The US and the UK on Thursday launched air strikes on Houthi military positions across Yemen, pledging to protect the freedom of navigation in the Red Sea, while simultaneously risking further escalation in the region as the Gaza war rages on.
The Iran-backed rebels, who control the capital Sanaa, northern Yemen and parts of the Red Sea coast, said five of its members were killed in the "barbaric" strikes and vowed to retaliate.
"Today, at my direction, US military forces – together with the United Kingdom and with support from Australia, Bahrain, Canada and the Netherlands – successfully conducted strikes against a number of targets in Yemen used by Houthi rebels to endanger freedom of navigation in one of the world’s most vital waterways," US President Joe Biden said in a statement.
It is the first military action against the group since it started attacking international shipping in the Red Sea in solidarity with its ally Hamas in the Gaza Strip late last year.
Houthi operations have disrupted international commerce on the key waterway between Europe and Asia, which accounts for about 15 per cent of the world's shipping traffic.
"These strikes are in direct response to unprecedented Houthi attacks against international maritime vessels in the Red Sea, including the use of anti-ship ballistic missiles for the first time in history," Mr Biden said.
They are believed to be the first strikes the US has carried out against the Houthis in Yemen since 2016.
"These targeted strikes are a clear message that the United States and our partners will not tolerate attacks on our personnel or allow hostile actors to imperil freedom of navigation in one of the world’s most critical commercial routes," Mr Biden added.
"I will not hesitate to direct further measures to protect our people and the free flow of international commerce as necessary."
British Prime Minister Rishi Sunak approved the attacks after a meeting with his cabinet on Thursday evening.
"We have taken limited, necessary and proportionate action in self-defence … to degrade Houthi military capabilities and protect global shipping," Mr Sunak said in a statement.
The Houthis were defiant and vowed to continue their attacks.
“Our country was subjected to a massive aggressive attack by American and British ships, submarines and warplanes, and without a doubt, London and Washington will have to prepare to pay a heavy price,” Houthi official Hussein Al Ezzi said.
The group's leader Mohammed Ali Al Houthi said attacks in the Red Sea would continue.
“The American-British strikes are barbaric, terrorist and are a deliberate and unjustified aggression that reflects a brutal mindset," he said on X.
All US and British interests are now "legitimate targets", the Houthi-led Supreme Political Council said in a statement.
"The Yemeni response is legitimate within the framework of the sacred defence of Yemen, its sovereignty, independence and freedom of decision-making," it said.
The statement said the US and UK posed the real threat to international peace and security, and put the region under threat.
The US embassy of Yemen's internationally recognised government, which does not recognise the Houthis, accused the group of dragging the country into military conflict "with misleading claims that have no real connection to supporting our brothers and sisters in the occupied Palestinian territories."
"Yemen is following with great concern the military escalation in our country and the southern Red Sea, the most recent of which was the military operation that came as a response to the continued terrorist attacks by the Houthi militias that threatens the security and safety of international navigation," said the Yemen Embassy in DC in a post on X, formerly known as Twitter.
Attacks on shipping in the Red Sea by Yemen's Houthi rebels with the aim of ending Israel's war in Gaza were slowly turning the group of mountain fighters into a prominent regional player, a recognition they have long sought to acquire.
The threat they pose to global supply chains has attracted global attention, marking their transition from a local rebel group to an influential militia in the Middle East.
There are also growing fears that the Houthis could use the strikes to influence any negotiations to end the war in Yemen after 10 years of fighting that has caused one of the biggest humanitarian crises in the world.
"Striking Houthi targets in Yemen is not the way to go. The US fell for the bait," said Kuwaiti assistant professor of history Bader Al Saif on X.
"That’s what the Houthis wanted all along: it further complicates hard negotiations to end war in Yemen and increases their popularity. Expanding the war does no good. Work on a Gaza ceasefire instead."
The extent of damage caused by the strikes to the Houthis' military capabilities remains unclear.
A Houthi military spokesman said five personnel were killed and six injured in 73 attacks in Sanaa and the provinces of Hodeidah, Taiz, Hajjah and Saada.
The UK Ministry of Defence said the strikes included a hit against a site in north-western Yemen used to launch reconnaissance and attack drones. "A number of buildings involved in drone operations were targeted by our aircraft,” a statement said.
The Houthi attacks in the Red Sea were part of a wider co-ordinated response by Iran-backed militias in the Middle East to the Israeli war in Gaza, where more than 23,000 people have been killed by Israel since the Hamas attacks on October 7. Iraqi militant groups have attacked US forces, while Hezbollah in Lebanon has engaged Israel in intense cross-border clashes.
The Iranian Ministry of Foreign Affairs said in a statement the strikes on Houthi sites "will have no result other than fuelling insecurity and instability in the region".
Meanwhile, Russia has requested an urgent meeting of the UN Security Council in connection with the strikes, and Saudi Arabia called for "restraint and avoiding escalation".
Oman's Foreign Ministry has condemned US and British strikes on targets in Yemen.
"Oman denounces resorting to this military action while Israel is going ahead with its shelling, brutal war and siege of the Gaza Strip without punishment," the ministry said.
Foreign Minister Badr Al Busaidi said on X the sultanate was "deeply concerned" by the attacks.
