[🇱🇧] Lebanon - Israel Conflict -2024

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Following the back-to-back explosions that targeted Hezbollah pagers and walkie-talkies, Safieddine said that his organization “will not back down until the end.”

Saffiedine has long been a hawkish critic of US policy, which he sees as aiding and abetting Israel’s actions in Gaza and southern Lebanon.

In 2021, he accused Washington of “interfering” in Lebanese domestic politics, saying that “American tyranny” is “sabotaging” the region’s nations, citing Iraq and Afghanistan among examples.

The United States designated Hezbollah a foreign terrorist organization in 1997, and in 2017 designated Safieddine a foreign terrorist.

 

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Gulf Arab states fear targeting of region’s oil facilities as war escalates, expert says​

From CNN’s Nadeen Ebrahim and Mostafa Salem


Oil producing Gulf Arab states are likely concerned about implications of an Israeli retaliation against Iran, especially if Israel targets Iran’s oil installations, a regional expert told CNN.

Such an attack would cause significant economic damage, threaten other oil facilities in the region, and create an ecological disaster, with oil potentially spilling into the Persian Gulf from damaged Iranian pipelines, said Hasan Alhasan, a senior fellow for Middle East Policy at the International Institute for Strategic Studies (IISS).

Concern of a wider war that could involve the targeting of the region’s oil facilities has already sparked a jolt in oil prices.

Iran has signaled in the past that if it can’t sell its oil, then no one else in the region can either, Alhasan said, raising questions about the safety of Gulf Arab oil installations if Iran’s are hit by Israel.

“There are real concerns about the first-order and second-order implications of such an Israeli attack,” he told CNN, noting that as long as Gulf states maintain a line of neutrality, Iran is unlikely to resurface past hostilities that directly target Gulf Arab states.

 

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Iranian President Masoud Pezeshkian met with Gulf Arab ministers in Qatar’s capital Doha on Thursday.

“Our neighbors are our priority,” Iranian Foreign Minister Abbas Araghchi said on X. “StrongRegion our goal—#Dialogue is a must,” he said.

A UAE official told CNN that regional discussions are focused on “the necessity of concerted regional and international efforts to halt the escalation and prevent further loss of life.”

Pezeshkian said he told the Qatari ruler in Doha that the “troubles” brought upon the region by Israel are “due to the existence of differences and factions among us,” according to the state news agency IRNA.

 

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Israel says it struck tunnel crossing to prevent “weapon smuggling” into Lebanon from Syria​

From CNN's Tamar Michaelis and Pauline Lockwood


Israel’s military says it struck an “underground tunnel crossing” on the Lebanese-Syrian border on Thursday to “prevent weapons from being smuggled into Lebanese territories”.

The Israel Defense Forces (IDF) said the tunnel’s operations were led by “the 4400 Unit, the unit responsible for the transportation of weapons from Iran and its proxies to Hezbollah in Lebanon.”

“Additionally, infrastructure sites adjacent to the Masnaa border crossing between Syria and Lebanon were struck last night,” the IDF added in its statement on Friday.

An Israeli airstrike near the main Lebanon-Syria border crossing halted traffic in both directions, a Lebanese official said on Friday.

The strike, late on Thursday, destroyed the road leading to the Masnaa crossing with Syria, Public Works Minister Ali Hamie told CNN, adding the checkpoint “has been cut off.”

The Masnaa border crossing lies in the Beqaa valley on the Beirut-Damascus international highway, a major transport link for people and goods between the two countries.

The highway has been used by tens of thousands of people to flee Israeli bombardment in recent days.

 

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Iranian foreign minister meets Lebanese prime minister in Beirut a week after Nasrallah’s assassination​

From CNN's Eyad Kourdi

Iranian Foreign Minister Abbas Araghchi, left, meets with Lebanon's caretaker Prime Minister Najib Mikati in Beirut, Lebanon, on October 4.
Amr Abdallah Dalsh/Reuters

Iranian Foreign Minister Abbas Araghchi traveled to the Lebanese capital, Beirut, on Friday for meetings with government officials, a week after the assassination of Hezbollah leader Hassan Nasrallah.

