relationship with Israel.

President Donald Trump’s evolving rhetoric on the Israel-Gaza conflict marks a notable shift from the consistent pro-Israel stance of his previous term, introducing significant unpredictability into West Asian geopolitics and financial markets, Foreign Policy says in a report. This ambiguity raises questions for the defence sector and investors, particularly regarding the future of the approximately $3.8 billion in annual U.S. military aid to Israel. Analysts are reportedly debating whether the change in tone is a strategic pivot or an electoral tactic. This lack of a clear policy direction from the current administration contrasts with the policies of the former Biden administration and could heighten geopolitical risk, potentially affecting energy prices and investment flows in the region.

An Israeli air defence interceptor was launched near the Gaza Strip due to a false alarm, Asharq Al-Awsat said in a report. The launch was triggered by a perceived threat that was later determined by military officials to be non-existent.

In response to recent diplomatic moves by several nations to recognize Palestinian statehood, Dalia Cusnir, the relative of a hostage held in Gaza, stated that regional security depends on two conditions, according to a report in BBC. Cusnir asserted that the ‘only way of securing the future of the region’ is to first secure the return of all hostages. She added that Hamas must also be forced to lay down its weapons as a prerequisite for any lasting stability.

The Israel Defense Forces (IDF) has sent 54,000 draft notices to ultra-Orthodox (Haredi) men eligible for military service, a development that significantly escalates a long-standing social and political conflict, Haaretz says in a report. The action follows Israeli Supreme Court rulings that declared the widespread exemptions for Haredi religious students to be discriminatory and unconstitutional. This move places immense pressure on Prime Minister Benjamin Netanyahu’s government, as its stability relies on coalition partners from Haredi political parties who staunchly oppose the conscription of their constituents. The resulting political instability poses a considerable risk to Israel’s financial markets, with potential negative impacts on the Tel Aviv Stock Exchange and the shekel. While creating immediate political and social turmoil, the enforcement of the draft could have long-term economic implications by potentially integrating a larger portion of the Haredi population into the military and, subsequently, the mainstream workforce, addressing a structural issue of low labour participation within the community.

The United States has sanctioned an Iranian oil smuggling operation that allegedly utilises a ‘shadow fleet’ of vessels to circumvent existing economic restrictions, Asharq Al-Awsat says in a report. The network is reportedly linked to the son of Ali Shamkhani, who formerly served as the Secretary of Iran’s Supreme National Security Council. These sanctions represent a continued US effort to disrupt Tehran’s primary revenue streams from oil exports, which have persisted despite previous measures through deceptive maritime practices such as disabling tracking systems and conducting ship-to-ship transfers. Iran has officially condemned the new sanctions. The action is intended to increase financial pressure on the Iranian government and highlights the operational risks within global shipping and oil markets for entities involved in sanctions evasion.

Palestinian President Mahmoud Abbas has officially welcomed the results of a recent international conference focused on reviving the two-state solution, a diplomatic gesture that carries minimal immediate impact for financial markets or regional economic stability, as per a report in Asharq Al-Awsat. While such diplomatic overtures aim to keep a long-term political framework alive, investors are likely to weigh the move against more significant material factors. These include the Israeli government’s explicit rejection of Palestinian statehood, which removes any near-term possibility of a resolution that could de-risk the region, and the deep-seated legitimacy crisis facing the Palestinian Authority itself. The ongoing war in Gaza continues to be the primary driver of geopolitical risk, and until there is a tangible shift in the positions of the primary belligerents, diplomatic conferences are viewed by markets as largely symbolic, with no bearing on investment decisions or economic forecasts for Israel or the Palestinian territories.

The Palestinian Authority has formally condemned an Israeli construction plan in the ‘E1’ area, which would create a direct link between the Ma’ale Adumim settlement and Jerusalem, as per a report in Israel National News. The PA has asserted that this development represents a severe threat to the viability of a two-state solution and has called for international pressure to be exerted on Israel to halt the project. The E1 plan is considered highly contentious because its implementation would effectively sever the territorial contiguity between the northern and southern parts of the West Bank, isolating East Jerusalem and significantly undermining the foundation for a future, viable Palestinian state. This move by the Israeli government escalates geopolitical risk in the region and risks creating diplomatic friction with international partners, including the United States and the European Union, who have consistently opposed such settlement expansions.

During a diplomatic visit to Israel, US Special Envoy to the Middle East Steve Witkoff visited Jerusalem’s Western Wall ahead of the Jewish observance of Tisha B’Av, according to a report in Israel National News. At the holy site, Witkoff offered a personal prayer, placed a note in the Wall, and stated that he prayed for the return of the hostages held in Gaza and for an end to the war. The visit occurs amid the ongoing Israel-Hamas conflict and the related hostage negotiations, which are a focus of US diplomatic efforts in the region.

Wrth and the King Abdulaziz Library co-hosted a symposium in Saudi Arabia dedicated to the nation’s handicrafts, according to a report in Asharq Al-Awsat. The event focused on methods for preserving traditional skills and promoting the cultural and economic value of these crafts. This initiative is part of a wider national effort to highlight Saudi Arabia’s cultural heritage and support local artisans, aligning with the country’s strategic goals for cultural development.

France is demanding an explanation from Spain following an incident where a group of French Jewish teenagers was forcibly removed from a Vueling flight in Valencia, Israel National News says in a report. The situation has caused diplomatic outrage, particularly after Spain’s transport minister allegedly referred to the teens as ‘Israeli brats’. During the removal, the group’s counsellor was reportedly handcuffed by police, prompting the French government to seek immediate clarification from Spanish authorities.