Saudi Arabia’s finance minister warned that geopolitics may be the biggest concern for the world economy, which is already facing slower growth and elevated interest rates.

Hamas released a video on Saturday showing two hostages alive as it studied Israel’s latest proposal for a ceasefire, in an apparent bid to increase pressure on Prime Minister Benjamin Netanyahu to call off a major offensive that would deepen the war in Gaza.  

US pushes for ‘last chance’ of Gaza truce as Blinken visits

US Secretary of State Antony Blinken will step up efforts to secure a truce in Gaza when he arrives in the Middle East on Monday, in what could be a final chance to persuade Israel to call off an attack on the southern city of Rafah.

“If there’s a deal, we will suspend the operation” in Rafah, Israel’s Foreign Minister Israel Katz told Channel 12 on Saturday as the Israeli military continued to make preparations for an offensive.

Egypt is stepping up efforts at mediation to secure an agreement between Israel and Hamas leading to a ceasefire in exchange for the release of hostages, but the two sides remain far apart. A Hamas official has said its delegation plans to respond to the latest truce plan on Monday, Agence France Presse reported. 

Blinken is travelling to Saudi Arabia for two days to meet regional counterparts and then on to Israel, according to US and Israeli media. It’s the top US diplomat’s seventh Middle East trip since Hamas attacked Israel on 7 October.  

An Israeli assault on Rafah, a safe haven for roughly half the Gaza Strip’s population who’ve fled almost seven months of fighting, would prolong the conflict and threaten US President Joe Biden’s hopes of getting Arab states to help with post-war rebuilding. It would also stymie a US push to secure a historic accord to establish relations between Israel and Saudi Arabia.

The US has urged Israel against a large-scale offensive in Rafah, which Israeli officials say is needed to crush the final stronghold of 5,000 to 8,000 fighters and key leaders from the Palestinian militant group. The small city on the coastal strip’s border with Egypt had a pre-war population of about 280,000 and is now crammed with more than a million refugees. There are fears of major civilian casualties if Israeli troops storm it. Israel has promised to move the civilians out, an uncertain process that could take weeks.

Israel has been waging a military campaign in Gaza to wipe out Hamas, which is designated as a terrorist organisation by the US, EU and others, since it swept across the border and attacked Israeli communities and military bases on 7 October.  

Hamas fighters killed 1,200 people and abducted 250 others in that assault, of whom more than 130 remain in Gaza, some dead. The Israeli bombardment and ground offensive has destroyed much of Gaza, killing more than 34,000 Palestinians, according to health officials in the Hamas-run territory, who don’t distinguish between civilian and military casualties. 

Pressure is mounting on Netanyahu to make more effort to reach a truce with Hamas. Thousands of people took to the streets of Tel Aviv and other cities on Saturday, some demanding the government step down to make way for early elections, after the group released videos of several hostages alive. 

Negotiations with Hamas remain deadlocked on the group’s insistence of an Israeli commitment to eventually pull out all its troops and end the war. Israel has also refused demands to allow displaced Gazans to return to their homes in the north without any restrictions.

In a sign of progress, Israel may be willing to compromise on the number of hostages freed in return for allowing Palestinian prisoners out of jail in an initial phase of any deal, Israeli media reported. Hamas had said it can’t free 40 women, elderly or sick captives as demanded in return for a six-week ceasefire, because it doesn’t have enough hostages in that category. Egypt has suggested a three-week truce in exchange for freeing 20 hostages, The Wall Street Journal reported on Sunday, citing Egyptian officials.

Read more: New Gaza hostage video increases heat on Netanyahu over Rafah

Under a previous proposal, a second phase would free men and soldiers under 50, followed by a third phase for the release of the bodies of hostages that should lead to a permanent end to the war, according to US officials.

Axios cited two senior Israeli officials who weren’t identified as saying that Israel was ready to give “one last chance” for the negotiations before moving forward with a ground invasion of Rafah. 

Netanyahu’s room for manoeuvre is limited because he heads the most right-wing government in Israel’s history. His firebrand coalition allies, including Finance Minister Bezalel Smotrich and National Security Minister Itamar Ben-Gvir, oppose a hostage deal right now, which could bring his administration down. They both warned in posts on X on Sunday not to risk his government’s existence.  

Qatar, which has also been mediating, warned that neither side was showing sufficient flexibility. “We have expressed frustration regarding the level of commitment of both parties,” Qatari Foreign Ministry spokesperson Majed Al Ansari told Israel’s Kan state channel in an interview aired on Saturday.  

Saudi finance minister warns geopolitics is top economy risk

Saudi Arabia’s finance minister warned geopolitics may be the biggest concern for the world economy, which is already facing slower growth and elevated interest rates.

“Today, to me, geopolitical risks are possibly the No 1 risk as you look at the global economy,” Mohammed Al-Jadaan said at a special edition of the World Economic Forum in Riyadh on Sunday. “Policymakers will need to be very agile in dealing with this,” he said, citing risks of protectionism in some parts of the world.

Jadaan also called on leaders to “do everything we can” to de-escalate, echoing comments more broadly made by Saudi government officials around Israel’s war against Hamas and tensions between Iran and Israel. The situation in the Middle East contributed to oil prices climbing above $90 a barrel earlier this month, keeping the pressure on inflation. Gold, a safe haven asset, also hit a record high in April.   

Middle East tensions and the war in Gaza will be focal points in Riyadh over the next two days as at least a dozen heads of state and foreign ministers from countries including the UK, France and Germany gather at the World Economic Forum event. 

Blinken is due to speak on Monday. He’ll also meet with regional counterparts amid a continued push for improvements to the humanitarian situation in Gaza, the release of hostages held by Hamas, and proposals for a ceasefire. 

Hamas releases video of two hostages as it weighs up ceasefire

Hamas released a video on Saturday showing two hostages alive as it studied Israel’s latest proposal for a ceasefire, in an apparent bid to increase pressure on Netanyahu to call off a major offensive that would deepen the war in Gaza. 

The Palestinian militant group’s military wing posted a video showing American-Israeli citizen Keith Siegel (64) and Israeli Omri Miran (47) who spoke briefly in the video.

Israel’s offer of a ceasefire in exchange for the release of hostages is in response to the group’s position delivered to mediators on April 13, senior Hamas official Khalil Al-Hayya said in a statement. The group would submit a response once it’s finished studying it, he said, offering no specific timeline. 

Earlier this week, the US and 17 other nations pressed Hamas to release all hostages, including their citizens being held in Gaza, in a bid to revive talks that have stalled in recent weeks, and to unlock more humanitarian aid for the coastal enclave.  

Protests inside Israel over the fate of the hostages are also escalating, especially since Hamas released a recent video of a 23-year-old US-Israeli citizen whose mother has been the most prominent campaigner for efforts to secure the detainees’ release. That spurred calls for Netanyahu to step down, with many accusing the long-time prime minister of prolonging the war to hang on to office despite his failure in preventing Hamas’ 7 October attack on southern Israel.

Thousands gathered in central Tel Aviv late on Saturday including relatives of Gaza detainees demanding a hostage deal and early elections. DM