Araghchi met Lebanon’s caretaker Prime Minister Najib Mikati and expressed Iran’s commitment to Lebanon and “its support in the face of Israeli aggression,” the Iranian foreign ministry said in a statement.

Iran’s top diplomat said his country “will launch a diplomatic campaign to support Lebanon and request a meeting of the Organization of Islamic Cooperation.”

It is unclear if Araghchi will meet Hezbollah officials during his visit.

 

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Analysis: Israel's economy is paying a high price for its widening war​

From CNN's Hanna Ziady

In late September, as Israel’s nearly year-long war widened and its credit rating was downgraded yet again, the country’s finance minister, Bezalel Smotrich, said that, while Israel’s economy was under strain, it was resilient.

“Israel’s economy bears the burden of the longest and most expensive war in the country’s history,” Smotrich said on September 28, a day after Israeli airstrikes killed Hezbollah’s leader Hassan Nasrallah in Lebanon’s capital Beirut, ratcheting fears that tensions with the militant group would turn into a full-blown conflict.

“The Israeli economy is a strong economy that even today attracts investments.”

Almost a year after Hamas’ deadly attack on October 7, Israel is pushing forward on multiple fronts: launching a ground incursion against Hezbollah in Lebanon, carrying out airstrikes in Gaza and Beirut, and threatening retaliation for Iran’s ballistic missile attack earlier this week.

As the conflict spills over into the wider region, the economic costs will spiral too, both for Israel and other countries in the Middle East.

 

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Israel’s economy is paying a high price for its widening war​

Analysis by Hanna Ziady, CNN
October 4, 2024

Hay is being harvested in front of an Israeli army battle tank in southern Israel near the border with the Gaza Strip, as smoke rises above the Palestinian territory in May 2024.
Jack Guez/AFP/Getty Images


In late September, as Israel’s nearly year-long war widened and its credit rating was downgraded yet again, the country’s finance minister, Bezalel Smotrich, said that, while Israel’s economy was under strain, it was resilient.

“Israel’s economy bears the burden of the longest and most expensive war in the country’s history,” Smotrich said on September 28, a day after Israeli airstrikes killed Hezbollah’s leader Hassan Nasrallah in Lebanon’s capital Beirut, ratcheting fears that tensions with the militant group would turn into a full-blown conflict. “The Israeli economy is a strong economy that even today attracts investments.”

Almost a year after Hamas’ deadly attack on October 7, Israel is pushing forward on multiple fronts: launching a ground incursion against Hezbollah in Lebanon, carrying out airstrikes in Gaza and Beirut, and threatening retaliation for Iran’s ballistic missile attack earlier this week. As the conflict spills over into the wider region, the economic costs will spiral too, both for Israel and other countries in the Middle East.

“If recent escalations turn into a longer and more intense war, this will take a heavier toll on economic activity and growth (in Israel),” Karnit Flug, a former governor of Israel’s central bank, told CNN on October 1.

The war has significantly worsened the situation in Gaza, pushing it into an economic and humanitarian crisis long ago, and the West Bank is “undergoing a rapid and alarming economic decline,” the United Nations said in a report last month.

The Lebanese economy, meanwhile, could contract by up to 5% this year due to cross-border attacks between Hezbollah and Israel, according to BMI, a market research firm owned by Fitch Solutions.

Israel’s economy could shrink even more than that, based on a worst-case estimate by the Institute for National Security Studies at Tel Aviv University.

Even in a more benign scenario, its researchers also see Israel’s gross domestic product per head — which in recent years overtook the United Kingdom’s — falling this year, as Israel’s population grows faster than the economy and living standards decline.

Before the October 7 attack and ensuing Israel-Hamas war, the International Monetary Fund forecast that Israel’s economy would grow by an enviable 3.4% this year. Now, economists’ projections range from 1% to 1.9%. Growth next year is also expected to be weaker than earlier forecasts.

Yet Israel’s central bank is not in a position to cut interest rates to breathe life into the economy because inflation is accelerating, propelled by rising wages and soaring government spending to fund the war.

 

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‘Long-term’ economic damage​

The Bank of Israel estimated in May that costs arising from the war would total 250 billion shekels ($66 billion) through the end of next year, including military outlays and civilian expenses, such as on housing for thousands of Israelis forced to flee their homes in the north and south. That is equivalent to roughly 12% of Israel’s GDP.

