US Secretary of State Antony Blinken waves as he boards his plane at an airport near Tel Aviv, Israel on Thursday. Reuters
US Secretary of State Antony Blinken waves as he boards his plane at an airport near Tel Aviv, Israel on Thursday. Reuters
US Secretary of State Antony Blinken waves as he boards his plane at an airport near Tel Aviv, Israel on Thursday. Reuters
US Secretary of State Antony Blinken waves as he boards his plane at an airport near Tel Aviv, Israel on Thursday. Reuters

Blinken leaves Middle East empty-handed as Hamas begins fresh talks


Hamza Hendawi
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Live updates: Follow the latest news on Israel-Gaza

US Secretary of State Antony Blinken left the Middle East on Thursday with divisions growing between Washington and Israel over plans to end the Gaza war, as top Hamas officials began meetings with mediators from Egypt and Qatar.

Mediation efforts to find a formula acceptable to the warring sides to end the fighting have floundered as the death and destruction in Gaza continues, with few clear avenues to end the crisis.

Egyptian security sources meanwhile told The National that troops stationed on the nation's border with Israel and Gaza have been reinforced and put on high alert in response to Israeli threats to its forces.

Israel intends to shift ground operations to Rafah, a southern Gaza town where at least a million displaced Palestinians have found refuge.

Recent operations have devastated Khan Younis, about 10km from the border, once home to around 300,000 people.

Egypt fears that Palestinians living in makeshift camps on the Gaza side of Rafah will be forced to flee across the border into its Sinai Peninsula if Israeli forces take their search for Hamas fighters and facilities to the coastal town.

Cairo says this eventuality would “liquidate” the Palestinian cause, create a new hurdle for future negotiations to settle the Palestinian-Israeli conflict and breach Egypt's national security.

The UN and others have repeatedly warned that shifting Israeli ground operations to Rafah would cause a large number of civilian casualties given how crowded the town currently is.

The sources said Egypt, which signed a peace treaty with Israel in 1979, has dispatched aircraft on reconnaissance missions over the area and was stepping up its monitoring of Israeli military movements.

Relations between Egypt and Israel have been tense since the Gaza war began four months ago, with Cairo frequently accusing Israel of carrying out collective punishment in Gaza, not doing enough to avoid civilian casualties and bombing the Gaza side of the Rafah border crossing, close to the Egyptian border, on at least four occasions.

It also says Israel is impeding the arrival of sufficient humanitarian aid to Gaza, where nearly 28,000 Palestinians have been killed to date and the vast majority of its 2.3 million residents displaced.

People walk along a crowded main street in Rafah in the southern Gaza Strip. AFP
People walk along a crowded main street in Rafah in the southern Gaza Strip. AFP

On Tuesday night Hamas sent Egyptian and Qatari mediators counter-proposals to a plan hammered out last week in Paris by mediators from the US, Qatar and Egypt.

Israeli Prime Minister Benjamin Netanyahu firmly rejected the proposals, saying they were “delusional”. He vowed to continue fighting until Hamas has been eradicated and hostages held by the militant group are freed.

On Thursday, Hamas said Khalil Al Hayah, its deputy leader in Gaza, arrived in Egypt for talks on the prospects of a ceasefire.

The sources said he would be meeting officials from the Egyptian intelligence agency as well as Qatari mediators to discuss the way forward.

As with previous rounds, the talks are held behind closed doors.

Mr Blinken has said he saw some hope in Hamas's counter-proposals, but acknowledged that they included some “non-starters.”

The counter-proposals include Israel's withdrawal from Gaza, a permanent ceasefire and a reconstruction plan with a three-year timeline. They also envisage a prisoner and hostage swap between Israel and Hamas.

Relations between Israel and its main international ally, the US, have been tense for months, but Mr Netanyahu's public dismissal of a plan the US says has some merit, has highlighted the divide.

Israeli soldiers stand atop a tank near the border with Gaza in southern Israel. EPA
Israeli soldiers stand atop a tank near the border with Gaza in southern Israel. EPA

Yet Mr Blinken and other US officials said they remain optimistic that progress could be made on their main goals of improving humanitarian conditions for Palestinians civilians, securing the release of hostages held by Hamas, preparing for a post-conflict Gaza and preventing the war from spreading.