Turkish President Recep Tayyip Erdogan condemned the strikes and accused the US and UK of wanting to turn the Red Sea into a "sea of blood".
Palestinian Assistant Foreign Minister Ammar Hijazi told The National the air strikes could cause further escalation "in the region and beyond".
"Unfortunately, states have chosen to escalate rather than hold Israel accountable and end this atrocity against the Palestinian people," he said on the steps of the International Court of Justice in The Hague, where Israel has been accused of genocide by a South African delegation.
In contrast, news of the strikes was welcomed in Israel, said Dr Yoel Guzansky, a senior researcher at the Institute for National Security Studies think tank in Tel Aviv.
“Many wanted the coalition to conduct them because the alternative, Israel unilaterally engaging the Houthis, would make the issue only an Israeli one. Now it's a global one,” he said.
Israel is less concerned than other countries about tensions escalating across the Middle East, because it already views the Gaza war as regional, Dr Guzansky said.
"In Israel, this is already a regional war, so for us, this does not open another front. The Houthis have already announced they’re firing against Israel,” he added.
The US in December launched Operation Prosperity Guardian to counter Houthi strikes on commercial vessels, alongside 10 countries including the UK.
"More than 50 nations have been affected in 27 attacks on international commercial shipping," Mr Biden said in his statement.
"Crews from more than 20 countries have been threatened or taken hostage in acts of piracy.
"More than 2,000 ships have been forced to divert thousands of miles to avoid the Red Sea, which can cause weeks of delays in product shipping times."
The US military said the Houthis on Thursday staged their 27th attack on shipping, firing an anti-ship ballistic missile into international shipping lanes in the Gulf of Aden.
The air strikes come after UK and US naval forces destroyed “attack drones” sent by Houthi rebels in the Red Sea, in what was believed to be the largest assault yet from the Yemeni rebels.
The Porpoise
By Mark Haddon
(Penguin Random House)
THE SPECS
Engine: 4.0L twin-turbo V8
Gearbox: eight-speed automatic
Power: 571hp at 6,000rpm
Torque: 800Nm from 2,000-4,500rpm
Fuel economy, combined: 11.4L/100km
Price, base: from Dh571,000
On sale: this week
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Our legal advisor
Ahmad El Sayed is Senior Associate at Charles Russell Speechlys, a law firm headquartered in London with offices in the UK, Europe, the Middle East and Hong Kong.
Experience: Commercial litigator who has assisted clients with overseas judgments before UAE courts. His specialties are cases related to banking, real estate, shareholder disputes, company liquidations and criminal matters as well as employment related litigation.
Education: Sagesse University, Beirut, Lebanon, in 2005.
The specs
Engine: 4.0-litre V8 twin-turbocharged and three electric motors
Power: Combined output 920hp
Torque: 730Nm at 4,000-7,000rpm
Transmission: 8-speed dual-clutch automatic
Fuel consumption: 11.2L/100km
On sale: Now, deliveries expected later in 2025
Price: expected to start at Dh1,432,000
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Company%20Profile
%3Cp%3E%3Cstrong%3EName%3A%3C%2Fstrong%3E%20Ovasave%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%20November%202022%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Majd%20Abu%20Zant%20and%20Torkia%20Mahloul%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Abu%20Dhabi%3Cbr%3E%3Cstrong%3ESector%3A%3C%2Fstrong%3E%20Healthtech%3Cbr%3E%3Cstrong%3ENumber%20of%20staff%3A%3C%2Fstrong%3E%20Three%20employees%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%3C%2Fstrong%3E%20Pre-seed%3Cbr%3E%3Cstrong%3EInvestment%3A%3C%2Fstrong%3E%20%24400%2C000%3C%2Fp%3E%0A
The specs
Engine: 2-litre 4-cylinder and 3.6-litre 6-cylinder
Power: 220 and 280 horsepower
Torque: 350 and 360Nm
Transmission: eight-speed automatic
Price: from Dh136,521 VAT and Dh166,464 VAT
On sale: now
Company Profile
Name: Thndr
Started: 2019
Co-founders: Ahmad Hammouda and Seif Amr
Sector: FinTech
Headquarters: Egypt
UAE base: Hub71, Abu Dhabi
Current number of staff: More than 150
Funds raised: $22 million
How the bonus system works
The two riders are among several riders in the UAE to receive the top payment of £10,000 under the Thank You Fund of £16 million (Dh80m), which was announced in conjunction with Deliveroo's £8 billion (Dh40bn) stock market listing earlier this year.
The £10,000 (Dh50,000) payment is made to those riders who have completed the highest number of orders in each market.
There are also riders who will receive payments of £1,000 (Dh5,000) and £500 (Dh2,500).
All riders who have worked with Deliveroo for at least one year and completed 2,000 orders will receive £200 (Dh1,000), the company said when it announced the scheme.
La Mer lowdown
La Mer beach is open from 10am until midnight, daily, and is located in Jumeirah 1, well after Kite Beach. Some restaurants, like Cupagahwa, are open from 8am for breakfast; most others start at noon. At the time of writing, we noticed that signs for Vicolo, an Italian eatery, and Kaftan, a Turkish restaurant, indicated that these two restaurants will be open soon, most likely this month. Parking is available, as well as a Dh100 all-day valet option or a Dh50 valet service if you’re just stopping by for a few hours.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