Those costs look set to rise further as fiercer fighting with Iran and its proxies, including Hezbollah in Lebanon, adds to the government’s defense bill and delays the return of Israelis to their homes in the country’s north. Israel launched a ground incursion into southern Lebanon targeting Hezbollah on September 30.

Smotrich, the finance minister, is confident that Israel’s economy will bounce back once the war ends, but economists are concerned the damage will far outlast the conflict.

Israel's finance minister, Bezalel Smotrich, pictured in June 2024.
Menahem Kahana/AFP/Getty Images
Flug, the former Bank of Israel governor and now vice-president of research at the Israel Democracy Institute, says there is a risk the Israeli government cuts investment to free up resources for defense. “That will reduce the potential growth (of the economy) going forward,” she said.

Researchers at the Institute for National Security Studies are similarly downbeat.

Even a withdrawal from Gaza and calm on the border with Lebanon would leave Israel’s economy in a weaker position than before the war, they said in a report in August. “Israel is expected to suffer long-term economic damage regardless of the outcome,” they wrote.

“The anticipated decline in growth rates in all scenarios compared to pre-war economic forecasts and the increase in defense expenditures could exacerbate the risk of a recession reminiscent of the lost decade following the Yom Kippur War.”

The 1973 war, also known as the Arab-Israeli war, launched by Egypt and Syria against Israel’s forces in the Sinai Peninsula and Golan Heights, ushered in a long period of economic stagnation in Israel, partly as the country massively ramped up defense spending.

Likewise, potential tax hikes and cuts to non-defense spending — some already mooted by Smotrich — to fund what many expect to become a permanently enlarged military, could hurt economic growth. Such measures, coupled with a weakened sense of security, could also spur an exodus of highly educated Israelis, notably tech entrepreneurs, Flug warned.

“It doesn’t have to be in very large numbers, because the tech sector is very dependent on a few thousand of the most innovative, creative and entrepreneurial individuals,” she said of a sector that accounts for a hefty 20% of Israel’s economic output.

 

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A Jewish man walks past closed shops in Jerusalem's Old City on September 11, 2024.

Ahmad Gharabli/AFP/Getty Images

A large-scale departure of high-earning taxpayers would further dent Israel’s finances, which have taken a knock from the war. The government has delayed publishing a budget for next year as it grapples with competing demands that make it hard to balance its books.

The conflict has caused Israel’s budget deficit — the difference between government spending and revenue, mostly from taxes — to double to 8% of GDP, from 4% before the war.

Government borrowing has soared and become more expensive, as investors demand higher returns to buy Israeli bonds and other assets. Multiple downgrades to Israel’s credit ratings made by Fitch, Moody’s and S&P are likely to raise the country’s cost of borrowing even further.

In late August — a month before Israel carried out strikes on Lebanon’s capital and the ground incursion against Hezbollah in the country’s south — the Institute for National Security Studies estimated that just one month of “high-intensity warfare” in Lebanon against the militant group, with “intensive attacks” in the opposite direction that damage Israeli infrastructure, could cause Israel’s budget deficit to soar to 15% and its GDP to contract by up to 10% this year.

 

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Uncertainty ‘the biggest factor’​

To shrink the fiscal hole, the government can’t rely on a healthy flow of tax revenue from businesses, many of which are collapsing, while others are reluctant to invest while it’s unclear how long the war will last.

Coface BDi, a major business analytics company in Israel, estimates that 60,000 Israeli firms will shut this year, up from an annual average of around 40,000. Most of these are small, with up to five employees.

“Uncertainty is just bad for the economy, bad for investment,” said Avi Hasson, the CEO of Startup Nation Central, a non-profit that promotes Israel’s tech industry globally.

In a recent report, Hasson warned that the remarkable resilience of Israel’s tech sector so far “will not be sustainable” in the face of the uncertainty created by the prolonged conflict and the government’s “destructive” economic policy.

Even before the October 7 attack, government plans to weaken the judiciary were prompting some Israeli tech companies to incorporate in the United States. The insecurity created by the war has exacerbated that trend, with most new tech companies formally registered overseas, despite tax incentives to incorporate locally, and a large number considering moving some of their operations outside Israel, Hasson told CNN last month.