“We see space to continue to pursue an agreement,” Mr Blinken said late on Wednesday. “And these things are always negotiations. It’s not flipping a light switch. It’s not ‘yes’ or ‘no.' There’s invariably back and forth.”

Compounding Mr Blinken’s dilemma, Mr Netanyahu appeared to dismiss concerns from the US and others about Israel expanding its military operations in southern Gaza, particularly in Rafah.

“On all of my previous visits here and pretty much every day in between, we have pressed Israel in concrete ways to strengthen civilian protection, to get more assistance to those who need it. And over the past four months, Israel has taken important steps to do just that,” Mr Blinken said.

“And yet … the daily toll that its military operations continue to take on innocent civilians remains too high.”

The Gaza war was triggered by an attack on southern Israel by Hamas on October 7, when its fighters killed about 1,200 people and took 240 hostages back to Gaza. A truce in late November saw the release of more than 100 hostages in exchange for about 200 Palestinians who had been jailed in Israel.

Mr Blinken appealed to Mr Netanyahu and other Israelis still reeling from the Hamas attack not to allow vengeance to dictate their continued response.

“Israelis were dehumanised in the most horrific way on October 7,” he said. “And the hostages have been dehumanised every day since. But that cannot be a license to dehumanise others.”

Mr Blinken, whose latest tour of the region was his fifth since the war began, came to Israel just hours after the receipt of the Hamas counter-proposals to the framework truce agreement put forward last week, which envisaged a three-phase plan to de-escalate the conflict.

He also visited Egypt, Saudi Arabia and Qatar during his tour, talking up Riyadh's interest in normalising relations with Israel, provided the Gaza war ends and the Palestinians are given a clear, credible and time-bound pathway to an independent state.

“We remain determined as well to pursue a diplomatic path to a just and lasting peace, and security for all in the region, and notably for Israel,” he said in Tel Aviv.

However, Mr Netanyahu is opposed to the creation of a Palestinian state and has said Israel will maintain open-ended security control over Gaza.

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What should do investors do now?

What does the S&P 500's new all-time high mean for the average investor? 

Should I be euphoric?

No. It's fine to be pleased about hearty returns on your investments. But it's not a good idea to tie your emotions closely to the ups and downs of the stock market. You'll get tired fast. This market moment comes on the heels of last year's nosedive. And it's not the first or last time the stock market will make a dramatic move.

So what happened?

It's more about what happened last year. Many of the concerns that triggered that plunge towards the end of last have largely been quelled. The US and China are slowly moving toward a trade agreement. The Federal Reserve has indicated it likely will not raise rates at all in 2019 after seven recent increases. And those changes, along with some strong earnings reports and broader healthy economic indicators, have fueled some optimism in stock markets.

"The panic in the fourth quarter was based mostly on fears," says Brent Schutte, chief investment strategist for Northwestern Mutual Wealth Management Company. "The fundamentals have mostly held up, while the fears have gone away and the fears were based mostly on emotion."

Should I buy? Should I sell?

Maybe. It depends on what your long-term investment plan is. The best advice is usually the same no matter the day — determine your financial goals, make a plan to reach them and stick to it.

"I would encourage (investors) not to overreact to highs, just as I would encourage them not to overreact to the lows of December," Mr Schutte says.

All the same, there are some situations in which you should consider taking action. If you think you can't live through another low like last year, the time to get out is now. If the balance of assets in your portfolio is out of whack thanks to the rise of the stock market, make adjustments. And if you need your money in the next five to 10 years, it shouldn't be in stocks anyhow. But for most people, it's also a good time to just leave things be.

Resist the urge to abandon the diversification of your portfolio, Mr Schutte cautions. It may be tempting to shed other investments that aren't performing as well, such as some international stocks, but diversification is designed to help steady your performance over time.

Will the rally last?

No one knows for sure. But David Bailin, chief investment officer at Citi Private Bank, expects the US market could move up 5 per cent to 7 per cent more over the next nine to 12 months, provided the Fed doesn't raise rates and earnings growth exceeds current expectations. We are in a late cycle market, a period when US equities have historically done very well, but volatility also rises, he says.

"This phase can last six months to several years, but it's important clients remain invested and not try to prematurely position for a contraction of the market," Mr Bailin says. "Doing so would risk missing out on important portfolio returns."

Nancy 9 (Hassa Beek)

Nancy Ajram

(In2Musica)

Updated: February 09, 2024, 9:30 AM