He remains bullish on Israeli tech, pointing to robust fundraising, but cautions that the industry’s future growth “depends on regional stability and responsible government policies.”

 

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Other sectors of Israel’s economy, while less important than tech, have been hit much harder. The agriculture and construction sectors have struggled to fill gaps left by Palestinians whose work permits have been suspended since October last year, pushing up prices for fresh vegetables and leading to a steep decline in housebuilding.

Tourism has also taken a knock, with arrivals down sharply this year. Israel’s tourism ministry has estimated that the drop in foreign tourists has translated into 18.7 billion shekels ($4.9 billion) in lost revenue since the start of the war.

The Norman, a boutique hotel in Tel Aviv, has had to lay off some staff and cut its prices by up to 25%, partly because some of its facilities — including its Japanese rooftop restaurant — remain closed to save on costs.

Occupancy levels have fallen from above 80% before war to below 50% currently, according to the hotel’s general manager Yaron Liberman.

“We know the day when the war will finish it’s going to be crazy here as far as business coming back,” he told CNN in mid-September, citing correspondence from would-be guests keen to visit Israel but unable to book flights or secure travel insurance.

But for now, “the biggest factor is the uncertainty,” Liberman said. “When is the war going to end?”

 

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Israeli police report heavy damage in northern Israel following Hezbollah rocket barrage​

From CNN’s Tamar Michaelis and Eyad Kourdi


Israeli police reported heavy damage in northern Israel following a Hezbollah rocket barrage on Friday.

Earlier on Friday, the Israeli military said nearly two dozen projectiles were identified crossing into Israeli territory from Lebanon.

Police officials said they had received reports about several areas impacted by rocket fire across Kiryat Shmona and the Lower Galilee, with heavy damage reported.

Fire and rescue teams attend to a fire in Kiryat Shmona

Northern District Fire & Rescue/Northern District Fire & Rescue
Several fires broke out but no injuries were reported.

Police officers and bomb disposal teams were at the scenes of the strikes.

Firefighting teams were working to extinguish a fire that broke out after a direct hit on a garage in Kiryat Shmona, according to a statement from the Fire and Rescue Services.

 

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Iran says any Lebanon ceasefire should be simultaneous with Gaza​

Reuters
October 4, 2024

BEIRUT: Tehran backs efforts for a ceasefire in Lebanon on the condition it would be backed by Hezbollah and simultaneous with a ceasefire in the Gaza Strip, Iran’s foreign minister Abbas Araqchi said in Beirut on Friday.

“We support efforts for a ceasefire on the condition that it would be acceptable to the Lebanese people, acceptable to the resistance, and thirdly, it would be synchronized with a ceasefire in Gaza,” he said.

Iran’s most senior diplomat also said his presence in Beirut “in these difficult circumstances” was the best evidence that Iran stood by Lebanon and supported the Shias.

 

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WASHINGTON: US President Joe Biden on Friday advised Israel against striking Iran’s oil facilities, saying he was trying to rally the world to avoid the escalating prospect of all-out war in the Middle East.

But his predecessor Donald Trump, currently campaigning for another term in power, went so far as to suggest Israel should “hit” the Islamic republic’s nuclear sites.

Making a surprise first appearance in the White House briefing room, Biden said that Israel’s Benjamin Netanyahu “should remember” US support for Israel when deciding on next steps.

“If I were in their shoes, I’d be thinking about other alternatives than striking oil fields,” Biden told reporters when asked about his comments a day earlier that Washington was discussing the possibility of such strikes with its ally.

Biden added that the Israelis “have not concluded how they’re, what they’re going to do” in retaliation for a huge ballistic missile attack by Iran on Israel on Tuesday.

The price of oil had jumped after Biden’s remarks Thursday.

Any long-term rise could be damaging for US Vice President Kamala Harris as the Democrat confronts Republican Trump in a November 5 election where the cost of living is a major issue.

 

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Large explosion seen in Beirut
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Live images show a large explosion in Beirut, after what appears to be a fresh Israeli attack on the city.

Little is known about exactly what was hit and the Israeli military is yet to comment. We'll bring you more as we have it.